Survey data from The Hackett Group show how IT leaders are supporting the business side of their organizations.
Enterprise IT leaders have a lot of different goals and projects vying for their attention. On the one hand, they need to stay on top of the latest trends and help their companies stay competitive by investing in innovative technology. On the other hand, they also face intense pressure to “keep the lights on” by maintaining high availability on legacy hardware and applications. They need to attract top talent, but also to keep costs low. They need to keep corporate data secure while also making big data available for advanced analytics.
With all these competing demands on their time and budgets, CIOs sometimes find it difficult to prioritize. Which projects and objectives should get their attention? And, which initiatives will their competitors be pursuing?
To answer those questions, researchers at The Hackett Group recently published a report titled The CIO Agenda: Driving Value from Transformation that took a closer look at IT leaders’ current digital priorities. It asked executive management and leaders of information technology, finance, human resources, and procurement organizations at a global set of midsized and large enterprises about their technology priorities.
According to the report authors, most of enterprise IT’s current projects fall into four broad categories: digital business enablement, future-state IT transformation, harnessing disruptive technology and operations excellence. Within those four categories, IT leaders are pursuing eight key priorities in their efforts to support their companies’ business objectives.
Here are the top eight IT priorities:
1. Protect enterprise against cybersecurity risk
With security breaches in the news nearly every day, enterprises are more spooked than ever about possible cyberattacks. An F5 study of just 433 incidents found that attackers had made off with 10.3 billion usernames, passwords and email accounts. To put that in perspective, that was more records than there are people on the planet. Attackers also breached 280 million Social Security numbers, which is the equivalent of 86.5% of the population.
Given those numbers, it’s no wonder that Gartner “forecasts worldwide enterprise security spending to total $96.3 billion in 2018, an increase of 8% from 2017.” Organizations don’t want to be among the many that have recently experienced breaches, so they’re making protecting against cybersecurity risk their number one priority.
2. Support enterprise digital transformation
The phrase “digital transformation” means different things to different people, but The Hackett Group defines it as “the creation of business value by improving customer experiences, operational efficiency and agility by fundamentally changing the way organizations innovate, operate, deliver products and services, engage with stakeholders and execute work, using digital technologies as the enabler of holistic transformation.”
With that definition in mind, the business leaders surveyed said supporting enterprise digital transformation was their second most critical IT priority, and more leaders had digital transformation projects underway than another type of project. That’s important because the report also found that “74% of respondents expect digital transformation to disrupt their industry and change the competitive landscape, while 82% expect it to fundamentally change the operating model of their business.”
3. Support enterprise customer-centricity
A big part of that digital transformation involves focusing more on customers and their needs. In the survey, 74% of companies said that they had a customer-focus improvement initiative on their calendars for 2018, and they selected supporting enterprise customer-centricity as their third most critical priority. Many also said that one of their key IT staffing priorities for the year was to develop or improve customer-centric design and focus skills.
4. Improve enterprise analytical capability to facilitate information-based decision-making
The fourth most popular IT priority was related to big data analytics. Among the business leaders surveyed, 62% said that their organizations had already adopted advanced analytics, but 56% said that they had only limited adoption so far, while 6% laid claim to broad adoption. Within two to three years, however, a full 94% of respondents expected to be using analytics technology, with two thirds (67%) anticipation broad deployment throughout their organization. That’s an 11.2x increase in broad adoption. Given those numbers, it’s not surprising that nearly half of respondents (47%) said they have an analytics-related initiative on their schedule for 2018.
Many of today’s advanced analytics solutions incorporate artificial intelligence (AI) and machine learning capabilities, and the survey also found dramatic increases in adoption are likely for these technologies. Currently, only 13% of those surveyed had adopted cognitive computing or AI, and none said their organizations were using AI widely. However, 67% expected to begin using the technology within three years, a 5.2x increase.
5. Improve enterprise agility
For years, organizations have been talking about their needs for agility, and that doesn’t appear to be changing anytime soon, as it ranked as the fifth most critical IT priority. For enterprise IT, two different kinds of agility are important: business agility (the ability of the organization as a whole to respond to changing market conditions) and IT agility (the ability of the information technology team to respond to changing demand from the business). Both are important, but The Hackett Groups says that many IT teams don’t have either capability. “Data savviness, agility/ability to change, and creativity are increasingly critical skill sets that are lacking in most IT organizations,” the report stated.
6. Improve end-to-end business process integration and performance
One of the ways that enterprises are using analytics is to improve their business processes and overall performance. They hope to harvest insights that will help them become more efficient, faster, and more responsive to customers.
They are also adopting emerging technologies like Internet of Things (IoT) solutions and robotic process automation to help them achieve this priority. Among those surveyed, 31% had some IoT deployment today, but within two to three years, that could increase 2.2 times to 67%. Similarly, only about a quarter (26%) of respondents are currently using robotic process automation, but 54% (2.1 times as many) plan to do so in the near future.
7. Support enterprise innovation strategy
As organizations go through the process of digital transformation, many are looking to their IT departments to support — or lead — innovation. “One of the most notable changes from 2017 to 2018 is the increased focus in the coming year on innovation in companies’ business model, products or services,” said The Hackett Group’s report. “An unprecedented 71% of companies report having a major product or service portfolio innovation initiative on their 2018 enterprise calendar; 64% plan to transform their culture, and 53% will innovate their go-to-market strategy. These innovation-oriented initiatives are now more prevalent than traditional initiatives such as optimizing SG&A cost or rationalizing the supply chain and operations.”
The report also found that IT’s fifth most common staffing priority for this year is to develop or improve innovation skills.
8. Prioritize enterprise technology investment
Finally, IT also plays a key role in helping enterprises decide which technological solutions to purchase in their digital transformation efforts. The report stated, “Function leaders will educate stakeholders on how emerging technologies will disrupt business as usual and potentially provide a competitive edge to those willing to take a calculated risk.”
The good news for IT leaders is that most of them are getting budget increases to help them afford those emerging technologies. On average, respondents expect an average 1.8% increase in operating budgets to shepherd their companies through digital transformation.
(Cynthia Harvey – informationweek)
