visionary it - perspectives on the modern it organization

VISIONARY ITPerspectives on the Modern IT Organization

” To be able to think beyond just operation, to have your business act human, to be able not just to respond to business quickly but to help the line of business to work with IT. To be able to move IT beyond today’s function towards a collaborating unit in the organization. To create new businesses for the company. This is what the IT organization is about today.

CIO and Director, e-Strategies, Engineering and Services

Content owned by Management Events. All rights reserved.

ONLINE survey

The report is based on responses from 1,127 IT decision makers of the largest organizations in Europe and Southeast Asia who were surveyed as part of Management Events’ Executive Trend Survey®

Our latest survey is the 10th in the ongoing series of studies covering strategic development initiatives and investment actions of these organizations.

FACE-TO-FACE interviews

To deepen our insights, we interviewed the highest decision makers face-to-face to discuss further the trends and issues in IT.

267 CIO

270 Head of IT / IT Manager

136 Business Area CIO / IT Head of Department

77 IT Strategy and Development

73 IT Services and Portfolio Management

70 Analytics and Data Management

67 CISO / Information Security

59 Applications

44 Infrastructure

42 Architecture

24 Other

TOTAL Decision Makers Researched


AGILE OPERATIONS

Digitalization is transforming the way IT organizations

operate. To be able to cause disruption, and to proactively

protect from it, companies need to re-organize the IT

function to respond to the new requirements of business. This

calls for new kind of agility which entails the rise of ’as-a-

service’ in IT operations.

DATA EXPLOSION

Data analytics is the number one priority for IT decision

makers. Data is increasingly important for decision making in various functions. Today the

CIO focus lies in data quality and its monetization.

SECURE CHANGE

With mounting information flows inside and outside

organizations, ensuring security is tightly in the focus of IT. The importance of cyber security is now acknowledged by top management but employee

awareness remains as the main concern for the CIOs and CISOs.

CUSTOMER FOCUS

CIOs today are increasingly responsible for creating end

user innovations and winning customer experiences. IT is

outreaching the core business processes and taking a

strategic seat in business value creation.


MAIN TAKEAWAYS of the report

MODERN IT ORGANIZATION

Modern IT organization needs to be agile – able to react and bend in rapidly changing situations. Simultaneously, it needs to be able to ensure efficient core processess in the organization and have the flexibility of a start-up to maintain the readiness to prepare and react fast to external change.

Having the right people with the right competence at the right moment in any organizational function is critical. However, the most crucial capability in IT today is the understanding of business. Modern IT function is integrated into business, being the internal provider who prospects the opportunities next to the business management.

Modern IT organization needs the ability to drive change as well as understanding of emerging technologies to best support business in all levels and push and guide the company development. The function also needs to hold the ability to balance digital opportunities with the risks related to them and deliver services in a new way.

IT priorities in organizational value creation

63%

61%

48%

48%

44%

39%

IMPROVING PROCESS EFFICIENCY AND AGILITY

IMPROVING CUSTOMER AND END USER EXPERIENCE

DELIVERING COST EFFICIENCIES

IMPROVING EMPLOYEE PRODUCTIVITY THROUGH TECHNOLOGY

IDENTIFYING NEW TECHNOLOGY- ENABLED BUSINESS AND GROWTH OPPORTUNITIES

MITIGATING TECHNOLOGY RISKS AND ENSURING BUSINESS CONTINUITY

” You need to act like a startup, otherwise startups will take parts of your market. CIO, Transportation and Logistics


Five essentials of A COMpETITIvE IT ORGANIzATION

Courage and Experimentation”Head of Corporate IT Innovation & Digitalization, Retail

CIO, Food & Beverage

CIO, Food & Beverage

Senior Vice President, Financial Services

Insights from Customers”IT function must work together with internal key partners to establish a culture embracing flexibility and experimentations. You need to invest in areas that you don’t know and tolerate that sometimes you guess incorrectly.

If you understand what your customers want, you can create more value by providing services that are equal or better than the services you have today. You have to take your offering beyond what the customers want and expect you to deliver.

Ability to React”The digital transformation is rapid and unpredictable. In this kind of environment, ability to respond is an essential skill.

Ecosystems and Partnerships”If you have an adequate understanding of the business, you can understand what the digital transformation can offer. However, you cannot do everything by yourself. You must play with the partners, suppliers, and startups.

Capability to Lead”First, you have to be clear about goals you have within IT, then you define the roles and required competences. Everyone in the IT organization must act as part of a group, not as individuals. At the end of the day, it’s all about leadership.


Director, Head of IT Operations, Industrial Products and Equipment

” The IT department cannot drive change alone. We are trying to push out the technology where it belongs in the business and have the board to involve the business in the things we develop. When we run a project, the IT department is not the project leader but a facilitator - the implementation is run by the business.

CIO, Facility Services

IT DEVELOPMENT pRIORITIES


44% of CIOs predict an increase in overall IT spending. IT budgets in retail sector will experience the most significant growth.

ALL

RETAIL AND CONSUMER

FINANCIAL SERVICES

ENERGY AND RESOURCES

SERVICES

HEALTHCARE AND LIFE SCIENCES

MANUFACTURING

PUBLIC SECTOR

TECHNOLOGY, MEDIA AND TELECOM

INCREASE STAY THE SAME DECREASE

44%

56%

45%

44%

44%

43%

42%

35%

30%

40%

32%

37%

41%

37%

42%

41%

52%

44%

16%

12%

16%

14%

18%

15%

17%

13%

26%

IT bUDGETS predictions by industry


As digitalization has formed a new playground for businesses to compete in, the capability to collect, integrate and analyse data is now considered as the number one investment priority among IT decision makers. Data is now a business-critical asset which may determine your ability to not just know your customers thoroughly but to serve them in a personal and timely manner without compromizing in security and privacy. At the end, the forerunners are the companies who are able to monetize their data. Today the customer is increasingly the focus of the IT organization. While in the past the customer has been in the hands of marketing and sales, limiting the customers’ experiences mainly on the service encounters, IT is now moving into the driving seat in creating experiences across different channels in the digital environment.

2015

ANALYTICS

DIGITALBUSINESS

CYBER SECURITY

MOBILITY

CUSTOMER EXPERIENCE,MARKETING AND SALES

INTERNETOF THINGS

38% 40%34% 35%32% 33%38% 28%

14% 22%18% 18%

2016

TECHNOLOGY pRIORITIESthe increasing importance of customer focus in IT initiatives


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY

CUSTOMER EXPERIENCE 18%

21%41%21%

46%

Austria

INTERNET OF THINGS 25%

ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


24%27%37%

41%

Norway


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


45%39%34%

47%

Turkey


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


22%25%30%

44%

Denmark


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY

CUSTOMER EXPERIENCE 22%27%22%

41%27%

Sweden


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY

CUSTOMER EXPERIENCE *

40%27%19%

35%

ASEAN region


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY

CUSTOMER EXPERIENCE 20%16%36%29%

41%

Germany


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


48%38%

Finland


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


24%24%

30%

37%

Switzerland


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


25%

46%

The Netherlands


*Topic not included in the survey of ASEAN region


REGIONAL pERSpECTIvES technology initiatives by region

ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


37%

34%

36%

38%

Energy and resources


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


28%

34%

40%39%

Public sector


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


17%

28%

29%

32%

Technology, media and telecom


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


21%

29%

42%

40%

Financial services


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


28%

31%

43%

47%

Retail and consumer


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


26%

35%

27%

49%

Healthcare and life sciences


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


32%

34%

48%

38%

Services


ANALYTICS

DIGITAL BUSINESS

CYBER SECURITY

MOBILITY


34%

35%

25%

37%

Manufacturing



INDUSTRY pERSpECTIvES technology initiatives by industry

CLOUD SERVICES

APPLICATION OUTSOURCING SERVICES

IT CONSULTING AND PROJECT MANAGEMENT

SERVICES

INFRASTRUCTURE OUTSOURCING

SERVICES

MANAGED SERVICES

SOFTWARE TESTING OUTSOURCING

SERVICES

HELP DESK AND USER SUPPORT

OUTSOURCING SERVICES

68%

41%

38%

35%

30%

19%

16%

29%

51%

46%

54%

64%

69%

72%

2%

7%

16%

11%

6%

11%

12%

INCREASE STAY THE SAME DECREASEThe rise of as-a-serviceIT ExpENDITURE

The increase in IT spending is clearly seen in the IT services sector. The need for agility has grown the interest towards external services offering more flexibility.


CLOUD TRANSITION

CIOs’ spending on cloud-based solutions and application outsourcing is growing. Cloud brings easiness and increases agility of the IT organization and, thus, better supports the entire business.

Cloud-based service models offer a chance for IT to quickly make moves without the need of slow in-house development and software maintenance. This is the option for a modern IT organization who pursues to keep the organization competitive and flexible for future needs in the rapidly changing business environment. Cloud-based service models also attract organizations by their flexible pay-as-you-go-based cost structure without a demand for big investments. As the administration and support for the service is on the responsibility of the service provider, cloud-based services are also easy and fast to deploy.

54%

52%

50%

47%

43%

41%

FLEXIBILITY / PAY PER USE

ON-DEMAND SCALABILITY

COST SAVINGS

CHANGE OF ORGANIZATION’S IT STRUCTURE TO MEET FUTURE REQUIREMENTS

FAST IMPLEMENTATION

24/7 AVAILABILITY

” The world of information will be open, and the biggest cloud vendors could become the banks of the future.

CIO, Engineering and Services

Benefits of cloud adaption


HYBRID AS THE PREDOMINANT CLOUD MODEL

Standardization of IT

Successful cloud transformation requires a standardization of IT environments. Decision on what to rebuild to fit in the cloud, and what to keep outside of the cloud, remains a challenge.

Security

Security, privacy and compliance are a concern for large companies with a lot of legacy. 67% of CIOs and CISOs rate their ability to manage the security of cloud-based services as average or poor.

52% Hybrid Cloud31% Private Cloud17% Public Cloud


bRIDGE bETWEEN LEGACY AND AGILITY

While increased agility is needed, core processes need

to run efficiently and with high reliability. Hybrid cloud enables a controlled way to modernize

legacy.

ExpLOITATION OF DATA

Customer and employee expectations

have changed. They both want to use a device of

their choice, expect fast and easy applications, and high

availability of data.

ENAbLER OF DIGITAL INNOVATION

QUALITY ASSURANCE

In rapidly changing business, IT organizations need to be able to integrate platforms with flexible cost structure,

less manual work, and minimal error.


Digitization of processes and business models require agility and faster time-to-

market.

WHY HYbRID CLOUD? 4 drivers according to CIOs

” There is a huge amount of data generated by people, cars, devices, business processes, buildings and everything imaginable. Any business with an ambition to prosper in the future and be competitive needs to understand this: invest in analytics and value the information.

Director, Business Intelligence, Technology, Media and Telecom

BIG SMART DATA


THE VALUE OF DATA

Data and analytics offer lucrative opportunities for business transformation. Analytics is no longer used to just explain the past; it is now applied to the present and to predict the future. This explains analytics being high on the list of investment priorities of forward-thinking companies, and analytics projects generally having the support of the C-suite.

The amount of data is growing exponentially. CIOs are concerned about being simultaneously data rich and information poor. The quality of data has already been recognized as one of the development priorities by IT management.

Data is an asset and it needs to be embraced for its worth. Many companies miss the actual purpose of data - the business benefit of it. In the same way raw materials are turned into finished products, there should be a constructed data value chain through which data is managed from its initial capture to monetization. For the organizations that are after comprehensive data utilization, investments are focused, for example, on dashboards, self-service analytics, data visualization, and mobile analytics.

MAIN DRIvERS FOR ANALYTICS pROjECTS44% Improved visibility of financial and operational performance

39% Ability to predict trends and new business opportunities

39% Faster response to changing market environment

38% Improved customer engagement

TOp3 DATA-RELATED INvESTMENT pRIORITIES49% Data integration

44% Master data management

38% Data quality management


ANALYTICS THROUGHOUT THE ORGANIZATION

Analytics is increasingly applied in different business functions for varying purposes. It is a strategic development initiative that offers an opportunity to enhance overall company performance through fact-based, faster decision making and increased process efficiency. The success of analytics projects is not guaranteed. It may be due to lack of support for CIOs from business management or incapability to evaluate the data representation and its credibility for decision-making.

As analytics involves different business functions, cross-organizational project management brings its own challenge. For analytics projects to succeed, the entire business management must be engaged to ensure the needed support for change.

” Analytics today should go across the entire enterprise and not just be focused on separate departments or divisional reporting.

Head of the BI Program, Technology, Media and Telecom


Spread of decision-making in analytics projects

32% IT31% Finance14% Business8% Marketing & Sales7% Operations4% HR 3% R&D1% Other

32%

31%

14%


INTERNET OF THINGS

THE DATA GENERATOR

Internet of Things is enabling data flow on an unseen scale. IoT will increase its position in development priorities as new opportunities for innovative business models and services, and revenue streams are recognized. Current IoT projects are mostly led and executed by the IT department. However, IT departments cannot drive the change to IoT deployment alone, close cooperation with the business is a must. IoT technology is embedded in the physical assets across the business and the whole organization needs to be involved in order to succeed.

Expected Benefits of IoT Investments

51% Improved customer service quality

48% Creation of new digital products and services

46% Creation of new business models and revenue streams

42% Improved decision making through the efficient use of data

41% Reduced operational costs


Spread of decision-makers involved in IoT projects by function

41% IT20% business11% R&D10% Operations6% Marketing & Sales12% Other

41%

20%

11%

” Technology makes everything almost possible. The rest is up to your people. It’s about how they are adopting innovations and new technologies. In the end, your people are the ones who will determine how successful you will be.

IoT Director, Technology


Wide-spread IoT awareness in the organization is critical. This

is best achieved if the digital agenda is visibly led by the

CEO.

Dynamic IoT ecosystems are shaping up fast. Partnering

with customers, vendors, and standards, organizations will

increase scalability.

Speed and risk taking are essential. Incumbents need

a disruptive mindset and start-up culture to encourage

experimentation and prototyping.


What is required from an organization TO SUCCEED IN IOT pROjECTS?

” Take a look at your business model from the outside and ask yourself: If I wanted to disrupt this, how would I do it? If you’re able to see that, everybody else is able to see that. Then it’s just a matter of time.

CIO, Transportation and Logistics

CUSTOMER-DRIVEN IT


FIGHTING DISRUPTION

WITH DIGITAL

To survive in the long-term, every business needs to become a digital business. Digital business requires seamless cooperation between IT and business to explore the possibilities digitalization enables. Agility and bimodal operational model, being the mantra in today’s IT, are essential in business modernization and maintaining competitiveness.

Being fast and having the capacity to flexibly utilize different technologies in changing environments is crucial but companies need to be proactive, not just reactive. The competition is not only about responding to disruptions there may and will occur, it is about finding the best ways to leverage digital and especially about who is able to do it first, do it best, and to constantly develop it better. Being fast and flexible and having the needed capabilities in use at the right time entails cooperation outside your own organization with external service providers. It further develops the role of modern IT organization from being an internal service provider for the business to being an intermediary whose focus is in the business outcome rather than in the in-house development.

TOp5 CIO priorities in digital business

58%

51%

49%

44%

39%

MOBILE PLATFORMS AND APPLICATIONS

NEW DIGITAL BUSINESS MODELS

DIGITAL ANALYTICS AND CUSTOMER INSIGHT

INTEGRATION OF CROSS-CHANNEL PROCESSES AND DATA

LEAN AND AGILE SERVICE DEVELOPMENT


Chief Information Officers and Chief Executive Officers share the main responsibility of leading digital projects. As digital technologies are not only transforming business processes, but also strategies, CEOs are taking an increasingly visible role in leading the digital programs. Compared to our previous survey in 2015, the amount of Chief Digital Officers in large organizations has increased. Speed and risk taking are essential. Organizations need disruptive mindset and a culture that encourages experimentation. An increasing amount of organizations are engaging in ecosystems and partnerships with start-ups to speed up the digital innovation.

2015

CIO

CEO

CMO

CDO

Other Executive role

34% 32%

27% 30%17% 14%

8% 13%13% 10%

2016

LEADING THE DIGITAL AGENDAspread of executives leading digital development


BEFRIENDING

THE CUSTOMER

Customer-driven IT is a reality according to the highest IT decision makers. 61% of them state that improving customer and end user experience is a current IT priority (59% in 2015). To outreach the role of an internal process executor to the strategic business partner, IT needs to apply an operating model that best supports the IT operations, serves the business, and values the end user. Thus, design thinking is increasingly important for a modern IT organization.

Legacy modernization and ERP stay on the CIO agenda. Almost half of the researched decision makers cite having legacy modernization projects in their near future priorities. As in any current technology projects, fast time to market and user-driven approach are essential. Brave architectural decisions are required as CIOs are rethinking their approach to complex system developments. Leveraging hybrid IT environment is the solution for many IT organizations.

Key initiatives in core systems and architecture

45%

41%

41%

34%

28%

LEGACY MODERNIZATION

ERP PROJECTS

ENTERPRISE ARCHITECTURE PROGRAMS

DEVOPS IMPLEMENTATION

ROBOTIC PROCESS AUTOMATION

11%

SERVICE INTEGRATION AND MANAGEMENT (SIAM)” You can’t start the design from the IT perspective. You must

always take a look from the end user and business perspective. Good design is always a solution based on the outside perspective.

Vice President and Head of IT, Technology


ALL IN MObILE

Mobile is fast becoming the primary media for everyone, executives, employees, and customers alike. Mobile devices are the priority for both employees and customers which highlight the importance of user interface in customer experience management.

Mobile security is also recognized as one of the priorities of CIOs and CISOs in cyber security context as mobile security is considered as critical for the decision makers.

TOp3 MObILE bUSINESS INITIATIvES46% Integration of legacy systems with mobile applications

39% Mobile applications for customers

31% Mobile applications for internal communications

” Everything we ́re doing is going mobile. When you think about where our customers reach us, it’s all on the smartphone.

CIO, Media

TOp3 GOALS FOR MObILITY INvESTMENTS62% Improved operational efficiency

59% Improved employee productivity

58% Creation of a flexible work environment


” I can help you build a very secure fort. But if you decide to leave a window open, I cannot secure you anymore. Educate your people.

General Manager, Group IT, Industrial Products and Equipment

SECURING THE ORGANIZATION


0 20 40 60 80 100

CURRENT STATE OF

CYbER SECURITY

Due to digitalization, cyber security has surfaced as one of the main concerns of the IT department but also made security issues a significant concern for the top management. The majority of IT management believes their own capabilities on cyber security are sufficient but are considering employees the weak link in threat control.

CIOs’ and CISOs’ Insights on Cyber Security

TOP5 Cyber Security priorities of CIOs

57% Data security and privacy

54% Identity and access management

46% Network security

42% Cyber security awareness training

40% Intrusion detection and prevention

LEVEL OF TOP MANAGEMENT ATTENTION ON CYBER SECURITY ISSUES

LEVEL OF IN-HOUSE CYBER SECURITY SKILLS

LEVEL OF CAPABILITIES TO MANAGE SECURITY OF SOCIAL MEDIA USE

LEVEL OF SUFFICIENT INSIGHTS INTO REAL-TIME CYBER RISKS

LEVEL OF EMPLOYEE AWARENESS ON CYBER SECURITY ISSUES


AvERAGE OR pOOR

GOOD OR ExCELLENT

64% 36%

51% 49%

23% 77%

30% 70%

34% 66%

IDENTIFY YOUR CRITICAL ASSETS

You have to recognize all possible consequences of a

successful cyber attack. Make a list of priorities. Identify the critical assets that you have

to protect your company in all scenarios, and also those things that are not going to be terminal

for your business. Develop a cyber resilience plan around

these priorities.

AUDIT YOUR EXISTING CApAbILITIES

Take a critical view on your existing protection plan,

procedures, policies, and your existing tools and capabilities in your organization. Are they up-to-date or are you putting your

company under threat?

ADAPT YOUR STRATEGY

Make sure that your people are fully trained and aware of the risks. What can be dangerous? What are the things we need to deal with? If you want to be a

truly resilient organization, you need an organization that will

flow with the challenges ahead.

ACKNOWLEDGE YOUR vULNERA bILITY

Every protection plan inevitably has gaps. What are the

vulnerabilities? What are the things we need to medicate in case

of an issue?


4 building blocks for

A CYbER RESILIENT ENTERpRISE


FIvE SKILLS that make a great CISO

CISO, Telecom

WILLINGNESS AND AbILITY FOR CONSTANT LEARNING. You need to be able to keep up with the development and be willing to learn from everyone and everywhere.

HUMILITY. You need to be humble to have healthy respect for your opponents whoever they may be, hackers hacking for fun or criminals hacking for profit.

IMAGINATION. You need to be able to think beyond the immediate possibilities in order to look for new, creative solutions.

COMMUNICATION SKILLS. You need to be very approachable and be a good communicator to clearly communicate the risks and also to help prioritize the countermeasures.

HEALTHY IMpATIENCE. The advantage of the opportunity is always stealth, speed and accuracy. Attackers are very quick, but the response tends to be slower. You don ́t know everything immediately and you can´́t block it right away. You need impatience to get things running and keep momentum going.

12345

0

5%

10%

15%

20%

25%

30%

35%

40%

pRIORITY IN 3 YEARS

CURRENT pRIORITY

3D PRINTING / ADDITIVE

MANUFACTURING

WEARABLE TECHNO LOGIES

ADVANCED MANUFACT URING

AND SERVICE ROBOTS

SOFTWARE ROBOTICS AND AUTOMATION

OF KNOW LEDGE WORK

INTERNETOF THINGS

AUGM E N TED REALITY

The Internet of Things has already shown its business potential and forerunner organizations have accepted it on their development agendas. Additionally, we were able to identify five technologies that CIOs are expecting to have a significant business impact in the future.

36%

26%24%

21%19%

18%

26%

12%

8%

12%

6%5%

TECHNOLOGIES SHApING THE FUTUREtechnology trends now and in three years


” We have to be prepared for the new wave of change, for things we cannot even think of today, and remember that businesses are always late and the users are more advanced. Head of Corporate IT Innovation and Digitalization, Retail


Management Events brings together the needs of top decision makers and the offerings of solution providers, generating business opportunities for both parties. The exclusive, invitation-only event concept provides the opportunity to meet the most potential clients in pre-booked face-to-face meetings. The participants of our events are technologically driven leaders of the largest companies in Europe and Southeast Asia.

Annually, our 160 invitation-only business events gather 20 000 leaders and 2 500 solution providers, generating more than 70 000 face-to-face meetings. To identify the responsibilities, investments, and projects of the top decision makers, we conduct 35 000 interviews and receive over 10 000 online survey responses each year.


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