#DBS2016 Managing the Emerging Digital IT Model

© 2016 Information Services Group, Inc. All Rights Reserved.


Analyst Insights: Managing the Emerging Digital IT ModelDigital Business Summit

Berlin, October 27, 2016Luis Praxmarer, ISG Global Research Director


Agenda

1. The New Computing Paradigm

2. Emerging Digital Platforms

3. People and Transformation

4. Consumerization

5. IT Skills and Focus

6. IT Maturity and Organization

7. Challenges and what comes next?


Computing paradigm of thenext decade ……

Microprocessor (Big Bang) Mainframe Minicomputer

Information Revolution Wave 1

PC Client Server Internet Smartphone Notebook Tablets MP3

Information Revolution Wave 2 Cloud Mobility Big Data Artificial Intelligence Consumerization Internet of Things Digital Business Transformation

Information Revolution Wave 3

Globalization enables every country on the globe to adapt those technologies.Success will depend on each countries readiness and willingness to transform.

The new “Digitalization Wave“ has fundamental impacts on the Enterprise IT Organization (ITO), their focus, expectations, and organization.

1970 1980 1990 2000 2010 2020 2030


Who are the winners?And does the winner take it all?

0

20

40

60

80

100

120

140

160

180

200

BMW Daimler VW Tesla Uber Siemens UBS HPE Google Facebook

Billion Euro

Do the start-ups have a clear advantage over existing companies with legacies?

Old & New World – Market Cap

66 BillionUS$ gain

onone day

17.7.2015

532265


Positioning I4.0 vs. IoTvs. Digital Business

Smart Logistics, Transportation, Health, Energy, Retail

Smart Products

Product-centric Services(e.g. predictive maintenance)

Smart Products

Smart Services

Service Layer

Product Layer

Product (production) focused industries Service focused industries

Industrie 4.0

IoT

IoS

Digital Business


Technology Trends — Heatmap

Industries 4.0 Internet of Services

New BusinessModell

New Autonomic Services

Digital Company/ Real Time Business

Total Customer Experience

Business Analytics & Big Data

1:1 Relationship & Self Service

Governance, Risk, Compliance

AgileApplications

Business Process Redesign

Cloud Platform(SaaS + BPaaS)

Mobile Enabled Enterprise

Seamless Network & Cloud (IaaS)

Intelligent Robots & Devices

Internet ofThings

AdaptiveSecurity

Business Model TransformationConsumer &Market Transformation

Agile Solutions

Agile Platform


Enterprise IT ecosystem –Responsible verses Enabling

Industries 4.0 Internet of Services

New BusinessModell

New Autonomic Services

Digital Company/ Real Time Business

Total Customer Experience

Business Analytics & Big Data

1:1 Relationship & Self Service

Governance, Risk, Compliance

AgileApplications

Business Process Redesign

Cloud Platform(SaaS + BPaaS)

Mobile Enabled Enterprise

Seamless Network & Cloud (IaaS)

Intelligent Robots & Devices

Internet ofThings

AdaptiveSecurity

IT Enabled

IT Responsible

IT Responsible/Enabled


Number one challenge for Digitaltransformation – PEOPLE !!!Even though Consumerization drives the experienced “Digital Native”, we still have to deal with Digital Immigrants and Digital Aliens. Technology Human Usability & Adaptability Gap Insecure Fear Uncertainty Variety of people Work-Life-Balance And still the old wisdom holds true, successful “IT/Bus“ projects have three

parts:• Technology• Process• Transformation & Change Management


The User: D21 – Digital – Index 2015

Very little change over the years, 1-2% per archetype. Connectivity.

27%Type 1Alien Doubter

32%Type 2Domestic Opportunist

12 %Type 5Enthusiastic Onliner

6%Type 3Careful Pragmatist

6%Type 6 Smart Mobilist

18%Type 4Deliberate Professional

64% N

ot reached36%

reached

Alien Doubter

Smart Mobilist

The D21 Study differentiates between six archetypes of users. Most companies have them all…


The User: D21 – Digital – Index 2015

The D21 Study differentiates between six archetypes of users. Most companies have them all…

Zugang Nutzungsvielfalt Kompetenz Offenheit Gesamt-Index

Trend +1,8 -3,4 +1,1 -1,7 +0,3

2013 54,2 40,3 50,3 53,9 51,2

2014 56,9 41,5 47,8 54,9 51,3

2015 58,7 38,1 48,9 53,2 51,6

Trend Indexwert 2013/2014/2015Alien Doubter

Smart MobilistVery little change over the years, 1-2% per archetype. Connectivity.


Survey Enterprise situation – not much “Digital” activity!

Question: Are you already engaged with Digitalization?

38%

33%

37%

47%

27%

30%

26%

24%

16%

18%

16%

14%

9%

10%

10%

8%

4%

2%

5%

6%

4%

3%

5%

1%

2%

4%

1%

0%

Heard about, but no activities Thinking about it – information phase Working currently on a strategyFirst projects planned in 2-3 years First projects planed within the next 12 month First projects successfully implementedDigitalization strategy successfully implemented

0% 20% 40% 60% 80% 100%

250-499employees

500-999employees

1000& more employees

Total


Survey Enterprise Situation – Maturity Model

Good processes are the foundation for a successful Digital Business Transformation.

Company has not started any Digital Transformation. There is no awareness in the organization.

Initial

Company is at the starting point to the digital journey. Awareness exists and orientation and information phase has started.

Managed

Company works on the Digitalization strategy, first projects are completed, structure for change is being build.

Standardized

Company leadership has articulated a Digital strategy and lives it. Transformation has been accomplished.

Predictable

Company has successfully implemented the Digitalization strategy, drives innovation, and develops new business models.

Optimized

Question: What is the maturity status of Digital Transformation?

Large MajorityN=400


Expectation!!! User experience Easy, fast Innovation Cost What is commodity even for Enterprise

IT? Where is my differentiation as IT? How does it look in five years from now? Do I need a two-speed IT?

Impact of Consumerization

Consumer IT

Cost Safety/Security

EnterpriseIT

New DiscoveryChannels

App Stores

Social Media

Ease of Acquisition & UseVariety &

Choice Innovation


@

From ICT Infrastructure to Business Value through focus on business processes and innovation. Company leadership expects innovation!

Challenges for the ITO

CIO Chief Innovation Officer Chief Operating Officer Chief Digital Officer (Chief) Technology Officer (Chief) Infrastructure OfficerReality vs. lip service: How is the ration of people? Tactical verses strategic work? What is done to improve? What can be done? How many of your IT people can you take

with you on this journey?

IT infrastructure

Human Capital Processes Information

Revenue up – cost down Innovation Differentiation Business Value!

Business View

IT View

REALITY60-80% of the IT employees


HR development Architecture Business Development & Demand

Business Relation-ship Management

Financial Service Management

Project Transition Services

Vendor & Contract Management

Continual Improvement Service Management Security Management

Service Design, Orchestration and Management Layer

Strategic

Tactical

IT Organization 4.0Building the right IT organization for the transformation. Intelligent Sourcing, pro-active human resource management and the right skills are crucial.

Business Service Catalog

Value Delivery CostManaged Hosting

Services Internal

Managed Desktop Services horizontal

Service Desk horizontal

Network Services internal/external

Managed SAP Service vertical

E-Mail as a Service

Cloud

App Service Internal

Service Delivery Layer (external/internal)Special Apps

(Engineering/Manufacturing, etc.

IT Service Catalog Operational

Business Unit 1 Business Unit 2 Business Unit 3 Business Unit 4 Business Unit n

BusinessIT

…………

SLA Management

Innovation Management


Many additional challenges for the ITO

Legacy Devices & SystemsReplacement Lifecycles

RF Communications (WiFi, Bluetooth,

Zigbee, etc.)

@

GG

G

G

e.g. Security for IoT and Cloud.

Sensor Data

Control Data

Sensor Data

Control Data

BackupPatch Management

Configuration Change Management

Administrative Controls

DetectiveControlsHDS IDS DLP

Vulnerability scanningAudit log Pen tests

AV and AMW

Data Retention Business Continuity Disaster Recovery

ProceduralControls

Separation of dutiesVendor Management

Incident Response

Digital certificatesCryptography NAC

Firewalls AV & AMWIPS TLS

PreventiveControlsFirewalls SSL

XSS DRMWhite lists

Threats Risks

Intelligence &Analytics

ComplianceGovernance

Cloud Workloads

Security Controls

Cloud Storage

Predictive Analytics

HR; Finance

API

API API API API API API

Legal

SkillsTrust

Regulatory

Digital Business & Cloud Workloads

Edge Networks and IoT DevicesConsumers and Industries

What comes after what comes next?

The last chance for the central IT?


What comes after what comes next?

The last chance for the central IT?

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driving change in healthcare

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