Recommended Gartner Research Overall/Digital

Taming the Digital Dragon

Dr Marcus Blosch VP Research Gartner

NZ Education Lead: Imogene Lomax [email protected] or 027 4664 363

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2,339 Chief Information Officers

From 77 Countries

Representing More Than $300 Billion of IT Spending

150 Gartner Analysts and Executive Partners Helped Shape the Report

1. Welcome to the Third Era of Enterprise IT 2. Create Powerful Digital Leadership 3. Renovate the Core 4. Build Bimodal Capability

"My business and its IT organization are being engulfed by a torrent of digital opportunities. We cannot respond in a timely fashion, and this threatens the success of the business and the credibility of the IT organization." 42% 51% Disagree "The IT organization has the right Agree skills and capabilities in place to meet upcoming challenges."

"There is a growing disconnect between our increasingly nonlinear world and the linear mindsets, practices and institutions that we deploy in our work." – John Hagel, Co-chairman, Deloitte Center for the Edge © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. We Mean "Re-mastering" of an Industry in TWO Senses …

1) Re-imagining and re-rendering its products and services using TODAY's technology

2) Re-defining what mastery of an industry looks like and which firms are the new masters

book ...

class

IT Craftsmanship IT Industrialization Digitalization

ADAPT IDEATE

MONETIZE CREATE

OFFER ENGAGE

Focus Technology Processes Business models

Programming, system IT management, service Capabilities Digital leadership management management

Treat colleagues as Treat colleagues as Isolated, disengaged Engagement customers, unengaged with partners, engage internally and externally external customers external customers

Outputs and Sporadic automation and Services and solutions, Digital business innovation, Outcomes innovation, frequent issues efficiency and effectiveness new types of value

IT Industrialization Digitalization

• Clear digital roles • Savvy digital executives Create • Digital vision and digital legacy powerful digital • Agile development leadership • Multidisciplinary teams • Innovative partnerships • New risk/speed trade-offs Renovate the core Build of IT bimodal capability • Cloud/Web-scale infrastructure • Information • Talent • Sourcing

1. Welcome to the Third Era of Enterprise IT 2. Create Powerful Digital Leadership 3. Renovate the Core 4. Build Bimodal Capability

"If the CEO asks 'Who is in charge of digital?' and gets multiple responses, then there is no digital leadership." – Baron Concors, CIO of Yum Restaurants International, former CIO and CDO of Pizza Hut

Industry %CDOs Media 21% "For the CIO, there is a Communications 13% strong opportunity, and Services 11% also a responsibility, to Banking 10% Insurance 9% be part of this new Retail 9% digital game. However Healthcare Providers 5% the organizational model Government 5% plays out, there will be a Manufacturing & Natural Resources 5% strong push for the Wholesale Trade 3% digital future." Education 3% – Gianni Leone, CIO and Transportation 4% CDO, Miroglio Group North EMEA: Latin Asia/Pacific: Utilities 1% America: 6% America: 11% 5% 7% Gartner predicts a tripling of the CDO role by 2015. Mythbuster: The CDO role is not limited to media or information-intensive industries.

Growth Growth Focus Focus

IT USER IT USER EFFECT. SAT. EFFECT. SAT.

BUS. CIO CIO BUS. POWER PERF. POWER PERF.

8% of Enterprises Have CEOs Whose 7% of Enterprises Have CEOs Whose Digital Savvy Is Very Weak Digital Savvy Is Strong

"We believe it's important to embed digital in the role of every key executive." — Willem Eelman, Global CIO, Unilever

1. Welcome to the Third Era of Enterprise IT 2. Create Powerful Digital Leadership 3. Renovate the Core 4. Build Bimodal Capability

Ranking Based on How Many CIOs Cited Each Exploit as a Top Three New Spending Priority for 2014 the New BI/ANALYTICS 1 INFRASTRUCTURE & DATACENTER 2 MOBILE 3 ERP 4 CLOUD 5 NETWORKING, VOICE AND DATA COMMS. 6 DIGITALIZATION/DIGITAL MKTG. 7 SECURITY 8 INDUSTRY SPECIFIC APPLICATIONS 9 CUSTOMER RELATIONSHIP MANAGEMENT 10 LEGACY MODERNIZATION 11 COLLABORATION 12 Renovate the Core

More federated ERP, multi-enterprise, cloud components, mobile support, Increased adoption embedded analytics of public and Postmodern private IaaS, PaaS, ERP/Apps SaaS, BPaaS

Hybrid Next- Cloud More generation Diverse Information Partnerships Capabilities

Volume/velocity/ Use of SMBs/startups; variety; in-memory; new categories of advanced analytics partners, e.g., mobile, design, analytics

© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Public Cloud Is Being Deployed to Support Agility Main Reason Other 12% Payback Quality Have made 10% 25% significant cloud Innovation investments 13% Cost 22 14% Months SaaS 72%

IaaS Agility PaaS 47% 43% 50%

BPaaS 17%

"Potential benefits of cloud include cost savings and other capabilities, such as agility, innovation and time to market. It is often the latter that is the real impetus. These benefits are often less quantifiable, but are more and more commonly cited as the true drivers and value of cloud."

"We are looking for an architecture that could serve 1 billion people. We could afford traditional infrastructure when customers came to the bank once a month. Now they may access their accounts via mobile phones 10 times per day. The cost per transaction must approach zero to make this usage viable for the bank." — Luis Uguina, global head of Remote Channels and New Digital Business, BBVA

When will more In 2011 and 2014, than half of your Percent of 2011 23% Said "Never" business run on Survey public* cloud Respondents infrastructure Percent of 2014 + SaaS? Survey Respondents

2011: 1,993 respondents; 2014: 2,252 respondents *2011 survey asked about cloud; in 2014, specified public cloud

"In my previous role overseeing an Indonesia mobile payments initiative, we had to simulate 5 million customers, three banking gateways and 10 telecommunications companies. Public cloud was the only cost- effective way, and I got to see the power of it." — Larry Matias, CIO, Jollibee Foods

"IT sourcing will change their technology strategies must and sourcing relationships in be structured to the next 2 to 3 years for a enhance IT 70% agility and variety of reasons … address the 57% 55% needs of digital 52% businesses. 46% 45% Organizations that don't adapt their strategies, 28% and the competencies required to execute them Price/ Service Flexibility Ability to Innovation Scale effectively, will Price Structure Quality Partner fail to achieve the value need to work with new categories opportunities presented by a of partners, for example … highly digitalized 46% Mobility Cloud Digital Agency future." — Ian Marriott, Big Data Analytics Social Gartner Research VP © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. CIOs Do Not Feel That the Innovation Will Come From the Usual Suspects

37% Which technology company has been most influential over the last 10 years? 32% And which will be in the next 10 years? 28%

Last 10 years 23% Next 10 years

20%

15% 15% 14% Intel VMware SAP Oracle Amazon Cisco IBM Microsoft Apple Google Others 5% 5% 5% 5% 3% 3% 1% 3% 4% 1% 1% 5% 2% 1% Gartner annual CIO Survey, 2013; percent of respondents mentioning each brand; 1,305 respondents (last 10 years)/1,255 respondents (next 10 years)

1. Welcome to the Third Era of Enterprise IT 2. Create Powerful Digital Leadership 3. Renovate the Core 4. Build Bimodal Capability

When speed or innovation is needed, or there is a high "The reality is that degree of uncertainty you do have to operate at two speeds, and some of that you do by creating dedicated teams for each. Focusing on the Agile dev. big systems, Waterfall Small/ making them run development innovative smooth, while at Stuck in the middle partners Known vendors "Fit for no one" the same time Lightweight having disrupters Strong governance "Just good to innovate, Minimized risk enough" governance together with Technology teams Managed risk marketing and the Multidisciplinary teams customer, exploiting digital." — Willem Eelman, Traditional Mode Nonlinear Mode global CIO, Unilever

Mythbuster: Nonlinear need not be limited to where speed is needed, for experiments, or for non-mission-critical initiatives.

of CIOs currently have a second 45% fast/agile mode of operation Those who do run traditional, iterative and lightweight projects in proportions: 50/25/25

47% operate separate teams But most have not exploited all the 43% partner with small businesses facets of bimodal: 8% use crowdsourcing/innovation marketplaces

Mythbuster: Nonlinear is not only about software development.

IT Craftsmanship IT Industrialization Digitalization

P&L CIO CIO CIO CDO Owners

OOCIO CTO OOCIO CTO Multi- Functional/ D Grow/ Run D disciplinary Process Silos Run Change Product Teams

CTO Chief technology officer, acting as chief operating officer of IT

CDO Chief digital officer, acting as digital change agent

OOCIO Office of the CIO, running IT as a business (strategy, governance, security and risk, etc.)

Run Run = Every aspect of IT needed to keep the business running

Grow/ Change Grow/change = Every aspect of IT needed to execute on growth and change

D Demand management = Internal demand/relationship/account managers facing off to BUs

Overall/Digital:  Hunting and Harvesting in a Digital World: The 2013 CIO Agenda Mark P. McDonald and Dave Aron (G00248536)  Let's Get Digital: A Template for Digital Business Strategy Dave Aron and Lee Weldon (G00257724)  The Gartner Travel Guide to the First Digital Decade Lee Weldon, Jeffrey R. Cole, and others (G00255443)  CEO and Senior Executive Survey 2013: As Uncertainty Recedes, the Digital Future Emerges Mark Raskino and Jorge Lopez (G00247308)

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