Digitally Speaking
In digital the spending between business innovation and digital platforms is balanced

Chris Gabriel
June 13, 2019

The world is awash with digital transformation excitement.

Digital is happening around us all day, every day, in the way we work, socialise, learn, purchase goods, entertain ourselves, live in our cities and receive treatment by the health service. And in large or small ways, digital is changing, augmenting or transforming the way things are done in every industry.

Some of those digital things delight us and we adopt them with speed and passion and never look back. And many of those digital things are foisted upon us and take a while for us to accept or enjoy our lives being digitised for us.

In digital the spending between business innovation and digital platforms is balanced

According to International Data Corporation (IDC), global DX (Digital) spending will reach $1.18trillion in 2019, an increase of 17.9% over 2018.  Over the next four years, an additional $4trillion will be spent by organisations on digital initiatives that they hope will give them a competitive edge or, in the case of government, better serve the needs of their population.

So, with just over £5trillion of investment in the next few years, where is all that money going?  IDC’s research paints a picture of the business and the CIO having shared responsibility to use this growing pot of money to drive digital transformation.

What’s getting the businesses investment? Spending in autonomous operations ($52billion), robotic manufacturing ($45billion), freight management ($41billion) and root cause technologies ($35billion) show that digital investments are systemically changing industries. Boards are clearly realising the potential of making the world a smarter, more efficient, more productive and more reliable place.

But, according to IDC, it’s the CIO who is being given the lion’s share of this investment pile, building and operating the underlying infrastructure that digital businesses will now rely on.

In fact, hardware and digital services to develop, integrate, and support digital will grab 75% of all digital spend in 2019.

Connectivity ($102billion), IT Services ($154billion) take 25% of all spending, and enterprise hardware from cloud infrastructure to enterprise servers, storage, and end devices will devour $253billion between them.

Adaptable and progressive – innovation will power the best digital platforms

If one thing jumps out at me from the IDC survey it is that the stuff being invested in by the business sounds a lot cooler than the connectivity, IT services and hardware that the CIO is building to support new digital business models.  It feels big on ideas and big on business impact. It feels full of AI and machine learning, autonomous and automation.  If you pardon an old man trying to sound cool – it sounds dope.

If the business stuff sounds transformational; the IT stuff sounds transactional.

But, while the names for the near 75% of digital foundations purchased by IT sound the same as they ever were (we have been buying connectivity and servers for decades), the new generation of platforms that will support digital initiatives are just as progressive as the autonomous, AI, predicative, smart machines and things that will rely on them.

Today’s networking engineer must be as familiar with automation as their autonomous factory colleague.  Today’s data centre server specialist must be adept at automating the provision of applications and their container services to any location as their AI enabled supply chain colleagues.  Today’s security specialist will be using more AI to secure their business than their colleagues developing the next intelligent health screening system.

And of course, in a world where DevOps is creating a flood of new digital applications, your networking, data centre, cloud or security engineer of the future will also be disruptive developers.

Cisco, the company that connected the world through the internet, has over 600,000 members of their development community DevNet; pushing the potential of digital platforms as much as any Apple or Android games developer community ever has on those funkier platforms.

And while IDC classifies lots of spending in hardware, today there is really no such thing as a hardware driven IT strategy.  The network switch, the physical server, the security appliance, are now hosts for software that is transforming once static IT hardware into a new generation of highly adaptable digital platforms.

We live in a world of Software Defined, where digital platforms can be integrated, automated, developed and adapted to the exact requirements of every part of the digital business model.  And of course, in the digital world it is crucial that they can.

If 75% of the investment companies are making into digital business models is being directed at the underpinning digital platforms, the pressure is on those platforms to support transformation over time.  In the old world, big technology platforms support static business models, and were complicated and slow to change.  In the digital world, in the application world, agile is everything.

That $800billion of investment must provide a perfect digital service in a changing world, from the first sensor or robot installed in the autonomous factory, or connected asset, or intelligent building to the last.  There is no room for the status quo in the digital world; change is a given.

So, CIO’s will use their money wisely and become the hotbed for progressive digital platforms that will ensure that £1.18trillion delivers maximum economic return for the organisations and the society that will be transformed not overnight, but over time.

 

Category: Hybrid IT

Chris Gabriel
May 17, 2019

Why Higher Education CIOs have to manage exceptional expectations through adaptable investments.

Imagine being an IT Leader working for a firm that replaced 25% of its workforce every year with new employees who were paying you to come to work and who were of a demographic that demanded the very best in technology services, then being surveyed constantly with the results published to the world about how well you met their expectations.  Not a job you would imagine a queue around the corner for.

Of course, that isn’t the description most Universities publish when looking for a CIO, but, that is the challenge of expectation that comes with this unique role in IT.

It is difficult to think of a more demanding role.

Now factor in that you are helping run a large complex campus that serves tens of thousands of students, hundreds of academics, research environments and in many cases private sector business users doing cutting edge research projects.  An environment that comprises tens if not hundreds of buildings.  A transport hub.  Retailers.  A place of learning, life and entertainment.  Where people expect to be kept safe and secure.  Sounds exciting. Tempted?

Well, what if you had to do all of that for the price of a latte per user per day?

CV in the post is it?

Getting more from less – theory v reality

In an age of growing transparency, Universities are ever more encouraged and regulated to publish a breakdown of how the £9600 per year student fee is spent.  How much on teaching, buildings, admin, research, and, of course IT.  The Office for Students, the sectors new financial regulator, and others, including the Minster of State, are creating a reporting environment that is giving students ever more detailed access to how their fees are spent, linked to the concept of value for money.

In a report published in November 2018 by the Higher Education Policy Institute[1], and one that garnered many negative headlines in national news media[2], this independent policy think tank published analysis of several leading institutions spending habits of their students hard found fees.

Any prospective CIO would likely look at the reality of their budget prospects and run a mile.

Investments in IT services varied across the report, but spending ranged from a low of £520 and averaged at around £580 per share of student annual fees.  Now in percentage terms that’s 5% at the lowest spend with some institutions investing up to 9% in technology services. Sounds generous.

But, if you break that down by the number of days a student spends on campus you have the grand total of around £2.36 per day, per student, to run IT services.  We aren’t even in large latte territory.  CIOs are delivering IT services for the price of a flat white.

When you break the numbers down, the reality of running one of the world’s toughest IT gigs on a budget that expects you to deliver not just world-class services but exceptional experiences that differentiate your institution against your competitors is daunting to say the least.

The CIO wishlist

So, is it any wonder why this year’s UCISA* conference was a hot bed of discussion on topics such as automation, adaptable digital platforms, data driven decision making and the priority of demonstrating that IT investments can benefit every aspect of campus life such as student safety and security?

CIOs came with an appetite to discuss and drive change in how what they and their team do can better impact a range of outcomes; so, what was on their hot list of topics?

  • Automation of major IT platforms to reduce the cost of operations, shifting resources to experiential roles rather than traditional IT service admin.
  • IT platform investments adapting to longer term requirements; using the latest in software defined automation and innovations such API platform development to better integrate investments.
  • Building better strategic platform roadmaps so investments shift from being depreciating assets to ones that demonstrate increasing value over time.
  • Platforms such as the digital network becoming multifunction investments; not just supporting students and their devices, but playing a role in the connected campus, IoT and student safety.
  • Data as a key decision-making tool for the CIO and the right data being made available to all stakeholders across their institution; but not in backward looking reports, for real-time decision making.
  • Governance and control of resources is now key; the rush to the cloud for desktops has been followed by major application workloads, but the CIO is now looking to put controls and governance in place to ensure the cloud doesn’t become a cost or a risk.

Lessons to be learnt

The key to this major feat of investment sleight of hand must be adaptability.  No longer can a network, or data centre, security investment or data source become an asset that stays stagnant to only perform the job it was initially designed for.  Nothing can be left to depreciate – because the network bought this year is serving a new cohort of students next year.  And it is expected to support IoT campus security in three years.  A data centre platform this year must extend to the cloud next year as applications and data can be shifted to the most cost-effective location.

IT operations cannot stand still either; automation that is impacting every industry must be embraced in full to prove that human resources are being used as the truly valuable resources they are in delivering high-value experiences, and software and automation takes the strain of repetition.

And of course, at UCISA whilst the CIO was looking for ‘technology life hacks’ to show that the money they are being trusted with delivers increasing value, they are also looking for partners who are able to shift their focus to more value-driven relationships.

They don’t want partners who just look at how much budget there is to spend on a major tech re-fresh, but a partner who demonstrates that an in investment can deliver accentuated value over time.

The world of the CIO in Higher Education must be one of the most exciting roles in the industry; and by partnering in a different way we can shift the focus on how much money is being spent on IT services – stop the headlines castigating institutions for investing in anything but teaching – and show that the CIO and their partners are focused on turning the money we are entrusted with is continually delivering differentiated experiences for every University stakeholder.

If we can do all of that for the price of a flat white, then the drinks are definitely on us.

 

 

* UCISA is the member-led professional body for digital practitioners within education.

[1] https://www.hepi.ac.uk/2018/11/22/new-report-calls-universities-tell-students-fees-go-new-figures-reveal-half-fee-income-goes-teaching-rest-also-benefits-students/

[2] https://www.theguardian.com/education/2018/nov/22/less-than-half of-tuition-fees-spent-on-teaching-at-english-universities

Category: SDN / Mobility

Fork in the road

Chris Gabriel
April 11, 2019

A recent report featured in TechRepublic claimed that 41% of business leaders thought their ‘digital transformation programme’ had been a waste of time and money.

Reasons for this near 50% failure rate in delivering on business expectations were varied, from a lack of engagement with front line colleagues (63%) to a lack of engagement with business analysts (39%), and strikingly 79% of executives saying they had failed to analyse existing business processes and assess where improvements could be made before striking out on transformation.

Given those responses, it wasn’t a surprise to find that 42% of senior business leaders had no idea where to start in finding areas of their business where some sort of digital intervention could deliver improvements.

On the face of it, it all sounds a bit of muddle, and clearly, this article points out some rather obvious gotchas.

Never start a major investment without a clear reason for doing so

Unlike in the old-world (BD – Before Digital), the challenge today is there is always a moving end-goal that organisations will only ever get to in stages. Digital is not an overnight sensation.  Digital takes time and time is an organisations biggest advantage and greatest enemy.

Imagine being a UK bank that announced a major branch opening program in the heady days of 2006?  Within a year or two the economic crash, change in customer behavior and the launch of the iPhone meant that online and mobile banking would become the norm.   That first banking app was pretty basic.  Now you can transfer money to friends on the fly, pay for a coffee through tap payments, and save the change from a transaction to an investment account.  But that took 10 years to develop; and who could have guessed right back then how mobile banking would pan out?

I have some sympathy with those executives who do not know where to start or feel they have wasted time and money because their first attempts to ‘go digital’ have not returned all they expected.

But, being sympathetic is cold comfort to those embarking for the first or second time on a delivering some new business outcomes through digital investments.

So, when the CEO, CFO, COO and CIO sit down around a table and discuss digital and ponder the time it may take or the destination they may reach, I think there is a key word they should all keep in mind, and that is adaptability.

As a famous US general once said, there are known knowns, known unknowns, and unknown unknowns. The best thing you can do is assume that during a transformation initiative they will all happen, so try to plan accordingly.

Think adaptability as your new value proposition back to your business

Build adaptable operational models, adaptable platforms, and a new set of skills that can adapt what you invest in not only to the immediate business need, but also to the changes that will inevitably come over time.

Application developers have been agile and scrumming for a while now; that’s how that banking app keeps on adapting to changing consumer behavior and industry changes. So, let’s scrum down on platforms as much as we do on the applications that use them.

Cloud is a great example (or should be) of creating adaptable into the model.

Remember when the rule was no cloud, but the business moved CRM there anyway? When owning the largest data center in your sector was a badge of honor?   Adaptable IT Departments now use cloud services as adaptable resources, consuming services as they make sense to their business, and ensuring they can wrap security, governance, integration, cost control and workload mobility around those services.  Now they are seamlessly connecting their internal compute and storage resources to public cloud services, so they can adapt workloads to the most appropriate location and maintain full governance and control.

Remember when you bought a firewall and you were told to a) put some rules in to protect your business and b) never ever touch the thing again without a 3-month sign off process from the business.  In the world of static threats that was sensible model. But in a world of social change, hyper-connectivity and mobile working, and a changing threat landscape, the smart CISO is building an adaptable intelligent security operating model that protects their organisation far more effectively than the static firewall ever could and delivers on the flexibility the business demands.

If the digital initiative happens to be IoT the network must be ready to adapt many times over; in fact, it will never stop.  That very first POC of a connected home to deliver health and social care in the NHS will likely involve 1 central location and 10 homes, but will if successful soon be 100, 1000, or 10,000 homes and is going to need a network that can adapt quickly and securely.

So, to those business leaders who are starting out on the digital journey, do your homework, gather your evidence, engage with your people, and get into those business processes to ensure you know why you are starting.  But, don’t be concerned if you cannot pick the day and time of the first benefits accurately, or if you have to change course as new evidence appears and fresh opportunities present themselves.

Adaptability is your friend; you have time on your side.

Category: News

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