We can’t read popular business literature these days without the mention of digital transformation and its closely-related cousin, disruption. But we wanted to know if digital transformation is really happening inside the companies our technology leaders serve. Moreover, is it just another buzz-phrase to fuel media and hype or is it a substantial shift in thought and behavior? I think we have good news for you… read on.
In our recurring review of Risk trends we found a surprising entry among the top five. Are we really making progress or is it just a momentary tease?
Finally, we take a step back from just reporting the Innovation trends from our Technology Management Radar and offer some insight on why SaaS and cloud refuse to budge from our list of the top five technology management innovations.
These are among the key findings from Fortium Partners’ February Technology Pulse survey, a brief but long-term study of the essential financial, risk and innovation trends among the world’s foremost technology leaders.
The Technology Pulse survey 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. Businesses leaders globally can gain valuable insights into the behaviors and drivers of CIO, CTO and CISO behavior in the existing and near-term market.
We took a break this month from the usual financial questions to dig into digital transformation. Without a doubt, digital transformation (those in the know call it DX) has captured the imagination and obsession of the media and consulting professions. Because the digital in digital transformation is broadly interpreted to be related to technology innovation, we set out to find out what our Technology Pulse survey respondents thought about it and how it’s impacting their daily lives as technology leaders. We asked three questions:
Multiple industries are experiencing a rapid digital transformation. How is your organization managing this shift?
Is your organization experiencing a major digital transformation that impacts the way your company does business?
As technology leaders, digital transformation is a part of day-to-day life. Which of the following statements is the most true when you define the technology disruption businesses are experiencing today?
- The velocity of change in technology is at a breakneck pace, pushing business leaders to make decisions faster and more frequently.
- The role of technology itself is changing, from processes to suppliers to models. We must rethink everything from the ground up.
- Technology is no longer a function inside the business; technology IS the business. All businesses are technology businesses.
- Digital transformation is a marketing buzzword. As a technology leader I believe these changes are business as usual.
The results surprised us! We’re further along this digital transformation journey than one might think. A whopping 87% of companies are experiencing a major digital transformation in all or some parts of the business. And a full 100% of respondents say that they (35%) or their organizations (49%) are making the push to adopt new technology to improve business or closely monitoring their industry to determine the right move (16%).
Twenty-five percent of business technology leaders believe that the velocity of change in technology is forcing business leaders to make decisions faster and more frequently. And almost 70% of the same group feels that businesses need to rethink everything about their business models from the ground up or re-cast themselves as technology companies altogether.
Only 7% of the top technology leaders in the country believe that digital transformation is all hype and that today’s environment includes the same changes we’ve been dealing with all along. We bet that number will drop based on the other responses.
So digital transformation is most definitely upon us. What is not clear is how companies are approaching digital transformation and which ones are doing it “right.” Over the next several months Fortium Partners will be delivering our point of view on digital transformation and dedicating this space to providing a deeper understanding of how technology leaders are participating in this trend.
To set the stage, Fortium believes that digital transformation is not a one-time event. You don’t transform once and then enjoy the results for years to come. The pace of change is such that being in a state of transformation-readiness is where a company must exist, and the initial digital transformation effort is simply the process of reaching that state, maintaining that state and undertaking the first batch of innovations the organization has determined are worth pursuing. The primary value of technology leadership to this process is they have the best grasp of the potential, and the limits, of technology in any transformation. We believe that there are three technology perspectives best managed by one or more technology leaders in helping companies achieve digital transformation:
- Operations - Achieving a state of transformation-readiness, in part, involves reducing the footprint of traditional “IT” such that these needs of the organization are met by the simplest and smallest organization possible while managing the least amount of internal technology possible to free up resources to focus on transformation. This is not “IT Outsourcing.” This is a highly selective and strategic process of relying on specialized technology providers for cost-effective and reliable solutions. We believe this is an evolution of the CIO role.
- Innovation - Concurrent with, and beyond, achieving a state of transformation-readiness, a combination of deep technology expertise (knowing the potential and limits of technology) and a product-centric and customer-centric mindset is needed to partner with the business in its quest to harness technology to create new business models and achieve higher customer intimacy. We believe this is an evolution of the CTO role (often found in software/SaaS companies) and includes aspects of the chief digital officer (CDO) role.
- Security - As technology becomes a greater part of the business landscape, security (information/cyber as well as physical access), compliance and governance become an integral part of every part of business systems, processes and interactions. Technology boundaries span many entities, people and geographies traversing a complex web of authentication, authorization and regulation. This is the evolution of the chief information security officer (CISO) and chief security officer (CSO) roles.
These three technology perspectives are complementary to the financial, marketing, operations and industry-specific skill sets and consultants needed to undertake digital transformation. Fortium will be expanding this point of view in the coming weeks and months in the Technology Pulse survey, the Fortium Advisor, our blog content and our continued contribution to the social business conversation.
Our February 2017 round-up of business-impacting events added a curious entry to the top five incidents affecting leading technology leaders:
Phishing/Spear Phishing (45% down from 54%)
Malware/Virus (42% down from 46%)
None (33% up from… 0%?)
Ransomware (19% down from 32%)
Denial-of-Service Attack (14% down from 22%)
What? All categories of incidents are down and “None” is up 33% from 0%? We’re not sure what to make of that. We would welcome the explanation that there is a positive trend toward fewer attacks or even that the bad guys took some time off over the holidays and got a slow start to the new year. We suspect it’s an anomaly as we haven’t seen corresponding headlines heralding a cybersecurity holiday. Stay tuned.
We’re expanding the top five in The Technology Management Radar to include the top 10. The reason is that the top five on the radar is pretty static and we want to explore what else is happening.
Software-Defined X (Network, Data Center, Storage, etc.)
Robotic Process Automation
It’s important to remember that these rankings are a weighted-average of their relative positions in the buckets of Watching, Considering, Pursuing, In Production and Abandoning. The “Watching” category tends to represent those technologies just entering the radar and poised to move into the mainstream. The top five in this category are:
Robotic Process Automation
It’s important to note that the adoption of Software-as-a-Service (SaaS) and cloud by mid-market and enterprise companies have already started a fundamental shift driving traditional IT components of people, skills, roles, data center spending, capex spending and more out of the enterprise and into more specialized technology providers. Much of this movement has even been precipitated by the chief marketing officer/chief sales officer (CRM, marketing automation, etc.) and the CFO (SaaS financials and other corporate finance applications) as the control of these expenditures move out of the CIO’s control. The role of technology leadership (CIO, CTO, CISO) is changing but not less relevant as there are myriad subtleties of managing integrations, security and leveraging data across multiple platforms for strategic advantage. These trends will be explored in the next several months as Fortium reveals its point of view regarding the reinvention of technology leadership for the era of digital transformation.
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.