blackstroke

05/02/2016

We've all heard the saying "the customer is always right." There's a more apt saying in today’s digital age: “Customers care about their individual needs, not those of others.” Customers want rich, “right now,” personalized experiences. This "market of one" concept requires you to tailor your engagement to each individual, because that's what they expect.

To provide this capability, IT leaders must ask themselves: “How do I position myself to be able to achieve things that I can’t do using traditional IT?”—because that’s exactly what the business is asking for. The rest of the company needs solutions and services to be available in days or minutes, not in months or weeks. This is a significant shift from the incremental improvements that IT has typically done in the past, and it's driving some of the biggest trends.

CIOs and their teams must become more data-driven to boost customer engagement and advance business goals.

Here's what CIOs should pay attention to:

1. IT MUST BECOME MORE DATA-DRIVEN

We've been talking about Big Data for a while, but what most people call "Big Data" today is actually tiny data compared to what's coming down the road.

More importantly, the term "Big Data" alone doesn't capture the full scope of its real impact on IT. CIOs and their teams can't simply focus on managing the technical complexity of exponentially growing data in their data centers. We must become more data-driven and analytical in all of our decision-making and strategies, because that's what’s happening throughout the organization.

Don't mistake data analytics for a marketing trend. Almost all company decisions—whether about mergers and acquisitions, growth markets, or new opportunities, products, and services—are increasingly made based on data. It’s important that we have the right data at the right time, available to the right people in a way they can understand it. And IT must lead this transformation rather than fall in line with it.

2. IT MUST MODERNIZE ITS CULTURE AND ORGANIZATION

Driving this data-centric philosophy requires leadership that can foster cultural and organizational evolution. We must change the way we leverage technology and engage with our business colleagues outside of IT, at every level of the organization.

As we transition to more data-centric approaches to business and technology, IT can’t stand on a pedestal and say, "We’re doing things for IT reasons." Command-and-control IT culture is dead.

3. IT MUST BECOME MORE BUSINESS-CENTRIC

As CIO, you need to become business leader first—that also happen to have responsibility for IT. And it’s not just the CIO: the rest of the IT organization needs to become more business-centric, too.

You must make decisions—guided by good data—for business reasons more so than technology reasons. The business ultimately wants to be able to make better, faster decisions that enable more direct customer engagement, new revenue streams, and other opportunities. This has been fueled by revolutionary changes in how we operate our businesses and interact with our customers via mobile, social, and other channels.

Again, personalization is pivotal. IT leaders must help lead the business strategies, enabled by technology, that make that kind of market-of-one engagement not just possible but successful.

4. IT INFRASTRUCTURE STRATEGIES WILL CONTINUE TO SHIFT

As we become more data-driven and business-centric, we also need to shed the most tedious tasks involved in supporting corporate infrastructure, and move up the stack to focus more on applications. We'll need to be smarter about how we leverage infrastructure internally within our data centers, but also how we leverage infrastructure services outside of the data center, whether that be cloud or other services.

A couple of things will happen on this front. There will be consolidation in the data center and in leveraging assets outside of the data center, via cloud. We’ll also see an increase in the number of organizations that are getting out of the data center business altogether. This trend really started in the last two years, but it’s picking up significant momentum as we've entered 2016.

These aren't overnight changes. But at IMG we expect far more progressive mindsets among CIOs in 2016.

5. IT SPENDING SHOULD TICH UP, BUT TIGHT BUDGETS WILL DRIVE STRATEGY SHIFTS

Expect modest increases in IT spending. If budgets remain static or even decrease, that might not be all bad. Smart IT organizations will use financial constraints as a change catalyst: "This is the push we needed to do some of these tectonic shifts—we don’t have money to buy more servers, we don’t have money to expand our data center, so the only thing we can do is try and spend the money we do have leveraging cloud services."

At IMG we also believe companies are going to stop buying point solutions and start buying collaborative solutions. So instead of buying best-of-breed for “X” and best-of-breed for “Y,” companies might lower their expectations slightly and get one product that takes care of them both.

6. SECURITY WILL REMAIN HIGH-PROFILE, BUT DON'T EXPECT A WATERSHED CHANGE

Becoming more data-driven and business-centric—and making better decisions as a result—should encompass enterprise security, too. Security has to stop being looked at as a vertical, and instead be viewed as a horizontal—where it’s part of the DNA of every component across the spectrum.

Budget is a significant roadblock, since most companies see security as an insurance policy rather than a strategic priority. If we invest a quarter-million euros in security improvements, what does that get the business? Protection. It keeps us out of the daily press. That's important to some companies. For others, it's harder to connect to the bottom line.

When the CMO tells the CFO or CEO, “I could invest that quarter-million euros to create new revenue streams X, Y, and Z,” who do you think is going to get the money? That’s why security often fights an uphill battle for budget approval, and companies don't act until after a breach occurs.

7. THE INTERNET OF THINGS (IoT) IS STILL IN ITS VERY EARLY STAGES

We'll see a growing number of specific IoT use cases deployed in the enterprise, especially in machine learning, even if widespread enterprise impacts are still out on the horizon.

In the meantime, CIOs should be thinking about how they'll position their teams for a leadership role as IoT enterprise impacts grow. We should be asking questions such as: “How can this help me make better business decisions? How does it help me do something I couldn’t otherwise do?”

8. NEW ENTERPRISE APPLICATION DEVELOPMENT WILL FOCUS ON DATA ANALYTICS

When it comes to application development, we won't see the tectonic shifts we expect in data analytics, culture, and a business-first approach. That's largely because new app dev isn't really where the enterprise is focused at the moment—except for data analytics. New development in enterprise data-analytics apps will eclipse all other software categories in the year ahead.

We'll also see more consolidation of frameworks and architectures. Some will flourish while others fade away, but it's still too early to predict winners and losers on that front.

9. DON'T GET MISTY-EYED ABOUT PUBLIC CLOUD AND THE ENTERPRISE

The cloud will continue on its upward trajectory, but let's clarify a myth: Enterprises are not moving their traditional corporate data centers en masse to public cloud environments, nor will they anytime soon. There are too many other challenges and priorities that companies have to get through to be able to do things like that.

Hosted private clouds will be the most significant opportunity for enterprises. Public cloud tends to draw new development, which is really limited to three categories: web scale, startup, and new development within enterprises, which is a very small percentage of the enterprise footprint and enterprise activity. Hosted private clouds are an interesting alternative for the internal corporate data center, but it takes time to get there.

BOTTOM LINE
None of us has a crystal ball, but we don't necessarily need one: these trends have been brewing for quite a while. As a result, it's really a matter of embracing our leadership roles to capitalize on the opportunities already present, rather than resisting the new realities of IT.