As we move into the next decade, the role of technology to transform businesses will continue to expand exponentially. Technology leadership roles will need to be redefined and new roles will be created. Whether you are a CIO, a CTO, a chief data officer, or any other technology leader, your sphere of influence will potentially grow in 2020 and beyond. Being aware of, and acting on, these game-changing trends with a laser focus on either making or saving money by delivering concrete business outcomes will be the difference between success and failure.
IDC's research shows that only 19% of organizations are generating net new revenue streams from digital investments, despite spending $1.2 trillion on digital transformation (DX) initiatives in 2019. In parallel, only 25% of organizations are delivering bottom-line growth from their technology investments. IDC refers to these organizations as the "digital moneymakers."
IDC believes the anchor point to deliver business value from technology investments will shift from applications (which encouraged data fragmentation) to platforms (which will enable a more seamless flow of data across internal and external environments).
As part of this, IDC believes a new technology architecture will be critical for organizations aiming to deliver business outcomes from their digital investments. The key to delivering business value will shift from applications (which encouraged data fragmentation) to platforms (which will enable a more seamless flow of data across internal and external environments).
The CIOs, CTOs, and chief data officers of the future will need to understand the potential of this approach to chart the next phase of their personal careers and take technology leadership to the board across all industries.
The White Paper showcases the five key trends and looks at the role this new platform architecture will play.
IDC research shows that only 19% of organizations are delivering net new revenue streams from digital investments and only 25% are reducing costs. These organizations are the moneymakers and money savers.
There is often a major overestimation of the maturity of organizations in terms of how modern and flexible their technology architectures actually are. Although there is plenty of discussion about leveraging emerging, innovative technologies to deliver new revenue streams, the reality is that most companies are still battling with complex (and costly) legacy systems. Organizations are often constrained by having to untangle this legacy, and new technology initiatives become what IDC calls islands of innovation — entirely disconnected from core IT and often stuck in proof-of-concept jail. This is a short cut to a dead-end, as there is no way of getting to scale. To get out of this "PoC jail," a next-generation technology architecture will be required — one that is platform oriented. The trick to monetizing digital at scale based on this technology platform-oriented business model is creating an integrated approach that brings the back office closer to the front office, thereby leveraging the multiplier effect that platforms have on business value as they enable the flow of data across the value chains of the future.
The integration capabilities of the platform can be used to fast-track integration across all the business applications, systems, and apps distributed across on-premises, hosted, or public cloud. This will enable the creation of new workflows leveraging information across legacy and SaaS applications to build custom use cases on top of core functionalities.
By 2020, 80% of enterprises will create data management and monetization capabilities, enhancing enterprise functions, strengthening competitiveness, and creating new sources of revenue.
Much has been said about data being the new oil that will fuel businesses in the future. But the reality is that it's not about the amount of data that organizations have access to, but how effective their decisions are based on that data. Data alone will not be the new oil — intelligence will fuel the future enterprise. Organizations that can create intelligent business processes to deliver contextualized and consent-based experiences will be the winners in this new data-driven world.
The data management capabilities of the platform enable a deep understanding of all data, including its definition, meaning, provenance, lineage, and relationships. The data pipelines of the future will come from both internal and operational data sources, but also from the external world (in short, experience data from the ecosystem). To have such awareness of the data, technical metadata needs to be augmented with business context to identify the most valuable and most sensitive information for businesses by integrating data from many sources. This unified data management architecture (including the master data definitions) needs to provide the basis for intelligent technologies to be embedded within core applications to support the creation of more agile business processes.
From 2018 to 2023, 500 million new apps will be created — equal to the number built over the past 40 years. This app explosion will require the agile development of innovation capabilities. This includes the developer and user experience services that will rapidly enable the creation of net new applications.
To balance the need for speed with the need for control, organizations will have to put in place a standard framework across all technology capabilities, regardless of the deployment model. This framework should leverage a governance-as-code approach to generate dashboards and automatic alerts to provide visibility and auditability for the key stakeholders in IT and the business.
IDC believes that staying relevant in this environment requires a cloud-based application development and deployment environment that accelerates the delivery of new digital products, services, and experiences linked to those increasingly intelligent business processes. As we move to a technology era increasingly dominated by hyperscaler cloud platforms, there is a requirement to be open to these platforms to deliver specific business use cases that are critical to the business. Therefore the business innovation capabilities of the platform (in a multicloud world) will be critical to deliver net new applications to the market.
Sixty-five percent of organizations will aggressively modernize legacy systems with extensive new technology platform investments through 2023.
During the era of experimentation for digital transformation, standalone projects based on emerging technologies were frequently driven by different business departments (LOBs) and were created in silos. Security was an afterthought for these initiatives, and so they exposed many vulnerabilities to the organization. In addition, scarce innovation resources were spread across multiple pilots and many digital efforts were failing before they even got to production.
To bridge the scale gap, organizations set up a new digital structure to focus on the new while ringfencing the old enterprise IT environment (seen as an operational bottleneck) to deliver some level of agility.
It became clear that not only do these systems, processes, and people need to be integrated as part of an enterprisewide platform, but also that the core needed to be modernized to provide the necessary agile backbone, infused with intelligence, to help redefine and create new business processes in a more dynamic fashion.
IDC predicts that by 2025, at least 90% of new enterprise application releases will include embedded AI functionality. Additionally, the development of use cases for technology leadership needs to be supported by the platform, as it enables the extension of existing applications and development of net new capabilities.
By 2023, 30% of organizations will have defined a new technology leadership role combining CIO, CTO, CDO, and innovation functions to orchestrate the digital strategy in their organizations.
IDC believes the "use case" is the anchor that will enable technologies and business outcomes to drive technology leadership capabilities to the next level.
IDC predicts that 75% of organizations will be digitally transformed over the next decade — and that the rest will fall out of business. The difference between the winners and losers will be an organization's ability to build out a data-driven, platform-enabled, and ecosystem-centric business model. To win this 10-year race to become a digital business, organizations need a new way of thinking, acting, measuring, and reporting success. The outcome will be a shift from traditional linear value chains to a model where all ecosystem interactions are part of a continuous feedback loop underpinned by a platform that enables the seamless flow of data across every single person and organization in the value chain.
This platform is a flexible application infrastructure architecture that enables the orchestration and automation of end-to-end business processes and the creation of a launchpad for business innovation capabilities.
This is done by leveraging the following key capabilities:
Use the power of the platform to deliver business value
International Data Corporation (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 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company.
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Please note that this White Paper was published before these challenging times became a reality across the global economy. However, the research, insights, and recommendations provided are all very much still valid. The imminent economic downturn globally will actually compel organizations to continue to invest in their digital initiatives — but the pressure on financial outcomes will increase. As part of this, IDC believes that technology will play a critical role in the recovery of the economy, as the pandemic has highlighted the potential of digital to multiply our value through intelligence, data, and a shift to platform-based business models.
As an IT executive, your sphere of influence will potentially grow in 2020 and beyond, but the new normal requires a new mindset. In case you are still wondering which areas of your business are ideal for adoption of disruptive technologies, we invite you to start asking different questions to uncover the potential value that digital initiatives can deliver. This will require an unwavering focus on the following:
As these challenging times fundamentally shake up how we live, learn, socialize, and work, governments are taking drastic measures to keep citizens safe and healthy. IDC believes that the response of organizations in these uncertain times will shape the market perception of their brand in the next 10 years — technology leaders have a unique opportunity to define the future of business and society in a fundamentally positive fashion.