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Wednesday, October 19, 2016

Ecosystems: the Next Evolution of Digital Transformation

A new type of commercial infrastructure needs to be built that reshapes business, according to the latest market study by Gartner. Moreover, they believe that enterprise CIOs are the builders of this infrastructure, which Gartner calls the "civilization infrastructure" for the next decade.

Clearly, many CIOs now feel the need to redefine their role, as IT strategy shifts to other executives. Meanwhile, Gartner has forecast that worldwide IT spending will total $3.4 trillion by the end of 2016 -- that's a 0.3 percent decline from 2015.

In 2017, however, global IT spending is projected to grow 2.9 percent and reach $3.5 trillion. Growth will be driven by the software and IT services segments. Worldwide spending on software is projected to grow 7.2 percent, and IT services 4.8 percent.

Garner analysts believe that software and IT services will be key to the development of the civilization infrastructure. That said, in many organizations today, Line of Business (LoB) leaders have already assumed control of their business technology destiny.

An Opportunity for Legacy CIOs to Evolve

"Civilization infrastructure will forever change the way people engage socially, digitally, and physically through connected sensors and digital intelligence," said Peter Sondergaard, senior vice president at Gartner.

"CIOs will participate in the building of a new digital platform with intelligence at the center," Mr. Sondergaard said. "That platform will enable ecosystems, connecting businesses and collapsing industries. It will change society itself, and the way people live."

This civilization infrastructure will be a new digital platform that extends beyond traditional IT infrastructure using new technologies not familiar to the typical IT department. According to the Gartner assessment, the new digital platform consists of five domains.

"Each of these domains are interconnected and interdependent. All have a role, and all are required," Mr. Sondergaard explained. "Your new digital platform will allow you to participate in the evolving world of business, government, and consumer ecosystems. Because ecosystems are the next evolution for digital. It’s how you compete at scale."

The five elements of the new digital platform:

Traditional core IT systems. This is how CIOs run and scale operations. It’s building on what’s already been built. It’s taking high performing traditional IT systems and modernizing them to be part of the digital platform.

Customer experience. This is how CIOs connect and engage in new ways. The digital customer experience may be the only one that the customers have. This is how the business engages in the digital world.

The Internet of Things (IoT). This is how the organization senses and acts in the physical world. Adding devices to the IoT domain is the easy part. Processes, workflows, and data integration are much harder. In fact, two-third of organizations have had to rework their existing IT systems to accommodate IoT.

Intelligence. This is how the systems analyze, learn and decide independently. CIOs start with traditional data management, data science and data intelligence. Algorithms determine the action. The new type of intelligence, driven by machine learning is artificial intelligence.

Ecosystem Foundation. This is how the enterprise interacts as an institution in the digital world. Ecosystems go beyond the capability to decide, CIOs need to build the capability to interact with customers, partners, adjacent industries, even your competitors.