Executive Summary

Continuing our discussion of Digital Transformation, we explore the challenge of starting such a transformation and the related risks of introducing new technology while you still have to maintain the old. Turns out that’s harder than we think and it adds a lot of risk to an already risky undertaking. But there’s no stopping the move to the Cloud (which is an admittedly simplistic way of discussing the replacement of older technology with newer technologies). Last month we introduced the technology leadership perspectives of Operate, Innovate and Secure. This month we focus on Operate - the traditional domain of the CIO.

In our recurring review of Risk trends we saw Insider and Privilege Misuse jump from #8 to enter the top five at #5. Who knew the enemy was so close?

Finally, we review the top 10 Innovation trends from our technology management radar, the gradual slip of blockchain out of the top 10, and we introduce a few new technologies that will vie for attention in next month’s radar.

These are among the key findings from Fortium Partners’ April 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. Business leaders globally can gain valuable insights into the behaviors and drivers of CIO, CTO and CISO behavior in the existing and near-term market.

Technology Leadership-as-a-Service - Operate

In the March 2017 issue of the Technology Pulse report, we shared our findings on the extent to which Digital Transformation is real and affecting technology leaders. We found that 87% of respondents are experiencing some effects of the digital transformation trend and 100% are either making the push to adopt technologies to transform their business or monitoring their industry to find the right area in which to invest. We then outlined Fortium’s threefold perspective on Technology Leadership (Operate, Innovate and Secure) and how we believe that leadership can impact a company’s path toward an effective transformation that leverages technology for better business outcomes.  

This month we focus on first of those three perspectives: Operate. We proposed that achieving a state of transformation-readiness involves “reducing the footprint of traditional IT such that these needs of the organization are met by the simplest and smallest organization that will work while managing the least amount of internal technology possible to free up resources to focus on transformation.” In our April survey, we asked three questions related to this idea of transforming traditional IT:

  1. Approximately how much of your technology infrastructure is legacy-based versus cloud-based?
  2. How do you see your technology infrastructure changing in the next 18-24 months?
  3. One of the biggest challenges for technology leaders today is keeping legacy technology investments optimized in parallel with new innovations that help drive the business. What are the toughest parts of this hybrid technology integration in today's business environment?

Balancing Legacy Technology with Innovation

We’ll get straight to the point: 50% of our technology leaders only had 25% of their technology infrastructure moved to the cloud, and a full 86% had 50% or more of their technology infrastructure defined as “legacy” (‘not cloud’ for simplicity). A full 66%, however, say they will seek more cloud-based or subscription services in the next 18-24 months. So there still a lot of work to do and it appears it will happen quickly.  

But the answers to our third question speak to the challenges of maintaining both old and new technology strategies (what some call bi-modal or two-speed technology). They are:

  • It’s harder to keep information secure with a misaligned enterprise architecture (one which must service both the old and new)  - 38%
  • There is a talent shortage on the legacy systems that help run my business - 34%
  • Governance and compliance are completely different for legacy systems than for my hybrid systems (resulting in double the work) - 31%
  • My hybrid system is not delivering the type of data that we need to move to the next phase of delivery - 28%

While our survey this month didn’t speak directly to why technology leaders are moving from legacy to cloud (see last month’s issue regarding Digital Transformation), it is clear that they are moving, and the longer it takes them, the more painful it is.  

Transformation-Ready is the Goal

Technology leaders often find themselves in this place of trying to take advantage of advances in technology only to find themselves stuck between two powerful forces which make their companies prime candidates for disruption:

  • The promise of technological innovation, and the stories of those taking advantage of it, drive organizational leaders and their technology leaders to move from a stable state to a less-stable state of change, and

  • The pain of living in the midst of the transition (see above) causes the organization to question their resolve to complete the transformation

The longer the transition, the more painful and risky the journey. When pain and risk cause organizations to abandon transformation and return to a stable state, what feels like stability is actually setting the organization up for future, greater risk. The wider the gap between where a company is and where they need to be, the less likely they’ll be able to make the transition without serious disruption to the business.

The Agile movement has taught us that small, incremental changes are less risky and more successful than large, ambitious changes. The Lean movement and similar concepts have taught us that the more we do something with a genuine feedback loop for improvement the better we get at it over time. Applying these concepts to Technology Leadership, we must be making small changes consistently to maintain small gaps between where we are and where we want to be. When we do this, we maintain a state where the risk and magnitude of change remain small and the effort to maintain alignment with the external environment is minimized. We call this Transformation-Ready. But how do we get there and stay there?

TLaaS Operate - Getting to Transformation-Ready and Staying There

The Operate perspective of Technology Leadership-as-a-Service (TLaaS) is primarily concerned with how the organization uses technology to support the known needs of the business in the most efficient and effective manner. Operate is the domain of the Chief Information Officer (CIO) and, in most companies, it is the CIO who has the most overall responsibility for the success of Information Technology (IT) and commands most of the resources (money and people) dedicated to supporting the needs of the business through technology. And, in most companies, the majority of those resources of money and people are dedicated to maintaining the existing technology - leaving fewer resources to apply to innovation and security.

While the CIO often owns responsibility for innovation and security, s/he is often so burdened with the Operate responsibility that the promise of innovation and the risk management of security are often not optimized. We address this problem in two ways:

  1. Separate the responsibility for Operate (the CIO) from Innovate (CTO/CDO) and Secure (CSO/CISO).

  2. Allow the principles of Operate to continually achieve the greatest effectiveness in the smallest, most secure footprint in order to take advantage of greater innovation.

The entire process of achieving transformation-readiness is beyond the scope of this article but involves iterative cycles of Assess (where we are), Align (where we need to be, in measured amounts) and the Agenda (roadmap) to get there with a bias toward a smaller IT organizational footprint. It also includes more reliance on external partners such as cloud, SaaS, managed service providers (MSPs), robotic process automation (RPA) and, increasingly, artificial intelligence and machine learning. Such an organization is better able to maintain equilibrium with the external environment, avoid external disruption, and direct more resources toward innovation and customer intimacy.

If you or your organization would like more information on how Fortium’s Technology Leadership-as-a-Service is helping companies become Transformation-Ready, contact us right away.

Risk

Our April 2017 round-up of business-impacting events added Insider and Privilege Misuse to the top five incidents affecting leading technology leaders:

  1. Malware/Virus (35% down from 42%, up from #2)

  2. Phishing/Spear Phishing (33% down from 45%, down to #2)

  3. None (28% down from 33%, Still #3)

  4. Ransomware (21% up from 19%, Still #4)

  5. Insider and Privilege Misuse (18% from 9%, up from #8)

Innovation

The top ten this month in The Technology Management Radar includes:

  1. Software-as-a-Service

  2. Cloud

  3. Software-Defined X (Network, Data Center, Storage, etc.)

  4. Internet-of-Things

  5. Machine Learning (up from #6)

  6. Desktop-as-a-Service (down from #5)

  7. Robotic Process Automation (up from #9)

  8. Cognitive Computing (down from #7)

  9. Device Mesh (up from #10)

  10. Virtual/Augmented Reality  (up from #11)

Blockchain technology appears to be at a crossroads, with few major production deployments likely to happen in 2017 and its future still being debated.
— Larry Sikon, Fortium Partner

You’ll notice the conspicuous absence of blockchain from the top 10, even though it ranked #8 last month. This comes as no surprise to us, as our own blockchain expert Larry Sikon published an explanation of what's happening in his March article, Blockchain at a Crossroads. That allowed virtual/augmented reality to re-enter the top 10 at #10. While blockchain seems to be cooling off, it is definitely still being discussed in tighter fintech circles. We’ll continue to monitor its progress but perhaps it is being overshadowed by these write-in technologies that will be added to the radar next month:

  • Artificial intelligence (will be combined with Machine Learning)

  • Big Data/Data Lakes

  • Bots

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 world-class technology leaders with analysis and commentary from its growing roster of partners – CIOs, CTOs, and CISOs on the forefront of delivering Technology Leadership as a Service to clients of all sizes and industries. For more information, visit FortiumPartners.com.

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