CIO Summit 2013 - David McNally

Competing in 2020:
6 Initiatives CIOs Must Get Right Today

David McNally
Vice President, IT Executive Advisor
February 6, 2013

Agenda

 2020: Where We Are Headed

 The 6 Initiatives CIOs Must Get
Right in 2013

 The CIO Change Agenda

 Essential Guidance

 Questions and Answers

© IDC Visit us at IDC.com and follow us on Twitter: @IDC and @IDCInsights 2

The 3rd Platform Shift:
From IT Productivity to Business Productivity

Smart Omnichannel Smart
Public Buildings Retail Cities
Connected
Safety
Health
Smart Connected Mobile
Vehicles
3rd Platform Implications for CIOs
Grid Payments

Systems Services

IT Business
Intelligent Industries
Agility Agility

Information Innovation

3
3

On the Right Track:
CIO’s 2013 Personal Agenda
In 2013, which of the following goals will be top of your personal agenda as CIO? Select top 3 goals.

Focus the IT organization more on business
strategy than technology strategy
Foster a culture within IT that drives more
innovation
Foster a culture within IT where IT more often
provides a qualified "yes" to the business

Better align IT with the business

Focus IT organization on better understanding the US
requirements of the consumers
WE
Carve out more IT budget for new
projects/innovative projects Total
More effectively attract new IT talent

Re-skill existing IT talent

Implement a more rigorous process to evaluate
new ideas for IT to take on

0% 5% 10% 15% 20% 25%
n = 70
WE respondents = 21; US respondents = 49
Source: IDC 2013 CIO Agenda Survey, Fall 2012

Agenda


Right in 2013





#1. New Working Relationships with the Business

By 2016, LOB executives will be directly involved in 80% of new IT investments

Of the new internal IT projects initiated at your company this
Prediction year, what percentage will be led under the following
 Companies will initiate an average of 40 new scenarios?
IT projects in 2013 (with or without IT)
Project solely led / managed
 58% of IT investments in 2013 will involve by IT
42%

direct participation by LOB executives
 Businesses participation in IT projects will Project jointly led / managed
33%
grow to 80% in 3 years by IT and the LOBs

 The implications are vast on how the CIO
works with the line of business Project led / managed by
LOBs, but subject to review 17%
Situation Assessment by IT

 Cloud, social and mobile services are the
great equalizers of the corporate machinery Project solely led / managed
by the LOBs
8%
 Notable instances of CEOs & CFOs driving
the migration to Cloud and Managed Services 0% 10% 20% 30% 40% 50%
N = 57
Source: IDC 2013 CIO Sentiment Survey, Fall 2012

It is time to revisit IT Planning, Governance,
and Portfolio Management methods


#2. A “Cloud First” Strategy

70% of CIOs will Embrace a “Cloud First” Strategy in 2016

Prediction
Cloud Agenda Items for 2013
 Today, only 23% of enterprises have a “cloud
first” strategy for new IT purchases
 Cloud architecture standards, cloud service
management processes and cloud migration
paths will spur grow
 Experience in cloud initiatives will address the
current “skills gap” identified by many CIOs
 CFOs Will Accelerate “Cloud First”
Situation Assessment
 Software vendors aggressively investing in cloud
 SaaS provides a direct linkage between solutions
and business demand in a self-service model
 Cloud will be required platform for some industry
specific analytics based solutions

n= 47
Source: IDC CIO Cloud Study. April-June, 2012


#3. A Mobile Application Strategy
By 2013, one third of all new application development will
By 2013, one third of all new application development will target a mobile form factor
target a mobile form factor

Prediction
 In 2013, 33% of all new apps will target a mobile What % of new Apps will be for Mobile
form factor Devices vs. Non-Mobile Devices

 IT must decide on the Mobile OS and device
strategy as 46% of mobile app budget goes Non-Mobile Only Devices 67%
towards maintenance
 More apps, integration and multi-platform
development will drive 60% of new mobile app
development to IT services providers in 2013.
 Enterprise mobile app penetration will force either: Mobile Only Devices 17%
a move to a standard corporate-liable devices (for
compatibility) or multi-platform development
Mobile and Non-Mobile
 “Mobile devices are the new primary design point” Devices 16%
 Development portfolios skewed toward
customers, sales, and service functions
0% 20% 40% 60% 80%
IDC’s CIO Mobile Survey
Fall, 2012


#4. An Enterprise Social Network Strategy

Enterprise social networks move beyond pilot stage with business sponsorship

Prediction
 CIOs will seek out business sponsors in 2013 to move
enterprise social networks beyond the pilot stage
 Social tools will be integrated with enterprise apps
connecting people inside and outside the firewall
 Solutions for collaboration and file sharing will remain
popular projects, owned by the CIO
 E-mail persists but becomes more social
 Cultural fit is essential to success
 Business case can be difficult - 82% of CIOs are
unable “. . . to accurately measure the ROI of our social
business apps,” according to IDC social survey.
 Security, compliance and IP protection will remain
barriers. 68% of U.S. CIOs have no formal policies
regarding data retention of social data in place
 Social business maturity often starts with
experimentation (a pilot)


#5. An Analytics Strategy for Intelligent Solutions

Big Data & Analytics projects will be like no other IT project

Prediction The Challenges CIOs Will Face
 Get ready for a whole new IT project - more Business Analytics Challenges
experimenting, less predictive outcomes; Insufficient computing resources 22%
shortage of talent; and, 60 day project plans. High costs of technology 47%

 Talent (both IT and analytics) needs to be able Data integration is very complex 40%
Insufficient specialized IT skill-sets
to create answers to undefined questions required for implementation 31%
Design and deployment time is too
Situation Assessment lengthy 28%
Insufficient specialized analytical skills
 Big data/analytics projects are changing the way required for use 27%

businesses make decisions Poor data quality 22%

 CIOs must understand how to succeed
Big Data Challenges
 Data architecture, data quality and data Deciding what data is relevant (what
25%
governance are major gaps in large enterprises data to keep/store and what data to…

 The technology will be easy when compared to Cost of technology infrastructure 13%
the business case Not having enough or the right IT skills
11%
to manage Big Data projects
 Seeking major funding for a rapid development Not having enough or the right analytics
10%
with no certain value staff to analyze the data
Not knowing how to decide which
technology is best/most appropriate… 9%
Lack of business support and/or
business units do not understand the… 9%

Source: IDC 2012 Vertical IT & Communications Survey
N = 2699

#6. IT Talent for the 2020 IT Organization

IT Talent will be become the biggest barrier to innovation

Prediction
CIOs have a wide range of IT talent issues highly Out of the IT FTE in 2013, what percent
correlated to location and industry including: do you estimate will be allocated to the
 Recruiting following activities?
 Retention
 Talent Development – Skills and Leadership 2013 2018
 Performance Management
Inability to access new skill sets will limit an IT
innovation 49% 47%
51% 53%
CIOs will need to cultivate best practices in IT
talent strategies:
Building IT Systems
 Assess current state and today’s needs
Building IT Systems

Governing and Managing IT Systems Governing and Managing IT Systems
 Define future organization and skill needs
 Create the internal talent strategy N = 57
Source: IDC 2013 CIO Sentiment Survey, Fall 2012
 Re-think sourcing strategies to fill the gap
 Assessing external IT talent


Agenda


Right in 2013





What Will the CIO’s Role Look Like in 2020?
By 2018, 50% of Business Execs will view the CIO as a Business Innovator

Prediction
 By 2018, 50% of business executives will view their CIO primarily as a partner for business
innovation and improvement. The other 50% will see them as owners of costs, risk and services.
 While CIOs may need to play all three roles, the key is business perception. This has broad
implications on the CIO Agenda.
 The transition from a portfolio of systems & technologies to a portfolio of services positions the
CIO to engage in business innovation and improvement.

Operational CIO Business Services Manager Chief Innovation Officer

1993 90% 10% 0%
2013 70% 20% 10%
2018 10% 40% 50%
Goal Keep the Lights on Provide an agile portfolio of Business Innovator
Business Services
Focus Costs and Risk Service Excellence Business Value

Jobs Scope Data Center, IT Ops Both Business and Technology Business Processes,
Service Catalog Capabilities and Analytics


CIOs can own the Change Agenda to reshape IT

• Run IT Like a Business
• Become a world class provider of Business Services
• IT Strategies that transform IT (if not the business)
• Sell the business value of Agility and the 3rd Platform
• Plan your Legacy Migration Strategy
• Get out of the data center business
• Move to a Zero Capital funding model
• Foster 3rd Platform Innovation in IT - Cloud, Mobile, Social, and Big
Data / Analytics

“If we don’t sell change someone else will!”

14

Run IT Like a Business – Account Management
Separate IT Systems from Business Services

Business Relationship Managers
• Source Information Services both internally and externally
• Develop Service Metrics
• Serve middle management – the source of much innovation
CIO

Relationship Arch. IT App. Dev. Infrastructure Ops.
Mgt. Management
Services
“Business Service “IT Service Management -
Strategy, Sourcing and Competing for Services”
Innovation”

Architecture manages an Apps, Infrastructure & Operations
Extended Information Architecture compete for market share
and Service Integration

15

Run IT Like a Business – IT Strategy
Strategy Maps can link the IT Agenda to the Business Plan
Theme: Pricing Elasticity based on Market Insight

Financial Gross Margin Sales
Improvement Efficiency
Business
Driven
Customer

Customize Special
Pricing Offerings
Technology Operational

Top down
Strategy Market-based
Product Pricing

Mobile Pricing Market
Tools Analytics

** Based on The Balanced Scorecard, Kaplan/Norton 16

Run IT Like a Business – IT Strategy
Strategies can also target Agility, Service Integration, etc
Theme: Data Quality and Accessibility

Capabilities Analytics /
Insights
Capabilities
Driven
Solutions

Mobile Pricing Market
Tools Analytics
Architecture Technology

Bottom Up Enterprise Business
Strategy Data Intelligence
Warehouse Tools

Data Integration
Architecture
Cleansing (EAI & ETL)

** Based on The Balanced Scorecard, Kaplan/Norton 17

Fostering 3rd Platform Innovation in IT
Early Adopters took small steps in the right direction
Cloud
• Migration to Public Cloud for development and testing
• Architecture reviews, Service Integration and Data Integration for SaaS solutions
• Update Sourcing practices to respond to Cloud Services
Mobile - 1/3 of all new Application Development will target mobile
• In-house mobile development pilots
• Moving field, sales, and support apps to mobile solutions
Social
• Adoption of File sharing and Collaboration tools both within IT and for projects
• Offer solutions to remote worker, sales and field operations
• Develop Unified Communications solutions
Big Data / Analytics
• Adoption of Open Source Tools and Cloud Services for Big Data
• Rewriting legacy apps in Pig Latin
• Identify dynamic data sources

18

Agenda


Right in 2013





Essential Guidance
“IT’s about the Information not the Technology”
 Redefine the Role of the CIO before the business
does!
 Manage Business Relationships the way your Adapt and Thrive!
best vendor would
 Develop Business Service Management metrics
 Develop IT strategies that create Agility
 Foster 3rd Platform innovation within IT
 Plan for an Extended Enterprise Architecture
 Get ready for IaaS as a CFO imperative
 Next Gen Sourcing and IT Talent strategies will
enable the transition to Information Services

The right portfolio of services and systems
will enable the agile enterprise and
separate winners from losers

20

Questions and Discussion

David McNally
Vice President,
IT Executive Advisor

dmcnally@idc.com

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 21

IDC Overview
 IDC is the premier independent global market intelligence, events, and
advisory firm for information technology, telecommunications, and
consumer technology markets

 IDC is a subsidiary of IDG, the world's leading technology media, events
and research company

 IDC has been delivering IT intelligence, industry analysis, market data, and
strategic guidance since its 1964 founding by Patrick McGovern

 More than 1,060 IDC analysts, including in-house statisticians and
economists, provide global, regional, and local expertise on technology
and industry opportunities and trends in over 110 countries

 Our multilingual, multicultural workforce surveys over 300,000 technology
users and decision makers annually, delivering unrivaled coverage

 We advise IT professionals on making more effective technology decisions
by providing insightful fact-based research and consulting services

22

IDC’s IT Executive Programs
Why IDC IT Executive Programs
IDC's IT Executive Programs consists of a family of
research programs intended to help today's time-
constrained IT executives make more effective
technology decisions.

The program offers accurate and timely fact-based
research and programs that will assist IT executives in
mitigating technology risks, maximizing the
effectiveness of IT investments, identifying and
capitalizing on new opportunities, and bringing forth
solutions that are aligned with the organization's
business objectives.

Our IDC IT Executive Program offers you:
 Flexible options for a program that is right for you
 Easy analyst access
 A CIO Advisor
 Peer group through the CIO Executive Council


IDC’s CIO Agenda Practice
Why IDC's CIO Agenda
IDC's CIO Agenda research program recognizes that
an IT executive's time is better spent engaging the Working with the Innovation Maximizing IT’s
business around IT than managing day-to-day IT Business Strategies Performance
operations.

CIO Agenda supports IT executives in creating
a business-based IT organization by providing
strategies, best practices, frameworks, and advice Replatforming Deriving Business Planning for End Incorporating Social
around the most important issues on a CIO's Around the Value through User Devices of into Workplace
agenda: Cloud Information the Future Collaboration
 Emerging IT Strategies
 Case Studies on IT Transformations
 Peer Benchmarking on Best Practices
 IT Performance Metrics
 IT Spending Surveys
App/Dev Governance, Risk &
IT Enterprise Service Mgmt
Architecture and Compliance
Architecture Strategies
Strategies Framework

Data Mgmt, IT Staffing & IT Sourcing &
IT Financial Mgmt
Governance & Organizational Procurement
Strategies
Information Security Strategies Strategies


IDC’s IT Benchmarking and Sourcing Practice

Why IDC for Benchmarking and Sourcing
IDC's Benchmarking and Sourcing research is a set
of solutions designed to ensure that your technology
purchasing and deployment decisions are optimized.

With 50% of the Fortune 500 companies having
accessed our research, IDC is the pioneer in helping
organizations establish best in class and
benchmarking metrics.

Our IT Benchmarking and Sourcing research will
enable you to:
 Drive spending efficiencies to allocate savings
towards innovation
 Get the best pricing for your strategic IT
investments
 Validate costs against peers
 Stay ahead of market trends within the IT
industry


IDC’s Mobility Practice
Why IDC for Mobility Decisions
Our fact-based global research team of 20 full time IDC’s Mobile Device Decision Framework
analysts and over 100 contributing analysts worldwide
covering mobile devices, network infrastructure,
telecommunication services, software, and
semiconductors can help you with the following mobility
decisions:

 How is mobile technology transforming the way our
organization needs to interact with customers,
employees, and partners?
 How do I manage corporate-liable and employee-
liable devices?
 What is the threshold for Corp App Store adoption?
 What are my organization's must-have security,
access management and compliance features for
mobility?
 What are the different usability functions and security
requirements for different workers and types of
information?
 What security components do I incorporate into an
app?
 What capabilities can mobile management systems
provide to support CIO needs?


IDC’s Cloud Practice
Why IDC for Cloud IDC’s Cloud Progress Monitor
Our fact-based global research team of 33 full time
covering cloud applications, platforms, infrastructure and
service around cloud help you with the following cloud
decisions:

 How do organizations assess their readiness for cloud?
 What impact should cloud have on the data center?
 What should organizations be looking out for in cloud-
based service-level contracts?
 What strategies should organizations deploy to ensure
optimal cost/performance in their cloud contracts?
 What are strategies for buyers to link contracts and
payments to user success?
 What options do companies have to protect their data
and IP in cloud deployments?
 What do organizations need to know about secure
cloud transactions?

Source: IDC Cloud Study, 2012


IDC’s Big Data and Analytics Practice
Why IDC for Big Data and Analytics
Our fact-based global research team of 7 full time Big Data/Analytics Challenges
covering analytics and data management
software, industry applications, server and storage
infrastructure, high performance computing, and
professional services help you with the following big data
and analytics decisions:

 How do I measure the readiness of my organization
for effectively leveraging big data trends and
technologies?
 How have my peers harnessed big data technologies
and trends?
 What best practices are emerging?
 How have others defined and generated value?
 How will big data technologies evolve?
 What leading indicator should I use to pace the level
of technology evolution around big data?
 How should I ready my IT infrastructure and
architectures?


IDC’s Social Practice
Why IDC for Social Business
Our fact-based global research team of 21 full time social Social Software Adoption
business analysts and over 100 contributing analysts
worldwide covering social customer relationship
management, enterprise 2.0 and collaboration, partner
networks, supplier networks, unified
communications, social commerce and social
infrastructure, can help you with the following social
business decisions:

 How can organizations use social business for a
competitive advantage?
 How do CIOs enable and support the adoption of
social business tools across the business?
 What’s business value can be created by integrating
social technologies with enterprise systems?
 How do organizations overcome the challenges they
face when enabling /allowing employees to use social
business tools?
 How do organizations calculate ROI and risk?
 How do CIOs create an architecture that can change
as our expectations of the social network change?


IDC is the premier global provider of market intelligence, advisory services, and
events for the information technology, telecommunications, and consumer
technology markets. IDC helps IT professionals, business executives, and the
investment community make fact-based decisions on technology purchases and
business strategy. More than 1,000 IDC analysts provide global, regional, and
local expertise on technology and industry opportunities and trends in over 110
countries worldwide.

30

CIO Summit 2013 - David McNally

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