Do you want to hear the good news or the bad news first about digital transformation?
I’ll start with the bad news. Complexity, speed and the expectations placed on technology executives in the digital economy continue to ramp up. In fact, IDC’s research shows that more than six in 10 chief executive officers are under considerable pressure to deliver a successful digital transformation strategy.
The good news is that IDC has developed a “Blueprint for Multiplied Innovation” to help technology executives navigate the increasingly complex environment. This blueprint was launched as part of a live IDC video webcast that has since been viewed by thousands of technology executives. Within this blueprint, IDC has put together 10 predictions that we think will have the biggest impact on the enterprise technology market in 2019.
The idea is to help executives come together to orchestrate a strategy and a road map, leveraging the range of technologies that will increasingly underpin the business models of the future. It is important to highlight that this is not an IT, digital or line-of-business “owned” strategy. Rather, it cuts across all stakeholders.
The IDC blueprint for multiple innovation covers five main pillars (with the associated predictions), as outlined below:
- Financials: Financial road maps should look at the new ROI — the return on innovation.
- Strategy: Creating a use case journey by time horizon and on an industry-specific basis will align and create a reference point for the executive team.
- Business model: Organisations will rethink the business model towards one that is not only technology-enabled, but also ecosystem-enabled. By 2021, IDC believes that 82 per cent of the revenues coming from digital transformation business models will be ecosystem-enabled.
To unleash the potential of these business models of the future, organisations must balance the need for security and openness. Hence, IDC predicts that digital risk will become a standard reporting mechanism as part of financial statements by 2025.The transition towards digital ecosystems and value networks — as opposed to linear value chains — opens up new opportunities for distributed ledger technologies such as blockchain that enable the connection between several entities in a network in a distributed fashion. This is why IDC predicts that by 2020, 60 per cent of enterprise blockchain investments will be driven by the need to enable ecosystem business models that rely on the secure exchange of data.The primary focal point of these digital ecosystems of the future will be the customer, and the customer experience will increasingly become the enterprise competitive differentiator, with intelligence enabling the delivery of context in every single customer touch point. In line with this, IDC predicts that artificial intelligence (AI) will become the new user interface (UI) by 2025.
- Platform: As organisations look to enable these ecosystem-centric business models, they need an integrated enterprise-wide technology architecture to drive the seamless flow of data across every single system, business application and digital app (internally and externally). To support this, the new IT foundation will be increasingly cloud-first, with the use of hyperscale cloud platforms ramping up at an exponential rate. To mitigate risk associated with vendor lock-in in this regard, IDC predicts that by 2020, 60 per cent of organisations will use two or more cloud platforms, leading companies to seek multi-cloud management services and reduce complexity.
- Future of work: Finally, to actually deliver on this blueprint, organisations need an inspired, engaged and empowered workforce. This requires a rethinking of the hire-to-retain process, but also a focus on organisational agility where the right skills profiles are linked to the right teams — something that is going to increasingly become a major challenge, given the emerging skills gap. In fact, IDC believes that by 2020, the lack of IT skills will affect 90 per cent of all European organisations, resulting in $91 billion of lost revenue annually.
The idea behind this blueprint is that it is not only forward-looking, but also actionable. It should be an exciting reference point for all stakeholders to drive alignment and execution for the year. And, hopefully, it will also drive some good news amongst the increased complexity, speed and pressure that we are all facing on a day-to-day basis.
This article is part of the IDC series “Your pathway to digital success,” written to inspire business leaders to overcome common challenges along their organisations’ journeys.