The noted science fiction author William Gibson could have been talking about the state of digital enterprises when he said, “The future is here — it’s just not evenly distributed.”
While some enterprises have achieved the nirvana of hyperspeed, hyperscale, and hyperconnectivity, many are struggling with siloed digital transformation initiatives, leaving them buffeted by competition and market forces.
There hasn’t yet been a “year of reckoning” for CIOs in the digital era, but time for action is growing short as competitors are accelerating their digital efforts. Still, there are concrete actions that CIOs can and must take to create digital-native “future enterprises.”
The following predictions, based on the IDC FutureScape: Worldwide CIO Agenda 2020 Predictions, present information about technologies, markets, and ecosystems to help CIOs better understand future trends, their impact on the enterprise, and what steps to take in the year ahead that will set them up for success.
1. By 2024, 80% of digitally advanced organizations will replace the walled garden, IT-as-an-enabler model with a self-service model. Providing libraries of cloud solutions, functions-as-a-service (FaaS), and low-code/no-code tools that are easily accessible and usable by non-IT users or by citizen developers allow the business to rapidly respond to changing market needs without the need to involve IT, but with the assurance that these solutions will be secure and compliant.
To accomplish the transformation, CIOs need a clear vision of a desired future state that is co-developed with business leaders and line of business (LOB) executives and shared broadly with the enterprise and its partners.
- Invest in training IT developers to design and develop these digital tools, and partner with tools vendors to leverage their expertise.
- Build digital platforms with data and services APIs/microservices to create open, self-service environments.
- Create labs and centers of excellence for LOB developers to work with IT staff for accelerated knowledge transfer.
2. By 2023, 65% of CIOs will be entrepreneurial leaders who evolve their organizations into centers of excellence that engineer enterprisewide collaboration and innovation. As LOB organizations are infused with technology and tech-savvy leaders and workers, CIOs’ most effective role will be building IT organizations that are centers for digital knowledge, technologies, and best practices that can proactively architect and integrate digital efforts across the enterprise. IT leaders and workers will need to become more proactive in driving change by anticipating business needs, IT services and platform staged evolution, and building required skills, capabilities, and influence in real time.
- Focus with LOBs on building a culture of collaborative learning, teaching, and coaching.
- Create a map the skills needed at each stage, taking into account the pace of planned evolution.
- Build partner networks to fill gaps in skills and competencies
3. Driven both by escalating cyberthreats and needed new functionality, 65% of enterprises will aggressively modernize legacy systems with extensive new technology platform investments through 2023. Patching and maintenance of legacy systems can’t keep up with escalating cyberthreats, but modernization is expensive and can be a tough sell to business leaders if the emphasis is on countering cyberthreats. Supplying desirable new functionality and capabilities is a more viable source of leverage.
- Prepare a business case, reflecting critical business needs like superior customer experience, to support expenditures on large-scale replacement of legacy systems.
- Create a plan for rationalization and modernization working with LOB executives to build support.
- Use “security first” design and development approaches to avoid creating new security holes and weaknesses.
4. By 2023, as a pillar of their multi-cloud approach, 70% of IT organizations will implement a strategic container/abstraction/API playbook to enhance application portability and hosting flexibility. Successful organizations are adopting container/abstraction strategies and doubling down on their API and microservices efforts to achieve modernization, automation of processes, computing environment independence, application isolation, improved quality, and increased scalability. CIOs that don’t adopt container/abstraction approaches will find their lack of agility, mobility, and scalability poses significant competitive disadvantages.
- Make microservices, coupled with containers, the architectural pattern of choice for all new applications.
- Implement and expand DevOps to create a perpetual evolution model.
- Explore serverless and functions-as-a-service models for on-demand computing needs.
5. By 2022, 70% of IT organizations will have transitioned from builders and operators to designers and integrators of digital solutions that come to define every product, service, or process. The challenge for CIOs is that LOB organizations, aided and abetted by vendors, will take on more technology creation and deployment roles, whether or not IT supports that shift. If CIOs refuse to make the shift in IT roles or abdicate responsibility for LOB technology solutions, the consequences for their businesses are dire. It is far better for CIOs to plan and manage the transition working closely with LOB executives.
- Develop digital platform and API strategies to enable secure and rapid integration of diverse apps and systems.
- Invest in deep expertise in design and user experience
- Create centers of excellence for vetting and selecting digital apps and tools.
6. Through 2023, 80% of IT organizations will accelerate software development to enable them to deploy at least weekly code updates and revisions. Many IT organizations have moved from waterfall to agile software development practices (at least in theory) but still haven’t mastered the ability to reliably and quickly deliver code in small increments that yield continuous building of business value. Even if needed only for select applications, IT organizations must create the capability to deploy at least weekly code updates and revisions. CIOs will have to double down on achieving true agile and DevOps capabilities.
- Think about product and business outcome, not projects.
- Modularize for adaptability.
- Accelerate DevOps and continuous integration/continuous deployment, and empower the workforce to develop new approaches to creating and delivering software.
7. By 2022, as innovation becomes synonymous with disruption, 40% of CIOs will co-lead innovation in their organizations. CIOs are a logical choice to spearhead digital transformation. They are uniquely positioned to become innovation leaders, possessing deep knowledge of digital technologies, the ability to envision technology-driven business change and, most importantly, an understanding of how their businesses work. The CIOs that succeed in innovation leader roles will be able to formulate compelling digital visions and enlist the rest of the enterprise to help realize the vision. While technology savviness is a key prerequisite, their success will be won or lost based on their ability to communicate, build relationships, and deliver on their commitments.
- Build a foundation of reliable IT services delivery and proactive problem solving.
- Evangelize a digital vision co-developed with LOB executives.
- Carve out some limited, but still substantive, digital initiatives to demonstrate value.
8. Through 2022, deployment of artificial intelligence (AI) to augment, streamline, and accelerate IT operations will be a principal IT transformation initiative for 60% of enterprise IT organizations. IDC’s August 2019 CIO Sentiment Survey shows that more than 54% of IT organizations believe that AI will bring significant value in IT operations automation and IT optimization. The challenge for CIOs is not finding resources to automate IT, it’s zeroing in on the opportunities that offer the most impact. CIOs should start by deciding on their strategic imperatives, whether cost reduction, talent redeployment, increasing IT throughput, or other objectives.
- Use partnerships with universities, consortiums, start-ups, and others to build the AI talent bench.
- Automate operations and intelligence initiatives to bridge siloes and streamline processes.
- Make service quality a key goal with metrics in automating operations.
9. Through 2024, 75% of CIOs will reshape all IT resources, including budgets, assets, and talent, to support real-time resource allocation and enterprise agility, dramatically reducing fixed costs. CIOs face many obstacles in the pursuit of speed and agility, but perhaps the most substantial is the lack of flexibility and fluidity in funding and resources. Fluid resource allocation can provide a substantial competitive advantage to CIOs. It is a necessary foundation for achieving true organizational agility and should be high on the priority list of CIOs pursuing IT transformation.
- Work with human resources and finance to create new hiring, performance management, and budgeting systems.
- Work with LOB executives to create mechanisms for keeping IT/LOB resources and budgets in sync.
- Use agile-like cycles to continuously target and rebalance IT resource allocation
10. By 2023, 60% of CIOs will implement formal employee experience programs. After mounting a series of unsuccessful, disconnected, and scattershot employee engagement initiatives, high-performing CIOs are assembling strategic, outcome- and goal-driven employee experience programs that fuse continuous learning, collaboration, and innovation within digital workspaces. These immersive employee experiences and workspaces will boost employee productivity and attract the best talent. In most cases, those programs will be critical components of enterprise initiatives.
- Build a culture of human-centered design for IT products and services, focusing on understanding the motivations, wants, and needs of target segments of workers.
- Work with human resources and LOB executives to conceive and design workspaces and employee experiences.
- Use agile and iterative approaches coupled with practices such as ethnographic research and design thinking to design and develop learning experiences and workspaces.
As the pace of digital transformations accelerates, digital success becomes more difficult. To increase their chances of success, CIOs need to have a plan and strategy for breaking down the constituent components of digital transformation into manageable chunks. They will also need to avoid taking on digital business initiatives without foundation elements in place. Indeed, several of our 2020 predictions and recommendations address building these foundations, and they are critical for building the new, digital-native enterprise.
Serge Findling is Vice President of Research with IDC’s IT Executive Programs (IEP) and the CIO Agenda program. Serge focuses on digital transformation leadership for business and technology executives. He also manages IDC’s Information and Data Transformation practice, helping organizations successfully weather and capitalize on the changes brought about by today’s disruptive transformation in information management.