Mastering Next Generation IT: Executive Guide to Enterprise Technology Transformation & the Business of Cloud Services

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Introduction

Organizations today increasingly feel the pressure of managing faster, more iterative IT development lifecycles across a multitude of devices, platforms and networks. In turn, business and IT leaders are searching for ways to enable more agile, integrated infrastructures that will improve efficiency, reduce costs and provide enterprise-wide visibility.

Cloud computing has become an essential part of running a business and is helping business leaders with every aspect of business, from HR to sales and marketing, finance and accounting, project management and much more.

In a recent article, Oracle CEO Mark Hurd points to three major reasons why companies are increasingly turning to cloud solutions (Hurd, 2014). Hurd notes that features, security and reliability have met or exceeded customer expectations; cloud computing delivers value and lowers the cost of building and maintaining an in-house infrastructure and companies know that they must be more agile and move quickly in order to accelerate operations and compete effectively. Adding benefits such as access to infinite storage, scalability, pay-per-use models, business continuity and process optimization makes clear that cloud computing is a game changer worth considering.

As a business leader, you understand that it’s important to choose wisely and spend your IT budget in the right places. But with such an overwhelming array of choices, it’s difficult to understand which options are right for your company. How can you decide? This book will help business leaders looking to simplify IT, drive innovation, cut low-value IT costs and accelerate operations.

Section 1

Trends in Virtual Computing Technology

Digital Transformation

In some ways, every business is a digital business. Organizations, both large and small, are transforming into a digital model and re-imagining themselves in an interconnected and technology-driven world. Businesses are counting on technology to fuel their growth.

Large enterprises, typically slow to embrace new technologies, are in a race to become digital as corporations adopt social, mobile, analytics and cloud computing. It’s not just enough to utilize these technologies; IT must be woven into the next generation of business strategy across every industry. Pioneering enterprises see new technology as a catalyst and a driving force to create new markets, products and areas of growth and revenues.

According to consulting firm Accenture, the change is revolutionary. Industrial companies are becoming customer service companies. Consumer products companies are becoming Internet companies. Energy companies are becoming information companies. And media and entertainment companies are becoming logistics companies.

Internet startups are not the only innovators and disrupters. Armed with deep resources, process discipline and enormous scale, traditional corporations will emerge as digital giants.

In this section, we will detail key IT trends that point toward an exciting time of new opportunities, along with pointers for IT executives looking to stay ahead of the curve.

Trend #1: A Digital-Physical Blur

With the Internet of Things, physical objects, machines and devices are equipped with more digital intelligence that is connected and increases our insight and control over the tangible world. Consumers are changing the way they experience everything around them, from monitoring electricity usage with smart thermostats to tracking workouts on their smartphones. Business are also benefiting from real-time connection and information from the physical world that allows machines and employees to act more intelligently and react more quickly.

Why is this happening now? First of all, the number of connected devices has exploded, and is expected to reach 212 billion in the year 2020 (Accenture, 2014). This means that every single person on earth will possess an average of 30 connected devices. Increased bandwidth is another factor, with IP traffic and broadband speed increasing at a rapid pace. Advances in robotics also contribute to the rapid growth in interconnection as they empower human-robot collaboration in industries beyond manufacturing. Another factor in the increasing blur between digital and physical is the rise of real-time analytics. Data sources and streams from machines and applications are growing at an unprecedented pace, enabling decision making and supporting automated responses like never before.

As the digital-physical divide continues to blur, vast opportunities are opening up for enterprises. Organizations with physical assets are surpassing online competitors and gaining market share by creating unique and meaningful real world experiences for consumers. In addition, companies are able to gather real-time insight to make smart decisions and act or respond in real time. Intelligent capabilities are also reshaping business operations. In order to truly benefit from these opportunities, technology and business leaders must reconsider how they run their businesses and how they engage and interact with customers.

Integrating digital technologies and having access to real-time information has also led to efficiency improvements and transformation for many non-digital industries. Manufacturing companies are utilizing RFID tags in the supply chain to track inventory and assets. Oil companies are leveraging remote monitoring and control in oilfield and pipeline operations to detect problems and enable preventative maintenance. Building owners and property managers are incorporating smart grid technology to monitor and reduce energy consumption. Warehouses are also using robotic systems for order fulfillment to speed delivery and lower costs. The integration of digital and physical improves efficiency for corporations in many industries and is disrupting many sectors of the global economy.

There are many disruptions ahead, and large companies can use their abundant resources and ability to scale to make the most of digital-physical systems. In order to stimulate real transformation and break into new markets, companies will have to go beyond implementing new technology. Instead, they must re- imagine the entire experience and delivery of processes and experiences.

How will you, as a business leader, promote a move to digital- integration? Accenture suggests a 100-Day Plan to make measurable progress (Accenture, 2014).

•   Take an inventory of devices and divide them into two categories: those used by humans and others, such as sensors that act on their own.

•   Detail how data is currently collected in your organization to drive business decisions and determine how having more data about daily operations could improve efficiency and performance.

•   Understand how and where consumers engage with your products or services and think about ways that your company can deliver more compelling user experiences that provide new information and insights into decision making. Consider ways that you can influence behavior or decision making to help consumers choose to do business with your company.

•   Learn from leaders in other industries to find ways to enhance customer experience and embed intelligence into physical assets.

•   Organize a cross-functional team that unites IT and business organizations to pilot hardware innovations and test consumer and employee digital-physical experiences.

•   Collaborating with customer-facing departments, determine how they might benefit from adding real-time data analytics and create a strategy.

•   Reevaluate your company’s privacy policy in light of new digital-physical interactions and create guidelines for data collection, usage, transparency and user ability to opt in or out.

•   Decide what types of decisions and actions can be made by front-line workers to alleviate some oversight obligations from middle management.

Trend #2: From Workforce to Crowdsource

Today’s workforce can tap extended resources around the world thanks to cloud, social and collaboration technologies. Relying upon these technologies can be challenging, but can also give businesses access to an agile workforce with specialized skills. Organizations have also turned to tools such as videoconferencing, blogs, instant messaging and activity streams to boost collaboration among geographically dispersed employees.

Why is this happening now? Information technology is changing at an accelerated pace and collaboration and crowdsourcing platforms have evolved and are more mature. Early adopters of crowdsourcing such as Facebook that are using services to solve complex problems are also attracting attention.

An important point to understand is that the expanded workforce is not the same as employing contractors or outsourcing. It is much more fluid and versatile, and is a way to harness expertise, energy and creativity that may have been elusive or unfeasible before. Firms are beginning to realize the potential of utilizing crowdsourcing to drive innovation, product development and market research and digital technology makes this possible on a global scale.

Is your organization interested in exploring the possibilities of the expanded workforce? Here are some ways to begin.

•   Determine whether there are any existing connections to established crowdsourcing or expanded workforce platforms.

•   Find out if and how competitors or companies in other industries are using crowdsourcing.

•   Evaluate how your organization could benefit from using the expanded workforce for functions such as innovation, product development and market research.

•   Create an initial strategy for using existing online communities to support specific core functions.

•   Explore using open-source software that might be used for core IT functions.

•   Create and implement a pilot program to test an expanded workforce option that fits with your type of business.

Trend #3: The Digital Supply Chain

Many firms find it difficult to unlock the value of their data because it is difficult to access, share and analyze. Business leaders recognize the value of data, investing in big data tools and advanced analytics, but this is just a limited fix if data is not properly managed and there is no strategy on the enterprise level. As a result, most firms are unable to exploit big data for competitive advantage.

In their recent report, Accenture suggests that in order to get the most value from their data, organizations should be managing their data like any core product – in the context of a supply chain. (Accenture, 2014). This supply chain starts when data is created, and as the data moves through the supply chain it acquires more value. The supply chain ends with an output of valuable insight. In this model, the data services platform guides the movement and provides the structure for intelligent transportation of data throughout the organization.

Business leaders need to develop this type of end-to-end view of data in order to maximize value and achieve their business goals. Instead of building data silos that are owned by one department, companies should allow data to flow freely throughout the organization. The first step to making data visible and accessible is to create a data services platform. In addition, data needs to be prioritized so that important and time-critical data is accelerated through the system and less relevant data moves more slowly but still meets the requirements of the business. With quick access to valuable data, decision makers can perform analyses, gain insight and take action.

The information supply chain starts with ingesting data. This data can be gathered internally, but consider looking beyond the company database to supplement findings. Companies are tracking sentiment on social media sites and analyzing data in the context of dimensions such as weather, news events