Technology Pulse Report - September 2016


Monthly survey results from Fortium Partners

September 2016

Budget Performance remains positive, Phishing Nets more victims, and Non-Technology leaders Learn to speak cloud

Executive Summary

These are among the key findings from Fortium Partners’ September 2016 survey Technology Pulse, a brief but long-term study of the essential financial, risk and innovation trends among the world’s foremost technology leaders.

The Technology Pulse includes a brief series of information-dense questions to C-level technology strategists who deliver answers according to the current state of their business. The three key categories - Financial, Risk and Innovation - have the greatest long-term impact on the success of the application and management of technology in business.

The Technology Pulse provides an inside look at the biggest trends in technology for today’s businesses and corporate leaders globally can gain valuable insights into the behaviors and drivers of CIO and CTO behavior in the existing and near-term market.

Financial

For the most part, budget performance of technology leaders remains unchanged from our last survey. About 50 percent of respondents are “On Plan” for 2016 for their expense and personnel budgets while those who are “On Plan” with their capital budgets passed 60%. Of course that leaves the other half of respondents spending more or less than plan. Overall, more are spending less than plan than those who are spending more than plan with that gap widening this month from last month.  

What do the numbers tell us? Until we have longer trends and more details it’s hard to be specific but we’ll take an educated shot at it. With the U.S. presidential election looming and other political and financial uncertainties worldwide, it’s no surprise that the fourth quarter of 2016 might yield budget performance that is spending slightly less than plan. We continue to be particularly interested in personnel budgets as there are more respondents reporting that they are spending less than plan for personnel expense compared to 22 percent of operating expense budgets that are less than plan and 15 percent of capital expense budgets that are less than plan. Our Partners contend that technology efficiencies gained through automation, outsourcing and workflow improvements are allowing companies to reduce personnel. Perhaps the data is telling us that it’s happening even faster than anticipated (or budgeted).  

Risk

This month’s survey continues to raise eyebrows for the number and types of business-impacting events our respondents are facing. While production outages and Ransomware are still significant concerns at 28% and 23% respectively, it’s Phishing that takes center stage this month with over 60% of respondents indicating a Phishing/Spear Phishing event in the last 90 days.

For the uninitiated, according to Wikipedia, “Phishing is the attempt to obtain sensitive information such as usernames, passwords and credit card details (and sometimes, indirectly, money), often for malicious reasons, by masquerading as a trustworthy entity in an electronic communication.” The Anti-Phishing Working Group (APWG), a not-for-profit industry association focused on eliminating the identity theft and frauds that result from the growing problem of phishing, crimeware and e-mail spoofing, reported a 250% increase in the number of Phishing websites observed between the fourth quarter of 2015 and the first quarter of 2016. The report also claims that over 400 brands are targeted each month and that the retail/service sector is the most targeted sector.

Fortium Partner John Alvertos addressed Phishing in his recent blog post Security Awareness is a Year-Round Program. Alvertos quoted the 2015 Verizon Data Breach Investigations Report which reported that “23% of recipients now open phishing messages and 11% click on attachments” (DBIR, pg. 12).  Alvertos warned “Company network defenses will block most of phishing emails, but some will get through. And if we allow access to personal email (gmail, etc.) from the office network and if users have local admin rights on their desktops or laptops, then the risk increases.”

The key, Alvertos says, is year-round training. “Companies therefore need a year-round program that continues to educate and remind people about their shared responsibility to protect the assets of the organization and to act responsibly so as not to expose the company to threats. The program should also alert them to new types of threats or old threats that have morphed into new ones. And it should be carefully defined, in regards to the targeted audience, the media, the timing and the message. Using multiple communication channels, customizing your message to specific audiences, incorporating speakers and giveaways and strategically timing messages throughout the year should make the awareness program much more effective. And if part of the program is to periodically test our employee’s awareness via ‘gotcha!’ type of emails, or by leaving thumb drives around the office to see who plugs them in, the effect on awareness will be much more profound when they least expect it.”  

Innovation

Last month we were introduced to the media darling Blockchain as one of the fast-emerging technologies on the minds of technology leaders. While Blockchain remains on the list of more than 25% of respondents “Watching” list, it’s still the Cloud that takes the top spot of the emerging technologies that are in production and gaining steam. Whether it’s Software-as-a-Service like Salesforce.com, Platform-as-a-Service like Google’s App Engine, or Infrastructure-as-a-Service like Amazon’s AWS platform, the Cloud is here to stay and gaining steam by the day.

If you’re a non-Technology executive, learning about the Cloud can be a daunting task with all of the acronyms and technical terms. Fortium Partner Bob Breitman helps all of us get a non-technical perspective on the Cloud with his popular five-part blog series What Non-IT Executives Should be looking for in the Cloud. It’s a great series and we recommend you read all five parts but if you’re not planning to read it we leave you with this sobering thought… it’s not a matter of “if” you’ll go to the Cloud but “when."  The economics and efficiencies are just too compelling to be ignored. Of course, Bob reminds his readers that Fortium stands ready to help when it’s time to move.

Technology executives will be interested to know that Software Defined Networking (SDN) took the top spots of “Watching” and “Considering” in our survey this month. Market research firm IDC predicts the SDN market will top $12.5 billion by 2020 and IHS believes SDN will go mainstream in the data center and enterprise LAN in late 2016/early 2017 which is just around the corner.  

Finally, each month we ask our technology leaders if there are any technologies that are vying for their attention that should be added to the list. Next month we’ll be adding Robotic Process Automation (RPA) to the survey.  Be sure to check in with us next month to find out how RPA compares to the other technologies on our radar.  

Bonus Question... Literally

We asked technology leaders this month about the biggest factor impacting their bonus compensation. The good news is that 80% of our respondents receive bonus compensation. Of those, over 50% said that Overall Business Performance is the key metric that influences their bonus. The next highest factor at 18% was IT Performance. Trailing by a significant margin were Product Speed to Market and Budget Adherence.  

IT Performance is the bonus factor that IT Leaders have the most control over. Fortium recommends that technology leaders ensure that there is alignment with the CEO as to how IT performance is measured and what is considered exceptional. This usually starts with a CEO/CIO Alignment diagnostic followed by an initiative that gives detailed reports cards from stakeholders satisfaction with core IT services. If you need some help to make this happen, let us know.

 

About Fortium Partners and Technology Pulse

Fortium’s Technology Pulse report monitors technology trends impacting businesses now and in the future. We combine the insights of thousands of world-class technology leaders with analysis and commentary from its growing roster of partners – CIOs and CTOs on the forefront of delivering Technology Leadership as a Service to clients of all sizes and industries. For more information, visit FortiumPartners.com.