IDC Predicts a DX Economy


IDC today announced its worldwide information technology (IT) industry predictions for 2016 and beyond. The predictions were published in a new IDC FutureScape report. As we embrace the notion of Future Thinking

This forward looking guidance is critical. Here is a snippet from the report:

“The disruptive impact of digital transformation is about to be felt in every industry as enterprises ‘flip the switch’ and massively scale up their DX initiatives to secure a leadership role in the DX economy,” said Frank Gens, Senior Vice President and Chief Analyst at IDC. “In the next two years, two-thirds of Global 2000 CEOs will put DX at the center of their growth and profitability strategies. By the end of this decade, IDC predicts that the percentage of enterprises with advanced DX strategies and implementations will more than double.”

IDC predicts that the scale-up of digital business strategies will drive more than half of enterprise IT spending within the next 24 months, rising to 60% by 2020. Mastery of 3rd Platform technologies will be table stakes for successfully executing DX business initiatives and “Cloud First” will become the new mantra for enterprise IT. Virtually none of the other 3rd Platform technologies or major DX initiatives is possible in scaled-up implementations without the Cloud as the foundation. By 2020, IDC predicts that enterprise spending on cloud services, the hardware and software to support cloud services, and the services for implementing and managing cloud services will exceed $500 billion, more than three times what it is today.

Source: FutureScape

Additional predictions were provided:

  1. By the End of 2017, Two-Thirds of the CEOs of the G2000 Will Have Digital Transformation at the Center of Their Corporate Strategy
  2. By 2017, 60% Companies with a DX Strategy Will Deem It Too Critical for Any One Functional Area and Create an Independent Corporate Executive Position to Oversee the Implementation
  3. By 2018, 80% of B2C Companies Will Have Created Immersive, Authentic Omni-Experiences for Customers, Partners, and Employees; 60% of B2B-Centric Companies Will Have Done the Same
  4. The Top New Investment Areas Through 2017 Will Be Contextual Understanding and Automated Next Best Action Capabilities
  5. In 2016, 65% of Large Enterprises Will Have Committed to Become Information-Based Companies, Shifting the Organizational Focus to Relationships, People, and Intangible Capital
  6. By 2018, 75% of the G2000 Will Have Deployed Full, Information-Based, and Economic Models or “Digital Twins” of Their Products/Services, Supply Network, Sales Channels, and Operations
  7. By 2020, 60% of the G2000 Will Have Doubled Their Productivity by Digitally Transforming Many Processes from Human-Based to Software-Based Delivery
  8. In 2016, the Level of Connectivity Related to Products, Assets, and Processes Will Increase 50% for All Industry Value Chains
  9. The Sharing Economy Will Give Rise to the Networked Free Agent and Skill-Based Marketplaces, Resulting in More than 10% of Work Being Sourced in this Fashion in Mature Economies by 2019
  10. By 2018, at Least 20% of All Workers Will Use Automated Assistance Technologies to Make Decisions and Get Work Done

The Future Business Landscape


I expect the conversation regarding the Future of Business to intensify over the coming months. Evidence is mounting that business as usual is a thing of the past. In a recent post by SAP, they present ninety nine ways that digital will change business. As you look at the information presented, and see the number of shifts occurring at the same time, it’s hard to imagine a business landscape that weathers this storm unscathed. Here are examples of these shifts from the SAP post:

  • At the current turnover rate, 75% of the companies in the S&P 500 in 2027, will be new (companies not currently in index today)
  • By 2019, approximately one quarter of the entire U.S. workforce will be independent workers (self-employed, independent contractor, freelancer, temp contractor, etc.)
  • By 2030, 10% of the largest companies in the U.S. will be virtual corporations (less than 10% of their workers will be in an office at any point in time)
  • 50% of the U.S. Jobs lost in the 2008 recession were middle-skilled jobs, but only 2% of the jobs gained since then have been middle-skilled
  • By 2025, there will be 10 global virtual currencies that will be considered mainstream. Their combined market value will exceed $5 Trillion, and Bitcoin will still be the largest.
  • Private and commercial robot use will grow 2,000% from 2015 to 2030, creating a $190 billion market
  • By 2030, 2 billion jobs will disappear – roughly 50% of all the jobs on the planet – as a result of technology advances
  • 3D Printing usage will grow 2000% between 2015 and 2030
  • Purpose-driven and value-oriented organizations outperform their competition 15 to 1
  • By 2030, sensor use will grow 700,000%, solving nearly every human need such as cancer-killing chips
  • By 2020, information will reinvent, digitize, or eliminate 80% of business processes and products
  • Although 90% of companies view advanced and predictive analytics as important, less than 30% have currently deployed them, and only 30% have plans to do so
  • There will be more words written on Twitter in the next two years than contained in all books ever printed
  • By 2025, the total worth of IoT-enabled technology is expected to reach $6.2 trillion – most of that in healthcare (2.5 Trillion) and Manufacturing (2.3 Trillion)
  • Within the next five years, more than 90% of all data from IoT will be hosted in the Cloud, reducing the complexity of supporting IoT “Data Blending

Just a small sample (more via the link above) supporting the notion that the future of business could look considerably different than its past. I’ll pursue the future business landscape in up-coming posts.

IBM Report on Analytics


In October, IBM released a report from their Institute for Business Value titled Analytics – A Blueprint for Value. IBM releases these reports on a periodic basis, and this one is focused on the growing importance of analytics to business success. Through their analysis, they came up with nine levers that represent the sets of capabilities that most differentiated leaders exhibit:

  1. Culture: Availability and use of data and analytics within an organization
  2. Data: Structure and formality of the organization’s data governance process and the security of its data
  3. Expertise: Development of and access to data management and analytic skills and capabilities
  4. Funding: Financial rigor in the analytics funding process
  5. Measurement: Evaluating the impact on business outcomes
  6. Platform: Integrated capabilities delivered by hardware and software
  7. Source of value: Actions and decisions that generate results
  8. Sponsorship: Executive support and involvement
  9. Trust: Organizational confidence

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A Closer Look at Transformation: Descriptive to Prescriptive


Next up in this transformation series is the eighth enabler: the evolution from descriptive to predictive analytics. At the heart of future success lies the ability to leverage insight for competitive advantage. Yet, analytic capability and data driven cultures are lacking in most organizations, and most executives when assessing their positioning on a descriptive-to-prescriptive scale answer level one. The table below defines each level:

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A Closer Look at Transformation: Sense and Respond Systems


Next up in this transformations series is the sixth enabler: sense and respond systems. These systems are critical to the transformation agenda, as most of the disruptive technologies likely to impact the enterprise in the next decade have data at its core. The resulting data explosion promises to complicate information management for most companies. As the speed of business accelerates and the amount of data flowing through company ecosystems expands, the need to sense stimuli and enable a real time response intensifies. Fortunately, rapid advancements in the price and performance of technology make realizing this sense and respond paradigm achievable and economical for a wide range of use cases – but this is arguably one of the most difficult components of transformation road maps.

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Digital Enterprise Road Map Series: Part 6 – Insight


Part six wraps up our Digital Enterprise road map series with a focus on moving insight delivery from descriptive to prescriptive. Throughout this series, I have stressed the importance of analytic excellence to long term success. But current methods such as traditional business intelligence (BI) focus on reporting and analysis that seeks to answer questions related to past events – what happened. Advanced analytics seeks to answer questions such as: why is this happening, what if these trends continue, what will happen next (predict), and what is the best that can happen (prescribe). There is a growing view that prescribing outcomes is the ultimate role of analytics. To accomplish this, analytic initiatives need to leverage an insight-action-outcome framework that starts by defining outcome-enabling insight and ends with a focus on data provisioning.

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Big Data and New Business Models


This recent Big Data Article from the Mckinsey Global Institute focuses on three key themes – some or all of which will impact every company in the future.

  1. Big Data will increasingly form the foundation of competitive advantage for years to come.
  2. Big Data will drive new business models across every industry.
  3. Decision processes will forever be changed.

A company’s use of Big Data will increasingly be driven by competitive pressures from those that effectively leverage its insight. As these companies mature in their use of data, they will shift from competitive response to competitive advantage. Decisions will improve, driven by an ability to simulate and model various scenarios that enable optimal outcomes.

The really interesting aspect of Big Data – and the analytics that help us derive insight – is the potential impact on complete value chains. This article provides some good examples of this phenomenon at work. In essence, data will drive new business models. Members of a value chain that own data may have an ability to monetize it. Those that have a proven ability to deliver insight from this data can monetize a core competence. Some companies may find themselves driving revenue from a business model that was never envisioned.  

Whether it is new business models, better decisions, or enabled actions, the effective use of Big Data requires a level of analytic excellence that few companies have with any level of scale. This Mckinsey article echoes an earlier report that identifies a scarcity of analytic resources as a key obstacle to Big Data success. As I talk to companies about their digital strategies, I continue to focus on Big Data as the centerpiece of the strategy.