High performer organisations and their digital head start

Stuart Lauchlan Profile picture for user slauchlan November 13, 2013
Summary:
Over the course of the four rounds of Accenture’s High Performance it research, there are three trends that continue unchanged: across the board, the gap between high performers and the rest remains wide; the CIO’s relationship with the rest of the C-suite is vitally important for their success; and, as technology becomes more central to businesses, the it and business agenda becomes one and the same.

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An interesting chat this week with Daniel Benton, who’s Global Lead for IT Strategy and Transformation at Accenture around the firm’s latest High Performers in IT research report*.

This one has the sub-heading of Defined By Digital - which might at first lead the unwary to assume this is just the latest in the ever-increasing flood of reports from big systems integrators and consultancies positioning themselves as digital domain experts as their preferred 2014 incarnation.

Two things make this one stand however. Firstly, as we’ve written about a fair bit over the past few months, Accenture has some serious skin in the digital transformation space and some highly legitimate claims to make for just such domain expertise.

Secondly, this is the fourth such report - the others run over an extended period in 2005, 2008 and 2010 - so there’s a real opportunity to compare and contrast and track how attitudes have evolved over that time.

The report states:

Over the course of the four rounds of Accenture’s High Performance it research, there are three trends that continue unchanged: across the board, the gap between high performers and the rest remains wide; the CIO’s relationship with the rest of the C-suite is vitally important for their success; and, as technology becomes more central to businesses, the it and business agenda becomes one and the same.

Benton told me:

“The thing that’s interesting in this research is that all the stuff we’ve been saying CIOs need to be good at for years is particularly important as stuff that will help them in the digital space.

“Two things are particularly important in that digital space: agility and innovation.

“The successful CIO is one who is dynamic and responsive to the business agenda and who can work in a more collaborative way while the whole area of IT innovation is an opportunity for the CIO to own.”

Speculate, accumulate

One enduring trend that comes from a comparison of all four reports is that those firms that kept on investing over the years are now the ones best placed to succeed in the digital economy as high performers.

You do indeed need to speculate to accumulate, seems to be the conclusion.

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Accenture’s report finds that high performer organisations:
  • allocate 55% of IT budgets to delivering strategic capabilities that support growth and business performance compared to the 37% spent by rivals.
  • 50% more businesses that are judged to excel in their use of IT, look beyond what Accenture calls “a narrow IT lens” to consider broader business implications and social, economic and geopolitical factors as part of their strategy and planning.

Other key findings include the importance of investment in the SMAC stack - social, mobile, analytics and cloud.

In mobile, 60% of high performer organisations are committed to enabling customers to use mobile transactions while 54% have deployed a mobile-enterprise app store versus only 22% of other organizations.

Meanwhile one-third of high performer organizations are replacing legacy infrastructure components with private and public cloud alternatives while almost one in six (15%) already centrally manage a fully virtualised, dynamically provisioned hybrid infrastructure.

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Hybrid cloud  is set to become the prevailing model. Nearly 60% of applications will still use a traditional license model by 2020, reckons the Accenture data.

The report notes:

Hybrid cloud is not just a steppingstone; it is integral to the future state of it organizations.

The research shows that high performers will expand their cloud footprint faster than other organizations by migrating a larger proportion of their workloads to private clouds by 2015 and increasingly to the public cloud by 2020.

They also expect that a substantial part of their iT footprint—whether infrastructure, middleware, or applications—will remain “traditional,” both hosted and on-premise.

The challenge now is to manage provisioning and integration between private and public clouds, coupled with a hosted and on-premise architecture in a secured and standardized way.

High performers have a head start, warns Accenture:

More than one- quarter (27%) are now fully committed to using external cloud-based services that align with their business needs, and almost one in six (15%) already centrally manages a fully virtualized and dynamically provisioned infrastructure across multiple platforms.

If other organizations are behind in this endeavour today (only 1% are there), 40% intend to centrally manage a dynamically provisioned infrastructure in the future—but will they catch up to the high performers’ lead?

For those who have made the commitment,  cloud investment is paying off:

  • 40% see measurable improvements in IT agility, with only 9% of other organisations claiming the same.
  • 43% report strong results in aligning between project portfolios and IT business goals, a 23% advantage over other organisations.
  • 33% see direct cost reductions as a result of their cloud investments while only 14% of other organisations see similar results.

CDO v CIO

But what of the Chief Digital Officer role? Does that need to be on the mainstream agenda? And if so, what’s the implication for the CIO’s future role?

Benton's view is:

“A lot of CIOs are under attack at the moment. Some people are getting this right. Gartner talks about the Chief Digital Officer. What we’re talking about is someone who joins the business and the technology agendas together in a tighter way than ever before.

“If the CIO steps forward, he or she can do this. A lot of commercial organisations have the CIO driving the digital agenda. But if the CIO doesn’t step up, then it will be someone else, such as the CMO.

“The important thing is the agenda, not who owns it. But for CIOs, if it’s not going to be you, then it’s not clear what your job is.”

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But it’s all about that fabled coming together of business and IT yet again. Plus ca change etc but it needs to be approached in a very different way than previous shifts:

“Those who are old enough to remember the internet dot com boom will recall that every CEO thought that they needed to have an e-business and so they would start up a bolt-on business with an e on the front of it.

“Digital is far more profound than that. Digital has become core to the business agenda.”

*Accenture’s High Performance IT polled senior IT executives in 202 of the world’s largest private and public sector organizations across 44 countries. For the survey, Accenture used more than 150 proprietary indicators of high performance in managing it, across eight it capabilities to shed light on the differences between CIO assessments of how their IT is performing today and how they aspire it to perform in the future.

Graphics: Accenture

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