Taming the Digital Dragon

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1 Taming the Digital Dragon Evan Zeng Research Director Data Center & Cloud Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."

2 We Are Entering a Third Era of Enterprise IT We are here IT Craftsmanship IT Industrialization Digitalization ADAPT IDEATE MONETIZE CREATE OFFER ENGAGE Focus Technology Processes Business models Capabilities Programming, system management IT management, service management Digital leadership Engagement Isolated, disengaged internally and externally Treat colleagues as customers, unengaged with external customers Treat colleagues as partners, engage external customers Outputs and Outcomes Sporadic automation and innovation, frequent issues Services and solutions, efficiency and effectiveness Digital business innovation, new types of value

3 Taming the Digital Dragon Create powerful digital leadership Renovate the core of IT Build bimodal capability

4 The Chief Digital Officer Role is On the Rise "If the CEO asks 'Who is in charge of digital?' and gets multiple responses, then there is no digital leadership." Baron Concors, CIO of Yum Restaurants International, former CIO and CDO of Pizza Hut North America: 5% EMEA: 6% Latin America: 7% APAC: 11% Industry %CDOs Media 21% Communications 13% Services 11% Banking 10% Insurance 9% Retail 9% Healthcare Providers 5% Government 5% Manufacturing & Natural Resources 5% Wholesale Trade 3% Education 3% Transportation 4% Utilities 1% "For the CIO, there is a strong opportunity, and also a responsibility, to be part of this new digital game. However the organizational model plays out, there will be a strong push for the digital future." Gianni Leone, CIO and CDO, Miroglio Group Gartner predicts a tripling of the CDO role by Gartner predicts by 2020 most CDOs will have fulfilled their roles and will no longer exist.

5 Taming the Digital Dragon Create powerful digital leadership Renovate the core of IT Build bimodal capability

6 Technology Priorities Represent Two Complementary Goals Renovate the Core Ranking Based on How Many CIOs Cited Each as a Top Three New Spending Priority for 2014 BI/Analytics 1 Infrastructure & Datacenter 2 Mobile 3 ERP 4 Cloud 5 Networking, Voice & Data Comms. 6 Digitalization/Digital Marketing 7 Security 8 Industry-Specific Applications 9 Customer Relationship Management 10 Legacy Modernization 11 Collaboration 12 Exploit the New

7 Technology Priorities of 2014 CIO Survey APAC Top 10 Technology Priorities 2014 Continent= APAC, 11 Countries CLOUD 1 MOBILE 2 BI/ANALYTICS 3 ERP 4 INFRASTRUCTURE & DATACENTER 5 DIGITALIZATION/DIGITAL MKTG 6 NETWORKING, VOICE AND DATA COMMS 7 INDUSTRY SPECIFIC APPLICATIONS 8 SECURITY 9 LEGACY MODERNIZATION 10 Global Top 10 Technology Priorities 2014 All CIOs BI/ANALYTICS 1 INFRASTRUCTURE & DATACENTER 2 MOBILE 3 ERP 4 CLOUD 5 NETWORKING, VOICE AND DATA COMMS 6 DIGITALIZATION/DIGITAL MKTG 7 SECURITY 8 INDUSTRY SPECIFIC APPLICATIONS 9 CUSTOMER RELATIONSHIP MANAGEMENT 10 Global 2,339 CIOs, 77 Countries, $300 Billion of IT spending APAC- 398 CIOs

8 Renovate the Core Increased Adoption of Public and Private IaaS, PaaS, SaaS, BPaaS Postmodern ERP/Apps More Federated ERP, Multienterprise, Cloud Components, Mobile Support, Embedded Analytics More Federated ERP, Multienterprise, Cloud Components, Mobile Support, Embedded Analytics Volume/Velocity/Variety; In-memory; Advanced Analytics Next-generation Information Capabilities Hybrid Cloud More Diverse Partnerships Use of SMBs/ Startups; New Categories of Partners, E.g., Mobile, Design, Analytics

9 Hybrid Infrastructure and Services Management Life Cycle Message: The Changing Needs of Infrastructure Architecture Infrastructure Changes Fabric Base Infrastructure: Pooling Shared Virtual Infrastructure resources, Fabric Resources Pool Management Cloud Management Platform: self-services portal, services catalog, cloud orchestration, services governor, etc

10 Taming the Digital Dragon Create powerful digital leadership Renovate the core of IT Build bimodal capability

11 Bimodal IT Offers a Way to Get Unstuck Waterfall development Known vendors Strong governance Minimized risk Technology teams Traditional Mode When speed or innovation is needed, or there is a high degree of uncertainty Stuck in the middle "Fit for no one" Agile dev. Small/ Innovative partners Lightweight "Just good enough" governance Managed risk Multidisciplinary teams Nonlinear Mode "The reality is that you do have to operate at two speeds, and some of that you do by creating dedicated teams for each. Focusing on the big systems, making them run smooth, while at the same time having disrupters to innovate, together with marketing and the customer, exploiting digital." Willem Eelman, Global CIO, Unilever Mythbuster: Nonlinear need not be limited to where speed is needed, for experiments, or for non-mission-critical initiatives.

12 Case Study: Large Enterprise Rearchitects for Hybrid Cloud Computing Scope Thirteen data centers with one data center devoted to development/testing of new cloud management and infrastructure releases 3 PB storage, 20,000+ VMs provisioned, adding hundreds each week IaaS + software/paas/saas; development/testing and production Design principals: Phase project for incremental return (started with dev/test, moved to dynamic workload/runtime optimization, next up: elasticity). Charge customers for usage. Enable diverse (and competitive) infrastructure suppliers; no lock-in. Host 80%+ of servers within the private cloud with no local storage and repurpose via reboot, with an aggressive push to convert to stateless. Critical success factors: Deep development and architecture skills in IT I&O Integrating tools from many suppliers Results: Significant reduction in cost of service delivery and speed to provision.

13 Taming the Digital Dragon Evan Zeng Research Director Data Center & Cloud Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."

14 We Need a Three-part Response to Tame the Digital Dragon IT Industrialization Digitalization Clear digital roles Savvy digital executives Digital vision and digital legacy Create powerful digital leadership Agile development Multidisciplinary teams Innovative partnerships New risk/speed trade-offs Cloud/Web-scale infrastructure Information Talent Sourcing Renovate the core of IT Build bimodal capability

15 The CIO Golden Rule for Building a Bimodal IT Organization I. Be clear and create principles of what goes into conventional IT, and what goes into nonlinear. Default criteria: Need for speed, need to innovate, high levels of uncertainty. II. III. IV. Design all components to form a consistent nonlinear environment: Structure, staffing, sourcing, governance, metrics, tools. Apply lightweight architectural governance to ensure that nonlinear mode initiatives don't make a mess, but governance shouldn't be too heavy/slow. Provide sufficient focus on the ability to refactor/industrialize nonlinear mode into conventional mode IT, and to unleash conventional systems into the nonlinear world when the need arises. V. Consider skills and cultural aptitude (e.g., neophilia, tolerance for risk/uncertainty) in staffing the nonlinear mode organization. VI. VII. VIII. IX. Be brave about the need for new people/skills/culture in nonlinear; don't set yourself up for failure with the wrong people. Don't use placement in the nonlinear mode organization as a reward for your best staff; they may not be a cultural fit. Manage communications so that conventional and nonlinear mode IT are seen as important and exciting places to work. Manage the cultural distance of the nonlinear mode team from the core of the company not too near, not too far.

16 BBVA Bank- A Sophisticated Multicloud Vision

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