Monday, November 9, 2015

Cloud-Enabled Innovation will Empower and Disrupt

Today, CEOs in all industries and geographies recognize that in 2016 they'll have an important choice to make, regarding the development of a cohesive digital business transformation agenda -- either be empowered by superior cloud-enabled innovations, or risk being disrupted by more progressive market leaders.

The savvy business technology application leaders are already moving from proof-of-concept cloud computing environments to trusting these platforms with their mission-critical workloads. According to the latest worldwide market study by Cisco Systems, this pervasive trend continues to accelerate as demand for cloud resources increase exponentially.

The Cisco Global Cloud Index (2014-2019) forecasts that global cloud computing traffic will more than quadruple by the end of 2019, from 2.1 to 8.6 zettabytes (ZB), outpacing the growth of total global data center traffic, which is forecast to triple during the same time frame (from 3.4 to 10.4 ZB).

Several factors are driving cloud traffic's accelerating growth and the transition to cloud services, including the rapid growth in popularity of public cloud services for business, and the increased degree of virtualization in private clouds which is increasing the density of those workloads.

"The Global Cloud Index highlights the fact that cloud is moving well beyond a regional trend to becoming a mainstream solution globally, with cloud traffic expected to grow more than 30 percent in every worldwide region over the next five years," said Doug Webster, vice president of service provider marketing at Cisco.

Internet of Everything will Fuel Demand

In addition to the rapid growth of cloud traffic, Cisco predicts that the Internet of Everything (IoE) -- the connection of people, processes, data and things -- could have a significant impact on data center and cloud traffic growth.

A broad range of IoE applications are generating large volumes of data that could reach 507.5 ZB per year (42.3 ZB per month) by 2019. That’s 49 times greater than the projected data center traffic for 2019 (10.4 ZB).

Currently, only a small portion of this content is stored in data centers, but that could change as the application demand and uses of big data analytics evolves.

Today, 73 percent of data stored on client devices resides on PCs. By 2019, the majority of stored data (51 percent) will move to non-PC devices (smartphones, tablets, M2M modules, etc).

Private vs. Public Cloud Growth

Public cloud is growing much faster than private cloud. However, throughout the five-year forecast, private cloud will continue to outpace public cloud in its degree of virtualization. With businesses increasingly assessing the cost associated with IT dedicated resources and demanding for more agility, public cloud adoption will rise. The Cisco Global Cloud Index projects:

  • Public cloud workloads are going to grow at a 44-percent Compound Annual Growth Rate (CAGR) from 2014 to 2019 and private cloud workloads will grow at a slower pace (16-percent CAGR) from 2014 to 2019.
  • By 2019, 56 percent of the cloud workloads will be in public cloud data centers, up from 30 percent in 2014. (CAGR of 44 percent from 2014 to 2019.)
  • By 2019, 44 percent of the cloud workloads will be in private cloud data centers, down from 70 percent in 2014. (CAGR of 16 percent from 2014 to 2019.)

Global Cloud Workloads

  • SaaS will be the most popular and adopted service model for public and private cloud workloads, respectively, by 2019.
  • By 2019, 59 percent of the total cloud workloads will be Software-as-a-Service (SaaS) workloads, up from 45 percent in 2014.
  • By 2019, 30 percent of the total cloud workloads will be Infrastructure-as-a-Service (IaaS) workloads, down from 42 percent in 2014.
  • By 2019, 11 percent of the total cloud workloads will be Platform-as-a-Service (PaaS) workloads, down from 13 percent in 2014.

The Global Cloud Index (GCI) is generated by modeling and analysis of various primary and secondary sources. The forecast also includes a supplement on Cloud Readiness Regional Details, which examines the fixed and mobile network abilities of each global region (from more than 150 countries) to support business and consumer cloud-computing applications and services.

Sunday, October 25, 2015

Digital Transformation: Leading a Learning Organization

Forward-thinking CEOs ensure that their organization has access to the latest digital business technologies. But in today’s global networked economy, that’s not enough. If you believe that digital transformation knowledge is power, then fully mastering the ability to apply your IT capabilities into actionable wisdom is infinitely more potent.

The Harvard Business Review (HBR) market research team recently completed a global study of the path that several organizations have taken to develop and deliver the digital learning support resources that their key internal stakeholders both need and want.

In a prior editorial, I described how Digital Leaders are better prepared to cross the skills chasm. In this follow-on editorial, I’ll share the typical roadblocks on the path to digital transformation progress. Plus, I’ll also share some useful recommendations.

Enabling Ongoing Digital Knowledge Transfer

According to the HBR study findings, the biggest barrier to learning about new technology from IT leaders is the lack of an appropriate forum for this knowledge transfer to take place. Forty-five percent of the survey respondent base agreed. In addition, 34 percent said their IT leaders are clearly too busy.

While Digital Leaders face the same barriers as their Follower and Laggard colleagues, they are less likely to lack an appropriate learning forum. HBR says that a key part of the CIO’s focus on digital leadership should include appropriate learning forums for employees across the whole organization.

Furthermore, while social, mobile, and cloud computing tend to get the most attention, when it comes to gaps in digital acumen, it’s all about finding the value in data. Seventy-three percent of survey respondents rated analytics as extremely important to their area of the business. But only 20 percent highly rated their own knowledge and skills of Big Data analytics methodology.

The preferred method of learning about new digital technology -- self-study and independent research -- is a good starting point. That being said, 23 percent of respondents at the Digital Leaders are much more likely than their peers to engage with outside subject-matter experts, while in search of guidance.

Known Best Practices to Increase Digital Acumen

Digital Leaders do a number of things that other companies can emulate. Given that more than 80 percent of the survey respondents are either Followers or Laggards, there’s plenty of room for improvement. HBR believes that all CEOs should personally lead this charge -- from a vision and strategy perspective. And there’s a lot that proactive CIOs, in partnership with others, can do as well.

Proactive Actions for CIOs:

  • Create a digital business advisory board with both internal and outside experts to advise the executive leadership team.
  • Learn to paint a picture of the digital transformation future, and use examples from companies in similar industries to make that real.
  • Embed IT staff in the Lines of Business so that learning happens during the course of work, not just in special meetings or IT training sessions.
  • Create a common lexicon to increase understanding, communicating in language that makes sense from the perspective of business activities and outcomes, not from the IT perspective.
  • Partner closely with key business leaders -- especially the CMO and the head of product development -- to bring together the best from both domains.
  • Identify and make clear which digital transformation knowledge and skills need to reside in the Lines of Business and which should reside in IT.
  • Work with the internal training and development organization to establish both formal and informal learning forums for employees.
  • Embrace a mentoring and coaching framework across the organization, with KPIs built into individual manager performance reviews.
  • Identify and bring in recognized outside subject-matter experts to address specific digital business trends for different parts of the organization.

In summary, HBR says that understanding new technology capabilities is no longer the exclusive purview of the traditional IT organization. Leaders from across the business must learn about and stay abreast of digital business trends, the implications of those trends for their organization, and how to leverage the new technologies.

They don’t have to know how the technology works, just why it’s important and how to use it. Based upon HBR’s assessment, the functional areas that typically have the most need for this type of guidance are R&D, marketing, customer service, and sales organizations.

The payoff for a knowledge transfer effort is compelling: Digital Leaders are expanding into more new markets, growing faster, and increasing their profit margins over their less progressive competitors. Essentially, these are worthwhile business outcomes that every CEO would crave.

Thursday, October 8, 2015

Growing Enterprise Mobility Spend will Reach $1.2 Trillion

Impatient CEOs are demanding more innovation from their business technology leaders, as the digital disruption that's already unseating entrenched incumbents can cause real angst. Some have requested their CIO to move quickly and harness the smartphone device that's in nearly every employee's possession.

What is your mobile-first business strategy? Are you prepared to accelerate your mobile application development efforts? The right answers to these key questions will become increasingly important.

The savvy IT leaders at forward-thinking organizations across industries are already utilizing enterprise mobility software applications to transform their businesses and gain a competitive edge in the Global Networked Economy. Commercial mobile application development is a strategic business tool in the quest to achieve a significant digital transformation.

Leveraging Enterprise Mobility Leadership

According to the latest global market study by IDC, $901 billion was spent worldwide on mobile technologies in 2014. Wireless data and smartphones comprised the lion's share of this spending.

The upside growth is forecast to reach $1.2 trillion by 2019. Excluding consumer spending, the IDC study uncovered the industries that will invest the most in mobile technologies -- including discrete or process manufacturing and professional services.

Combined, these market segments will represent 17 percent of the total market in 2019. The areas of greatest growth, however, include personal and consumer services, media, and the banking industries.

Mobile app adoption may have started with the basic concept of enabling routine communication freedom, but it has advanced and evolved -- many organizations are embracing capabilities unique to enterprise mobility and unique to their particular industries.

IDC says that each and every vertical is different in terms of its underlying industry drivers, barriers, and potential mobility benefits. Industry-specific applications will be a driving force as businesses look for agile solutions that can be easily configured to their evolving requirements.

"More than ever, mobile technologies are empowering workers across industries to connect, collaborate, and create new ways to operate and do business," said Jessica Goepfert, program director at IDC.

IDC believes that this trend goes beyond providing a secure smartphone to every employee, in the hope of improving their connectivity while away from the office. Instead, it's about utilizing mobile technology to increase sales, improve productivity, and raise customer and employee satisfaction.

Key findings from the IDC study include:
  • Worldwide, the manufacturing sector represents the largest enterprise opportunity for mobile technologies. The industry's sizeable economic footprint and global operations create a naturally large market.
  • Consumer-centric industries such as retail, media, and personal and consumer services are leveraging mobility to engage and connect with their customers to improve their experience, bolster loyalty, and generate larger sales per customer.
  • There are still numerous concerns around mobility. Security and regulatory issues remain the biggest barrier for mobile technology adoption across industries such as government and financial services.
That being said, mobile and cloud computing have been catalysts for major market disruptions, causing business leaders to rethink technologies, services, and their go-to-market approach.

This has raised the bar on immediacy, pervasiveness, and contextual awareness and it's changing how businesses engage and operate -- thereby challenging the traditional IT methodologies. At the same time, mobile devices are being upgraded at a rapid pace. In turn, this has placed new demands on IT organizations. Are you ready to turn your CEOs expectation for a mobile-first strategy into a reality?

Monday, August 24, 2015

Digital Transformation: Crossing the Skills Chasm

Most informed CEOs seem to know intuitively that the most qualified person to lead their forward-looking business technology advancement isn’t likely to have the profile of a typical legacy CIO. In contrast, the role of a Digital Business Transformation innovator has very different requirements to the traditional IT utility infrastructure custodian of the past.

That said, some progressive CIOs are already making the transition to lead the digital competitiveness quest, and others will surely follow. Moreover, a few multinational companies currently have a CIO in a highly strategic, visible and collaborative position within the company. Their challenge is to guide the rest of the organization’s leadership to attain the required skills that will enable them to actively participate in the planning and execution of a new strategy – empowered by digital technologies.

The Harvard Business Review (HBR) market research team recently completed a global study of the path that several organizations have taken to develop and deliver the digital learning support resources that their key internal stakeholders both need and want. The results of this research portrays an environment that may be familiar to many CEOs that have, or are about to, embark upon a similar journey.

The HBR survey found that companies that rate highly in both digital leadership and management have better business results than their peers, with stronger revenue growth and greater profit margins.

Just under a fifth of survey respondents fell into this early-adopter or “Digital Leader” category, while over a third were deemed to be “Laggards” – i.e. an organization that’s weak in both digital leadership and management. Moreover, nearly half of the survey respondents had mixed scores and were rated as “Followers.”

What set the leaders apart from their peer group, in laggard or follower organizations? These proactive CIOs help their business colleagues to understand which digital knowledge and skills need to reside in their function, and which they can defer to the IT support team. The CIOs and their staff typically communicate in language that makes sense to a Line of Business (LoB) leader that’s focused on achieving outcomes.

Why Superior Digital Acumen Matters Most

According to the HBR study findings, digital acumen has become a critical component of all forward-thinking senior leadership teams. But there’s often a significant gap between what’s needed to succeed, and the current state inside many mainstream companies today.

About 23 percent of the survey respondents indicated that they’re confident their organizations have the necessary knowledge and skills to succeed in the digital aspects of their business transformation.

However, the recognized Digital Leaders in the respondent group were significantly more confident that their organizations have the both the required knowledge and skills they need -- in fact, 67 percent were extremely confident, compared with only 19 percent of the Followers and 5 percent of Laggards.

Clearly, there’s no substitute for the credibility and confidence that comes from having qualified digital-savvy executive talent at your disposal. Put simply, HBR discovered that the lack of leadership is the number-one issue holding most companies back, when it came to determining their digital business readiness; particularly among the Laggard companies.

Business Imperative for Digital Competency

Perhaps you’re wondering, is the skills development effort really worth the trouble? Does the payback justify the investment in time and energy? Let’s now explore the primary motivation for attaining digital supremacy, and you can decide what’s best for your company, within your industry.

The Digital Leaders in the survey were significantly more likely to have seen revenue growth of 10 percent, or more, over the past two years (58 percent of the Leaders vs. 43 percent of the Followers and 38 percent of the Laggards).

There’s no reward for taking a wait-and-see approach, even if the conservative late-adopter posture was taken with the best of intentions. The Laggards reported that they were twice as likely to have seen revenues decline (18 percent vs. 9 percent).

Fostering Collaboration and Shared Objectives

The CIOs at Digital Leaders are much more likely to be characterized as digital coaches or masters (45 percent of respondents, compared with 26 percent at Follower companies, and only 14 percent at Laggard companies).

By comparison, 45 percent of the Laggard companies had a CIO that’s been characterized as a “turf protector” that inhibits or resists collaboration -- or they merely had no designated CIO role at all.

A full 74 percent of the Digital Leaders have CIOs who support business-led IT projects. That is, when Line of Business leaders directly fund, contract, and/or develop technology capabilities themselves. This response compares with 64 percent of the Followers and only 40 percent of the Laggards.

Furthermore, the respondents who characterized their CIO as a digital coach or master had significantly higher scores -- over 80 percent of those respondents said their CIO supports business-led IT projects. This doesn’t mean, however, that those CIOs are ceding procurement control -- rather, they’re willingly sharing it in order to achieve the desired business outcome objectives of the whole leadership team.

Digital Skills Education and Mentoring

According to the HBR assessment, there’s little doubt that organizations need to do more to increase their business leader’s digital acumen. In the past, learning new skills might be a task that was assigned to the internal Training group or the Human Resources department. In this scenario, the education and mentoring responsibility should go to those who have mastered the digital transformation craft.

That said, finding a role model(s) for digital acumen knowledge transfer can be problematic. While 46 percent of respondents said they would like to learn more about digital trends from their CIO, close to two-fifths said their CIO doesn’t seek to educate and empower LoB leaders when it comes to digital skills.

Besides, over a third of the respondents said their IT team doesn’t provide useful knowledge about technology applications or understand which digital knowledge is most important to specific functions or lines of business.

In a follow-on editorial I’ll share more details about the illuminating findings from this study, and the associated recommendations for a plan of action. HBR Analytic Services interviewed a total of 436 business leaders from across the globe. The survey was sponsored by Red Hat, Inc., as part of The Enterprisers Project.

Wednesday, July 22, 2015

Why Your Organization Deserves a 'Real' Open Cloud

Worldwide, there's a growing appreciation for the many benefits of the Open Source way. Clearly, being truly Open is a frame of mind that can apply to just about anything in life -- including the development and nurture of a progressive company culture that's equipped for the challenges and opportunities of today's Global Networked Economy.

Jim Whitehurst, CEO of Red Hat, recently launched his new book entitled "The Open Organization" -- Igniting Passion and Performance. He says, "The conventional approach to business management was not designed to foster innovation, address the needs and expectations of the current workforce that demands more of jobs, or operate at the accelerated speed of business."

Granted, savvy senior executives within numerous multinational companies across the globe have already embraced the open way, and others will surely follow. Why would any forward-thinking CEO settle for the constraints of a legacy organization model, when the modern alternative is so much more rewarding?

Furthermore, when given the choice of an open business technology architecture that's designed for the 21st Century, is there any logical reason to accept the apparent limitations of an underlying IT infrastructure that was conceived in a bygone era of the post-industrial society?

How do you rationalize an ongoing investment in a legacy IT platform that has inherent high-cost software license handicaps and built-in undesirable technical limitations that severely impact both the ROI and operational performance?

My Point: don't let your prior sunk IT investments sink your future Open cloud options.

Cloud Computing Platform Trends

Cloud computing infrastructure assets are a key foundation for enabling strategic digital business transformation projects. It's the essential platform that positively impacts all emerging areas of IT service design, development and consumption. It also provides the basis for many of today's emerging big data, enterprise mobility and social commerce solutions.

International Data Corporation (IDC) predicts the number of new cloud-based solutions will triple in the next four to five years. They've examined the current status of cloud computing deployment in several vertical industries, and have unveiled the first of four special reports on this topic.

Their latest global market study identifies industry-specific drivers and barriers of using cloud computing technology and presents insights in terms of how to leverage cloud computing to create new commercial value.

According to the IDC assessment, industry-specific cloud-native applications will be a driving force, as perceptive CIOs look for solutions that can be easily configured to their unique digital business and vertical industry requirements.

Moreover, IDC believes that more organizations -- across industries -- will shift steadily toward enlightened cloud-first strategies to enable digital business transformation goals and objectives.

Key findings from the IDC report include:
  • IDC predicts that public cloud computing will reach almost $70 billion in 2015 worldwide, with the top 5 verticals (discrete manufacturing, banking, professional services, process manufacturing, and retail) accounting for approximately 45 percent of the total spend for the market.
  • The major opportunities for cloud within verticals come from the development of intelligent industry solutions, which are built on top of a new platform that includes cloud as well as big data and analytics, mobile, and social.
  • Those IT suppliers that showcase the long-term benefits and the true value of the cloud as a platform in a given vertical (e.g., efficiency gains in business processes and improvement in customer acquisition/customer experience) will be most successful.
  • The ease of purchasing cloud-based solutions has helped transfer buying power from IT to functional lines of business like marketing, finance, and operations.
  • Security and regulatory remains the biggest barrier for cloud adoption across industries like government and financial services, while loss of perceived control over IT assets and massive legacy systems are also stumbling blocks for using cloud offerings.
"The technological innovations and enabling capabilities unleashed by cloud computing have fostered new opportunities across the industries," says Eileen Smith, program manager at IDC.

Besides, IDC asserts that cloud services will remain the essential foundation of the what they call the "3rd Platform" of growth. IDC also predicts there will be more industry-specific cloud service platforms and marketplaces that are hosted by the recognized forward-looking leaders in each vertical industry.

Each of these pioneering organizations will be seeking to establish an Open Community of independent software application developers that will introduce contemporary thinking about new business model possibilities and thereby create valuable digital service innovations.

Smith concludes, "We have already seen such platforms and innovation communities in place in retail, financial services, media, and other industries. This will reshape not only how companies operate their IT but also how they compete in their own industry."

It's imperative that CIOs choose to develop strong customer-partner relationships with the authentic Open Cloud platform vendors, in order to fully seize the nascent market opportunities. The key take-away -- beware of the Faux-Open evangelists that insult your intelligence by suggesting that burying a cloud-native application within a proprietary legacy IT platform is good enough.

It's not acceptable, to the modern CIO or their key internal stakeholders. Informed Line of Business leaders know that they deserve a real open cloud solution that meets all their requirements. Anything less is an unnecessary compromise that will inhibit the achievement of their strategic business outcome objectives.

Thursday, July 2, 2015

Enterprise Mobility Applications Gain Traction in Europe

The mobile communications revolution that has transformed our lives as consumers is now similarly redefining the way forward-looking enterprises manage their operations and engage with employees, partners and customers.

The ongoing pursuit of digital business transformation projects are prompting many CIOs to rethink the technologies, services and techniques that underpin their enterprise mobility initiatives -- evolving traditional roles, responsibilities and organizational cultures in the process.

While the numerous commercial applications for smartphones within the workplace tend to be top-of-mind for savvy Line of Business leaders, now mainstream applications for media tablets have also broadened the productivity enhancing potential of mobile device app development.

Device Adoption in European Organizations

A large number of the tablets already deployed across British, French and German companies are now considered to be the only device that employees are equipped with to perform their daily work, according to the latest market study by International Data Corporation (IDC).

"Regardless, the majority of tablet users in enterprises currently have at least one other device to perform their online business activities," said Marta Fiorentini, senior analyst at IDC.

Additional devices are usually desktop or portable PCs, smartphones, workstations -- or, depending on the employee's role, specialized hand-held or point of sale (POS) devices.

However, a large share of the tablets in circulation are used by employees as their only work tool, either replacing traditional client devices or for functions previously not supported by any computing device.

According to the IDC study findings, tablets are the only business device for 40 percent of the polled respondents to their recent survey. This percentage, however, increases significantly for 2-in-1 or convertible devices -- as these hybrid products are often deployed to replace traditional PCs.

The study also shows that hybrids -- in either the detachable or convertible form factor -- are usually purchased with larger screen sizes than tablet slates. In fact, IDC says that while just over 10 percent of all slates have a screen size larger than eleven inches, the current percentage for hybrids is almost 30 percent -- this is expected to surpass 50 percent of these devices over the next couple of years.

Exploring Commercial Tablet Use-Cases

In spite of the cannibalization effect on traditional client device markets, standalone commercial tablets are also creating a huge opportunity for vendors. IDC calculated that in 2014 this incremental market accounted for almost 6 percent of tablets used as standalone in the UK, France and Germany.

IDC expects this percentage to increase quickly in these three countries and exceed 20 percent over the next 24 months. The use of tablets as standalone or companion devices has a strong correlation with the user's job role.

Workers who perform all or the majority of their activities while in-transit, in the field, or facing customers are more likely to rely solely on their tablets. Also, production workers equipped with a tablet often use them as their only work device in 64 percent of cases. By comparison, only 38 percent of executives and 44 percent of white-collar employees work only on their tablets.

IDC believes that while the majority of enterprises still use the default tools that come with their computing devices, most IT leaders confirm their wish to move to a more integrated single approach. The management of multiple mobile device operating systems and associated apps also remains a challenge for half of the IT decision makers interviewed during this survey.

Your Quest for a Comprehensive Solution

The right foundations are crucial to help you get beyond a me-too approach and reinvigorate or even reinvent your business. You'll find the real value of enterprise mobility will be revealed as your software app deployments mature from lightweight and tactical to more involved, strategic and scalable use-cases.

Some software vendors, such as Red Hat, provide next generation, cloud-based mobile enterprise application solutions that simplify the development, deployment and management of mobile apps for the most demanding commercial requirements.

Moreover, these product offerings are complemented by professional services that enable CIOs and their IT organizations to quickly and securely launch new enterprise mobility capabilities.

Thursday, June 11, 2015

How to Accelerate Government IT with a DevOps Boost

The rapid adoption of digital business transformation processes and the ongoing deployment of open hybrid cloud platforms are enabling the achievement of software development bold goals. But when management consultants and industry analysts talk about how IT innovation is changing many organizations, government leadership of this key trend typically isn't top of mind.

That said, a new market study by MeriTalk reveals that approximately two-thirds of American federal government IT leaders say DevOps adoption will help agencies shift into the cloud computing fast lane.

Agile methodologies, continuous integration and continuous delivery are improving IT collaboration and migration speed. But according to the findings, help is required -- with 66 percent of leaders saying that their agency needs to move IT services to the cloud faster to meet their mission and constituent needs.

DevOps is a software development and IT management method that brings software engineering, quality assurance, and IT operations together as an integrated team to collaboratively manage the full application lifecycle. The MeriTalk study examined the cultural and structural barriers to cloud adoption, and potential positive impact from DevOps practices within a government environment.

"We've heard a lot about cloud barriers, and we've all seen the lackluster GAO cloud spending data," said Steve O'Keeffe, founder of MeriTalk. "This study highlights a viable path forward. DevOps can help agencies change lanes and shift from inefficient silos to a dynamic, collaborative environment. It’s about people and how they work together, as well as the technology they use.”

Perceived Benefits of DevOps Methodologies

There's real upside potential for DevOps adoption in government -- 57 percent of survey respondents believe DevOps can help agencies succeed in the cloud. Sixty-three percent say DevOps will speed software application delivery and migration.

Furthermore, 68 percent see DevOps as a viable path to improve collaboration between IT development, security, and operations teams. Federal IT leaders also anticipate faster application testing (62 percent) with a proven DevOps approach.

The online survey of over 150 U.S. Federal IT managers also found that they believe increasing their cloud adoption pace will boost innovation (70 percent) -- refresh existing applications and deploy new ones faster (69 percent); and provide more available, reliable, and secure operations (62 percent).

Barriers to Cloud Computing Service Deployment

While security and budget concerns remain top of mind within the leadership of government agencies, organization structure and cultural issues continue to slow the progress toward cloud computing service adoption.

Forty-two percent of IT leaders cite infrastructure complexity as a top challenge to adopting cloud, followed by fear of change (40 percent), inflexible practices (40 percent), and lack of a clear strategy (35 percent).

Some agencies are gaining momentum, but many are experiencing difficulties with the practical execution – since the introduction of cloud, just 44 percent of U.S. Federal agencies have made the required process or policy changes, 30 percent cultural changes, and 28 percent organizational changes.

Moreover, the study uncovered that these same Federal agencies aren’t properly equipped – only 12 percent believe that their IT department has all of the tools they need to transition to the cloud.

Four out of five IT managers (78 percent) believe their IT department needs to improve collaboration to enable a more streamlined move to the cloud. But, only 10 percent of Federal IT managers said that their software developers and administrators are highly collaborative.

Outlook for Meaningful and Substantive Progress

Among the IT managers that understand DevOps benefits, just five percent say their agency has fully deployed a DevOps model. However, 60 percent do see DevOps in their future. Thirty-two percent of government IT managers that are already familiar with DevOps had also adopted the model or planned to do so within the next twelve months.

So, what are the perceived next steps? In order to successfully implement a DevOps model, government IT managers say agencies should train their current personnel (55 percent); establish a new vision for the future (41 percent); and create an incentive for a much-needed change in organization culture (40 percent).

Wednesday, May 27, 2015

Innovation Accelerators Lead Business Transformation

More CEOs are setting bold IT innovation goals for their company. Meanwhile, CIOs are tasked to quickly build the required business technology infrastructure. What’s the primary motivation? The growing expectation that all leading organizations will achieve their key strategic business objectives via superior IT-enabled advancements.

In fact, a recent study found that 55 percent of survey respondents said their environment will be changed ‘significantly’ -- 20 percent actually said it will be ‘completely transformed.’ Such major transformations can lead to significant competitive advantages, as long as the IT goals are clearly articulated, according to the findings from a Harvard Business Review (HBR) market study and associated report that was sponsored by Red Hat, Inc.

The apparent benefits extend beyond the traditional commercial enterprise. For example, a $650 million innovation project at a large State Government agency is returning $4.7 billion in additional tax revenue – that’s a 7:1 return on investment – by deploying online self-service offerings and becoming more sophisticated in their use of taxpayer data.

The HBR survey respondents also said that IT-enabled innovation would change the way employees do their work (48 percent significantly changed; 15 percent completely transformed), the company’s products/services (46 percent changed; 11 percent transformed), and business models (42 percent changed; 13 percent transformed).

Why Some Organizations Surge Ahead of Peers

For the few “Innovation Accelerators” that lead their industry, the numbers are significantly higher. A case in point; 70 percent said their approach to customer engagement and insight would be significantly changed, and a full third say it would be completely transformed.

The HBR analyst and report author claims that this revelation is very important, and directly translates to the specific projects that these survey respondents expect to engage in over the next three years.

Innovation Accelerators Share Six Characteristics

  • Their commitment to technology-driven business innovation starts at the top, with the CEO.
  • Their approach to innovation is structured and managed -- but they value speed over perfection and cut through bureaucracy.
  • They value diversity of thought and experience, collaborating fluidly across functions, hierarchy, and traditional corporate boundaries.
  • Their CIOs are significantly more likely to spend their time on activities that are strategic to the business.
  • They have strong IT departments that actively and productively contribute to the corporate innovation agenda.
  • They are more likely to invest in and reward innovation.

According to the assessment performed by the HBR report authors, while these six traits can help build a road map for organizations seeking to harness IT for digital business transformation, there are a number of barriers to overcome.

The most common barriers to success include functional silos, rigid ideas about roles and responsibilities, calcified processes, outdated compensation structures, and technology infrastructures that were not designed to support the kinds of open and agile customer-engaging systems required today.

Detailed Profile of an Innovation Accelerator

Already, rapid developments in IT best practices are having a dramatic impact on all aspects of commerce. The HBR research suggests that organizations that make a strong commitment to IT-driven business innovation will accelerate their digital transformation in several key areas – such as, how they engage with and understand their customers, new business models, the development of new products or services, and how employees perform their work.

The HBR analysis has uncovered that these Innovation Accelerators are significantly ahead of their competitor’s IT innovation efforts – including the extent to which they have successfully commercialized internal IT initiatives.

The research also reveals that the Accelerator success begins with a commitment from the CEO that is shared by the company’s cross-functional leadership team. It includes taking a structured approach to ensure that innovation occurs throughout the organization without bogging it down.

Innovation Accelerators are inclusive, valuing the perspectives, knowledge, and ideas of diverse people and groups, both inside and outside the company. They have multifaceted CIOs who focus on business strategy and innovation -- plus, they identify opportunities for competitive differentiation.

They have IT departments that support new business ideas and opportunities with access to the best-fit technology, knowledge of the business, and the right technical skills. And, they proactively invest in and reward meaningful and substantive innovation.

In summary, HBR suggests that CIOs now have a strategic mandate to innovate. The ones who accelerate won’t wait for permission but will lead their organizations into what will likely be a very different, business technology-driven future.

They will be a key part of the CEO’s strategy execution team; designing the open, agile, and customer-engaged organization that will create new value and a distinctive competitive advantage that’s built upon a rock-solid digital business foundation.

Wednesday, April 29, 2015

Digital Transformation Drives Cloud Computing Demand

Digital  Business Transformation projects gained momentum in 2014, as more companies moved their legacy IT workloads to cloud computing platforms and launched a variety of new cloud-native applications. This pervasive trend will continue and accelerate for the duration of 2015.

Total cloud IT infrastructure investment (server, disk storage, and ethernet switch) is forecast to grow by 21 percent year-over-year to reach $32 billion in 2015 -- accounting for about 33 percent of all IT infrastructure spending this year, which will be up from about 28 percent in 2014.

Private cloud IT infrastructure spending will grow by 16 percent year-over-year to $12 billion, while public cloud IT infrastructure spending will grow by 25 percent in 2015 to $21 billion, according to the latest worldwide market study by International Data Corporation (IDC).

For the full year 2014, cloud IT infrastructure spending totaled $26.4 billion, up 18.7 percent year over year from $22.3 billion -- private cloud spending was just under $10.0 billion, up 20.7 percent year-over-year, while public cloud spending was $16.5 billion, up 17.5 percent year-over-year.

Regional and Worldwide Market Forecast

In 2015, Western Europe is expected to have the highest growth in cloud IT infrastructure spending at 32 percent, followed by Latin America (23 percent), Japan (22 percent), and the U.S. market (21 percent).

For the five-year forecast period, IDC now expects that cloud IT infrastructure spending will grow at a compound annual growth rate (CAGR) of 14 percent -- both public cloud and private cloud are expected to grow at the same CAGR.

By 2019, IDC also expects worldwide cloud IT infrastructure spending to be $52 billion, or 45 percent of total IT infrastructure spend -- public cloud will represent about $32 billion of that amount, and private cloud will account for the remaining $20 billion.

Given the current market development trajectory, this trend is unstoppable. It would be unwise for a legacy CIO to continue to deny the apparent benefits of cloud computing and thereby resist the Digital Business change that their more forward-thinking peers have already embraced.

Essential Role of Shadow IT and Open Source

"The pace of adoption of cloud-based platforms will not abate for quite some time, resulting in cloud IT infrastructure expansion continuing to outpace the growth of the overall IT infrastructure market for the foreseeable future," said Kuba Stolarski, research manager at IDC.

In many organizations, a key driver of the rapid adoption of cloud applications and DevOps practices continues to be the unstoppable "Shadow IT" phenomena -- where savvy Line of Business leadership refuses to be held back by the inherent limitations of their company's internal IT organization.

As the global market evolves into deploying more cloud-native solutions -- enabled by open source software, such as OpenStack -- IDC belives that organizations of all types and sizes will discover that traditional approaches to IT management will increasingly fall short of the simplicity, flexibility, and extensibility requirements that form the core of cloud computing solutions.

Monday, March 9, 2015

How to Reach Digital Business Goals with IT-as-a-Service

Senior executive expectations have been raised for traditional IT organizations that broker cloud computing services for their internal business stakeholders. Besides, there's a belief that the lack of dimension maturity can slow digital service innovation outcomes.

As a result, International Data Corporation (IDC) now predicts that by 2016, 65 percent of global competitive strategies will require real-time IT-as-a-Service (ITaaS) solutions.

The ability of CIOs and their  IT organizations to grasp how business wants cloud computing services that serve actual business needs -- not traditional IT components -- is significantly altering the ways in which service management is achieving success.

Quest for Competitive Strategic Advantage

New business technologies are fundamentally altering how IT organizations function, how business is conducted, and how enterprises compete in the marketplace. IDC believes that this environment requires IT to deliver services that are focused on realizing the highest-level strategic objectives.

The ability of IT to immediately achieve a maturing business focus within its strategic planning and execution process is a key imperative. In this latest study, IDC has explored a planning framework that enables CIOs to attain digital business transformation goals.

"Creating a mature, strategic business alignment between IT and its customers requires a clearly defined end-state vision, an empowering IT culture capable of initiating rapid change, and an increasing focus on the financial costs and benefits -- as measured from a consumption basis, versus the traditional cost-budget basis," said Bill Keyworth, vice president of research at IDC.

IDC also believes that a method of assessing service innovation maturity is needed as a planning tool to help prioritize and evaluate the progress of an IT organization rising to meet the progressive Line of Business leader demands.

Additional findings from the IDC study include:

Without question, maturing the IT business dimension requires the active participation of top IT management. It's equally important to ensure all stakeholders and beneficiaries of IT within the enterprise are kept abreast of the business dimension maturity process.

Moreover, IT service innovation demands a multifaceted approach that seeks to ensure that all five maturity dimensions are simultaneously addressed, continually focusing on the least mature process -- or, the bottleneck that's holding up all other maturity dimensions.

Rather than tackle IT business-facing objectives through massive project implementations, IDC recommends companies take a "theory of constraints" approach, frequently used within ITaaS to quickly identify, analyze, and resolve any impediment to IT-business alignment.

Furthermore, according to the IDC assessment, IT organizations that achieve long-term success will be characterized by a service-centric culture that tracks effectiveness through an outside-in perspective, rigorous IT competitive analysis, and business-oriented metrics.