IT organisations today are participating in the building of a new digital platform with intelligence at the centre – and it enables businesses, can collapse industries and can fundamentally change society itself.
By Kathy Gibson
This is the word from Peter Sondergaard, senior vice-president of Gartner, who points out that, as a society we have done this before.
“As society we have built more infrastructure in the last 100 years than in the whole of history. And it has changed everything.”
Along the way, he says, civilisation has changed. “You are the builders of the infrastructure of our age. Civilisation infrastructure: it will forever change the way people behave.”
Sondergaard, speaking at the recent Gartner Symposium in Cape Town, adds that technology is moving so fast, with new competitors and customer expectations changing so rapidly, it might feel that civilisation is out of control.
“All of the technology disruptions seemed to approach gradually, but they arrived suddenly,” he says. “For CIOS and the people depending on them, it can feel like chaos. Just keeping up with new products and services means IT has to continually upgrade,” he says. “But you can do more than just manage – you can lead.”
In fact, says Sondergaard, this is an exciting time for CIOs as they are able to once again build systems that run the business after years of being disintermediated.
“Every leader sees the disruptive power of digital technology,” he says. “And the CIOs are still in control, often leading not by control but by influence. And it is now time to build again on a scale never before imagined.”
The technology infrastructure needed to build the digital platform rests on five pillars.
They are IT systems, customer experience, things, intelligence and the ecosystem foundation
“Each of these domains are interconnected and interdependent,” says Sondergaard. “All have a role and all are required.”
The foundation is the IT system, building on what already exists. “The data centres and applications are part of the foundation,” Sondergaard says.
“These applications have become mobile and social, while infrastructure has moved into the cloud, so systems are more open and accessible.”
About half of all systems are already hosted in the cloud, he says, although they are moving at different speeds – and some will always remain on-premise.
“So while the general trend is towards the cloud, we need to put these two approaches in balance. Use the cloud or internal capabilities where necessary.”
This means CIOs need to look at rationalising applications, consolidating and modernising systems, retiring outdated technologies, and investing in resilience.
Once that’s done, IT should move to the next step, which is making cloud, mobile, social and big data part of their core capabilities using a hybrid approach.
“That is the technology starting point, but not the compete digital platform,” Sondergaard says.
The digital platform, he explains, must address the customer’s digital experience – and this may be the only experience your customers have.
“Leading organisations are creating new experiences enabled by ambient interfaces, augmented reality, multi-screen interfaces and virtual reality. You need to design differently, to orchestrate an outside-in experience.
“Your level of investment in customers experience will show how serious you are about this.”
But this is not enough on its own, Sondergaard adds. “The new competitive differentiator is understanding the customer’s intent through advance algorithms.”
The next platform – things – requires a mix of disciplines blending traditional engineering with computer engineering, Sondergaard says.
The word of customer connected objects is moving quickly, while the world of enterprise connected objects is emerging rapidly. This embraces everything up to and including countrywide infrastructures.
“But don’t be distracted. Devices are easy and mostly undifferentiated,” Sondergaard says. “They are nothing without a system, a platform on which to capture value.
“These devices create an influx of data.”
The world if IT and the world of operations meet in the Internet of Things (IoT), says Sondergaard.
Hundreds of vendors claim to have a core IoT solution – which means that integration is a top priority. However, IoT integration is not a single thing; it has many dimensions.
Companies are creating new organisational models to cope with IoT. Many began with trying to integrate IoT into their existing organisations, but have since opted to form new organisations to cope with the reality of IoT.
“There are hard realities with IoT; we can’t just bolt on new systems. Companies are having to rework their IT systems to accommodate IoT. The big challenge is integration.”
The biggest challenge of all is the need for data integration, Sondergaard says. “Smarter objects not only need data, but they also create higher risk -and need to be protected more than existing systems, the stakes could be life or death.”
The word of IoT is changing how companies invest in analytics. Decisions are now made in moments, and have to happen inline. “Realtime analytics will outpace traditional analytics by a factor of three by 2020.”
The next domain, intelligence, starts with analytics and data science. “But data is not where the action is,” says Sondergaard. “Algorithms is where the action is. And artificial intelligence is also coming to the fore. Machines learn from experience and come up with outcomes that adapt to the world via the data they collect. Artificial and machine learning moves at the speed of data , not the speed of code releases.
“The systems make decisions that businesses will trust, unsupervised. In future, we will employ people to train systems rather than just code them,” Sondergaard says. He believes this technology will be producing results within two years – so it’s not a long-term project.
The final domain on the digital platform determines how the organisation works in the rest of the wold, transforming traditional business with linear supply chains to a network of digital businesses.
“How are you going to build smart cities? You need an ecosystem.”
This means CIOs need to provide electronic touch points for suppliers and partners – simple connection points where others can build capabilities the CIO might not have even thought of.
These APIs are not just technical consideration, Sondergaard says, they are fundamental business processes.
“They are as important to your ecosystems as synapses are to the brain. APIs are an essential component of the business, and need an API management system at scale.
“If you have already built out APIs, great; if not, start now.”
API management is vitally important, Sondergaard says. “A diverse API system will allow your organisation to succeed regardless of what happens. A strong ecosystem will help to manage the transition.
“Ecosystems are the future of digital.”