Digital Leadership Community Roundup — Enterprise Resiliency

Chris Weston (Principal, European Client Advisory)
Marc Dowd (Principal, European Client Advisory)

On June 10 the IDC Digital Leadership Community, comprising CIOs from across Europe, came together to discuss enterprise resiliency and what it means for technology leaders.

The “new normal” is a phrase that we’re hearing a lot about lately. The COVID-19 pandemic has changed things to such an extent that, as IDC’s Marc Dowd pointed out, there is now a variety of “new normals” within the business environment.

One of these is resiliency, a word that has taken on new relevance in the post-COVID world — even though it’s not always clearly defined.

A speaker asked a simple question. “What does resiliency mean?” One of the key elements is to reduce vulnerability to the actions of criminals involved in cybercrime. The speaker went on to talk about concerted cyberattacks on public amenities in Spain — the sort of attacks that will have a wide-ranging effect on the general public.

He said his organisation had put together a plan, based on its own set of security rules, but he could still not be a hundred percent confident that it would be enough to provide true resiliency.

The conversation moved to a recent trend of introducing extra resiliency into supply chains as a result of the pandemic. Companies have been used to operating a lean, just-in-time process, but to introduce additional resiliency they have been bringing in extra stock. This was also noticeable during the Brexit process as uncertainty around the availability of goods increased during the fractious political process. In 2021 the Suez Canal blockage also introduced unexpected delays.

However, as one participant noted, the technological trend is in the other direction. Closer integration with suppliers and customers, reducing lead times for raw materials and delivery times to customers, has been the focus in recent times. This, as he pointed out, is great from a “lean” perspective, but increases the fragility of ecosystems if not managed carefully.

So, the real question is: how can CIOs be better prepared to deal with the unexpected? It’s a thorny question and one that fits into a management concept known as VUCA (volatility, uncertainty, complexity and ambiguity). In other words, building a variety of scenarios so that it’s possible to evaluate all the options. The group discussed this as a method for explaining the need for resilient thinking in their own organisations.

A lot of the talk, naturally, was around the role of the CIO. There was agreement that the CIO should be a leader in all of these discussions, but according to one speaker, it should go further. He said there needed to be a wider debate on the matter. “It strikes me that building resiliency needs to become a multiteam sport engaging internal and external teams,” he said. There’s another issue too, one very relevant in this era. “In a world of cloud services, thinking of resiliency in an internal way is very limited,” he said.

There are plenty of challenges ahead — there always are when dealing with uncertainties — and CIOs will have their work cut out to handle the unexpected.

There are some signs of optimism, however. The introduction of GDPR has, according to the consensus in the group, improved openness. It may not have stopped cyberattacks but there is a sense that fewer things are hidden and more organisations are happy to talk about their experience with cybercrime. One speaker said being more open with customers is how we’re going to do things in the future, while another said that open standards across sectors can change the way we’re working by making us more collectively supportive and not just interdependent.

A final word from a CIO in the group was a plea for organisations not to forget the need for sensemaking — the use and understanding of qualitative data as well as quantitative data when modelling resiliency in organisations. Social interactions and collective experience are at least as important as data and connectivity in planning for and recovering from unexpected events.

There are always going to be “black swans” that challenge the resiliency of an infrastructure, but if CIOs can fight for budget, lay down some ground rules and work with business colleagues and partners, some of the worst effects can be avoided.


IDC European Data Strategy & Innovation Awards 2021

Are You Creating Value from Your Data?

Philip Carnelley (Associate Vice President)

I was delighted to be part of IDC’s European Data and Intelligence Summit held (virtually) on 7th June this year, attended by around 100 chief analytics/data and digital officers. We had great input and indeed great feedback from the attendees.

One of the key themes that surfaced at the conference was the keenly felt need to substantially increase the value organizations are getting from their data assets.

This isn’t a trivial matter: attendees said that their challenges include overcoming siloed data (a repeated theme), moves to new platforms, and above all building a data culture. Indeed, a survey of attendees showed that the clear number one issue that data organizations face is cultural:

Source: IDC survey of Data-Intelligence Summit attendees, June 21

Practical Strategies for Deriving Business Value from Data

Happily, the conference yielded many valuable strategies for generating business value and a data culture, both from the speakers and in the round-table discussions. Keynote speaker Nick Blewden of insurance market Lloyds of London had several suggestions, including building in a feedback loop to ensure that data value was recognized and amplified through measurement and improvement. He pointed out that gaining maximum value is something that is often best achieved collaboratively with partners: working towards shared as well as unique goals.

Francois Zimmerman of Tableau and Onkar Deshpande of AWS explained how a change of mindset is required to build a truly data-driven organization: a recognition that data needs to be put to work, that data projects should be outcomes driven. The ultimate goal is effective decision-making by front line workers, not by the centre: so, decision-makers at all levels need access to the right tools and trusted data. This may seem self-evident, but in our event survey, less than a third reckoned that their business generally understands the opportunities for improvement that data, analytics and AI approaches can bring. Most said it was only senior managers or the data organization itself who “get it”.

I particularly liked the idea from Taras Bachynskyy of SoftServe: gamification. His company has been helping to grow a data culture through creating a game to help data decision-makers understand to build a modern, data-driven culture. This challenges the player to become data-driven by selecting choices based on real-life scenarios and to see how decisions make an impact on the business’s bottom line and where the player could have made better choices to increase ROI.

My research clearly shows that organizations which adopt a data-driven approach to digital transformation have survived the last 12 months better than their peers, and are better positioned for the future. We find that advanced analytics users typically show several percentage points higher revenue and reduced costs thanks to their analytics deployments.

A Notable Example: Bed Management in a Pandemic

Value from data is not limited to simple bottom line numbers. A very worthy winner of  IDC’s 2021 European Data Strategy and Innovation Awards, presented at the Summit, was Wrightington, Wigan and Leigh Teaching Hospitals NHS Foundation Trust (WWL) who won the Data Powered Business award. WWL pivoted their hospital analytics dashboard into a predictive tool for use by clinicians and other frontline staff to manage demand for hospital beds during the COVID-19 pandemic, and thus improve patient care. Amongst other benefits, WWL achieved the 4th lowest relative risk for prolonged length of stay in the northwest of England, and during February and March, at the height of the pandemic’s second wave, WWL hospitals successfully maintained a zero cross-infection rate (the average was 12%).

So, in sum: ‘build it and they will come’ is not a strategy for data value. A culture-first approach targeting the whole organization is necessary for getting the best out of your data assets.

For more information about IDC’s research into business analytics and data strategies, industry trends, established and emerging use cases, and key players, please contact Philip Carnelley, or head over to https://www.idc.com/eu and drop your details in the form on the top right.

For more about the IDC Data Awards winners see this blog post.


Landing the Message – 6 Vital Communication Areas for IT

Chris Weston (Principal, European Client Advisory)
Marc Dowd (Principal, European Client Advisory)

There are many areas of expertise for a technology leader to master.  One of these, just as important as the others, is communication – how you engage colleagues and clients to inform them about your strategies, your delivery and how they can best work with your team to achieve the organisation’s outcomes.

Some of the key communication areas are:

What the IT Team Can Do for You

This is almost “101 Basic” IT Management but it is amazing how often this is neglected.  Publishing a service desk number and email is one thing but is that the best way if your user wants to know how to create their own blog, or ask about a feature of the information management system?

You should consider what types of information could you publish to speed up information dissemination processes, rather than engaging with a back-and-forth through the various helpdesk teams?  Other examples where information about the process will help the user understand the role of IT are what services are available, and how long should you expect to wait for a resolution?  All of this type of information is about how IT teams explain what they do and what value they can provide, and through understanding this need they should shape their interfaces accordingly to engage in ways that their colleagues in the larger business want to engage.

Evangelism

This in one of the roles of the CIO, the CTO, the CDO and others within the IT team, such as Business Relationship Managers, who must have deep connections with their stakeholders.  They must be not just noting down the requirements but also describing the possibilities.  A business that does not have the knowledge of what emerging technology could do for them is doomed to play catch up at every turn. 

This requires a level of trust and credibility which takes time to build but the benefits are clear.  Work with your stakeholders to understand the key data in their business area. Some ways of thinking about it are: 

  • What is vital data that they will act upon immediately?
  • What is the information they will use for longer-term planning?
  • What is important to the interactions with their customers?
  • and how can data help them make relationships with their suppliers more effective?

Evangelism is about educating the IT senior team about the opportunities to add value as well as educating business stakeholders about the technologies that could improve or even transform their business.  This is about building and maintaining competitive advantage and raising barriers to entry for new entrants into your market. It is one of the key ways for IT to show value at the strategic level.

Getting More Out of Your Existing Tech

Shiny new tools are all well and good, but we could be so much more efficient in many cases if we only exploited the technology we have.  From simple tips to make daily tasks more efficient to “did you know we have the capability to integrate directly with supplier’s systems?”

Often this communication is a joint effort between users and suppliers of technology.  Often vendors can be leveraged to help with this, they want their software to be used effectively for lots of good reasons.  Problem managers are also important as they monitor the issues that cause frustration and look for long term solutions. Help them to communicate workarounds and smart hacks.

What Insights Are Available to the Wider Business

I often think of an IT teams as a car mechanic. If you use the same garage to service your car regularly, they can give you valuable insight into how you could get more life from your car, reduce your fuel and repair bills etc. – just through the insight into how often they replace brakes, wear on tyres, condition of the oil and so on. But – you need to have a good relationship with a mechanic before you will trust them and accept their tips and suggestions. IT is like a knowledgeable mechanic that knows your car well; they see the whole business, they are involved from start to finish of most processes and they have a long term view of the future of the technology.  IT can give colleagues great insights without telling them how to “drive the car”.  If this is not happening, maybe those relationships aren’t working well enough?

What Is Going Right, What is Going Wrong?

Self-awareness is an important thing to communicate but you need to do it from the other person’s point of view. IT teams often publish reams of data and statistics about their services that nobody outside IT can relate to or have the time to digest. 

Mostly, business people want to know that you’re onto a problem and have a resolution date if it’s something that’s affecting them.  The police have a trick for this, and it’s called tape. Car in a ditch?  Tape it up. That lets people know that someone has informed the authorities and they have it in hand.

Police Tape is not quite good enough for corporate IT, unfortunately!  Regular communication of things that go well are important too.  If you have only had 1 hour downtime this quarter, and that’s better than the industry average, why not report that?  Your business colleagues won’t congratulate you for it, but the effect is to gradually increase confidence amongst a user base – as long as you acknowledge the rough along with the smooth by being open to take responsibility for failures

What Have You Got to Look Forward to?

What projects are ongoing, what benefits will they bring, and when will they be live?  This is an area that is generally done well in IT teams, but it is worth mentioning here. Transparency and a shared celebration in delivery builds confidence and motivates everyone involved.

Those are some broad areas of communication that IT Teams should be managing. If you are doing them all, well done, if your team is also doing them and they you probably have a great relationship with your stakeholders – something we all aspire to.

 

This week in our Digital Leader’s Community conversation we will be talking about how digital teams communicate with the rest of the business, in particular the second element of communication – What can I tell my business about the future of technology.  If you’d like to join this discussion between Europe’s finest digital leaders, then please contact me cweston@idc.com for a free invitation.


What's Special About the Number Ten in Device Business Cycles?

Simon Baker (Program Director)

Some simple numbers tell us some key things about the business cycles of the PC and phone industries and how many devices are in use. Some of these trends may be coincidental, but others are rooted in the pace of technological advance.

In the Old Testament, the agricultural cycle on which ancient life depended was seen as seven years — seven years of fat, followed by seven of famine.

In the modern device business, the key number tends to be ten, and then divisions thereof.

PC sales are currently going through a big boom, which started with the impact of the coronavirus as the new decade opened. Sales rose 12.9% globally last year, and 15.9% in Europe.

IDC has been ratcheting up its forecasts and now expects the PC market to grow 18% this year.

Then sales are expected to slow again.

A Regular Cycle

A decade ago, there was another boom and bust. Notebook sales had taken off in the years before, and then they fell back rapidly. And around 2000 there was also a rapid slowing in the industry after years of fast growth.

The reasons behind these ten-year cycles are all different. The earliest blip, around the millennium, was due to economic fallout from the 1998 economic crisis.

In 2010, the explanation was to do with competing technology. The market had risen in the years before as notebooks became lighter and more affordable, and as consumers could use cellular connection dongles to make them truly mobile. But then the boom turned to downturn as the LTE fourth generation mobile revolution took off and the smartphone market bloomed instead.

My research colleagues at IDC point to major global economic events as the key reasons behind these cycles as much if not more than economic cycles.

These would include, for the boom phases, the fall of the Berlin Wall at the end of the 1980s, and the growth of the Chinese market towards the end of the millennium; and on the negative side, the more conventional 1998 Asian economic crisis and the 2008 global financial meltdown. These combinations produced a short sharp slowdown after a longer boom.

That these cycles were approximately once a decade was more coincidental than anything else, and such 10-year cycles can’t be relied upon to happen again.

Every Decade a New Mobile Generation

But, as it happens, there is a regular decade-long cycle in the mobile industry linked to technology.

The introduction of new generations of mobile technology has come at roughly ten-year intervals — 2G (1991), 3G (2001), 4G (2009), and now 5G (2019).

That even holds true for “1G”, the little remembered Nordic Mobile Telephony — the first analogue mobile system “car mobile”, which was launched in the Nordics ten years before 2G, in October 1981.

These new mobile generations produce significant refresh cycles, as each adds important new capabilities to mobile communications.

Then there are other useful rules of thumb in both the PC and smartphone businesses that relate to the number ten.

Divide ten by two and you come up with the average lifespan of a notebook computer.

Divide by two again and two and a half years is the average life of most smartphones in many developed markets, including many countries in Europe.

The lifespans of the PC and smartphone are growing, and these yardsticks may not hold true in a few more years.

Also, they apply only to more developed countries, with the average lifespan of a PC and a smartphone being considerably longer in les developed areas.

Software Upgrade Cycles Are Less Important

One thing to note in these cycles is what they are not, and they are not software upgrades.

In PCs, the most technical cycle is the launch of new versions of Windows. This cycle is quite short, varying between two and three years (though five between XP in 2001 and Vista in 2006), but it has not produced big fluctuations in PC sales.

If anything, it is the sales bump when Microsoft withdraws support for a software version which is more important, which used to be after around 15 years, but in some cases has now shortened to less than a decade.

In mobile phones, new versions of Android have had a modest impact on phone sales, and with the introduction of online OS updates such upgrades have little impact on sales at all. While new versions of iOS are linked to the annual new models, it is the devices themselves that gain most of the attention.

The factor that has less of an impact than might be expected is the standard economic cycle. In the US, the average economic cycle is slightly less than five years, two-thirds of which is expansion followed by contraction.

The PC and phone industries have not consistently followed these waves, though there have been exceptions, such as the very deep economic contraction in 2008.

Over a half of the value of the PC market is accounted for by business purchases, and here the correlation with economic recessions is unsurprisingly stronger. 

Consumer markets, on the other hand, seem much more immune to recessions. Spending on mobile services appears to be a consumer priority, and rarely drops even in hard times.

Technology Cycles Look Set to Hold

Maintaining that the next sales cycle in the PC industry will again be a decade is a leap of faith. But technology trends look set to continue. Current planning suggests 6G, which will focus on bands yet further up the frequency spectrum in the millimeter wave above those for 5G, will again be introduced at around a ten-year step, around 2030.

The single most important technology trend in PCs, though not related to market size, has been very long lasting. Moore’s law, defined by Intel cofounder Gordon Moore, that the number of transistors in an integrated circuit (IC) doubles every two years, was first put forward in 1965, and it amazingly held true for more than a half century.

In recent years, it has appeared that the rule could not hold true for ever and that innovation was slowing down, and some commentators believe that it stopped being true by around 2019.

Even if the pace slows somewhat, miniaturization will continue. At the beginning of May this year, IBM announced that it had been able to reduce the spacing in integrated circuits down to 2 nanometres (two thousand-millionths of a metre). The technology, which includes placing of transistors in multiple layers, could be as much as 45% faster than the mainstream chips in many of today’s laptops and phones and up to 75% more power efficient, IBM said.

TSMC, the world’s most important IC producer, responded with the announcement that with partners including MIT it was working on a 2D technology which would allow it to go further and produce one nanometre ICs.

Such chips may be several years away in production, but they keep hope alive that Moore’s law may still apply.

Further out, there is some belief in the industry that AI may help designers move to additional interval reductions in ICs, though there is a boundary in the size of the atom itself, which varies in size from 0.1 to 0.5 nanometres.

These cycles of technological advance spur performance enhancements and the replenishment of devices and keep the momentum of the industry going, underpinning the pacing of the above commercial cycles that are evident in the market.