The Changing Role of the CIO Roger Ling Associate Research Director, IDC ASEAN The IT Industry's 3rd Platform for Innovation and Growth •  This movement of IT beyond traditional boundaries of datacenters and IT departments is the most dramatic aspect of the 3rd Platform. •  The end-goal is nothing less than the reinvention and continuous transformation of every industry on the planet. Source: IDC, 2014 Why do we care about the 3rd Platform? Innovation Accelerators Transforming Healthcare • Reduce movement related injuries • Reduce manpower by 50% Source: Media report, 2014 4 Innovation Accelerators Transforming Healthcare • Awareness driven by Social Media • Philippines looking to 3D print trachea Source: Media report, 2015 5 Innovation Accelerators Transforming Transport • Out-‐perform a skilled racing driver • Algorithm will set fundamentals on how to drive under extreme condiFons improving safety Source: Media report, 2015 6 Innovation Accelerators Transforming Construction • Takes a day to print a level • Used recycled construcFon waste • Save between 30 and 60 percent on building materials with costs slashed by 50 percent up to 80 percent • Shorten producFon Fme by 50 to 70 percent Source: Media report, 2015 7 Innovation Accelerators Transforming Retail • Closes the gap between online to oﬄine • SFll under trial for selected customers • Local restricFons sFll apply Source: Media report, 2015 8 CIO Role Permanently Aligned to Business 9 By 2016, over 70% of CIOs will move to become Value Partner to business 10 DeﬁniFon of acceptable IT risk will change 11 EﬀecFve IT management of people and process 12 Most Appealing New Enterprise Tech 6 2 4 1 7 Digital signage and smart TV/monitors Software-defined data center Integrated and converged infrastructure Machine to machine 5 3 42 Open source cloud Software-defined networking and storage 8 Industrial Internet of Things Wearable Internet of Things Source: IDC Asia/Paciﬁc C-‐suite Barometer 2014 (N=483 CIO, 563 CEO/LoB); N=483 CIO, 563 CEO/LoB) 13 Enterprise business mobility will require 60% of CIOs by 2017 to support an agile architecture with a diverse mix of cloudbased interfaces for legacy and nextgeneration mobile applications. © IDC Visit us at IDC.com and follow us on Twitter: @IDC 14 New Imperatives of the 3rd Platform Unilever Nestle The Unilever Foundry: Crowdsourcing iniFaFve to pitch your technology and potenFally pilot with Unilever Created a 24/7 monitoring centre to listen to all of the conversaFons about the company and its products on social media. L'Oréal Paris has launched a 'Make-‐up Genius' app to allow customers to see how make-‐up will look on their face before buying it. Operational excellence will be a competitive necessity Innovation is no longer an invention, innovation now implies industry and commerce Disruption will be a competitive advantage L'Oréal 15 IT Spending Distribution on 2nd and 3rd Platform APeJ ICT spend (US$B) 2nd Platform 735 (36%) 802 871 953 3rd Platform 1161 1053 1200 793 1241 (64%) 559 672 730 264 329 393 467 471 473 478 486 494 489 470 449 2013 2014 2015 2016 2017 2018 2019 2020 CAGR 2013-20 17.0% -0.7% Source: : AP Black Book vQ3 2014 16 Philippines IT Spending Keeping Its Momentum Billions Philippine IT Spending (USD) Top 4 Factors for 2015 Growth 8 7 6 5 11.2% growth 4 10.1% growth Telecom Equipment IT Services 3 2 1 0 4.4 4.8 6.0 6.7 7.3 2011 2012 2013 2014 2015 IT Spending Packaged Sodware Storage 17 Source: IDC Worldwide Black Book v.3, 2014 Technology Flood…. A Reality q  US$ 7.3 Billion IT Spending Market is skewed towards Hardware (74%) q  Current focus on IT Spending is relatively traditional in nature (2nd Platform) with either a focus on Technology/Product or “Keeping the Light’s on” q  The move from Services led engagements to Consultative led engagements is still nascent limiting the 3rd platform push q  Smartphones and Tablets will make up 41% of the 2015 IT Spend, and 45% by 2018 q  A 5 year forecast only sees IT Services increasing in contribution by 3.5% of the total IT Spending Market 58% of CIO’s plan to use IT more aggressively in order to meet business objecWves Source: IDC Worldwide Black Book v.3, 2014, 2014 ConFnuum Survey 18 The CIO Paradox •  •  •  •  •  •  •  Be a visionary but a pragmatist Be a strategist and an operational player Be an investor for the future, but a cost cutter for today Be a technology visionary, but a custodian of the legacy environment Simplify, but manage increased complexity driven by customization and personalization Move fast, but plan large project implementations carefully Everybody loves technology, but few like IT outside of IT Source: IT Strategy and Innovation: The "Six I's" of the New CIO Role 19 Sink or Swim, the CIO Journey 1st Platform 2nd Platform 3rd Platform Stakeholder relationship •  Subordinate •  Support the Business •  Partner •  Enable the business •  Peer •  Power the business Impact •  Functional •  Transformational •  Strategic Power •  Credible •  Trusted •  Influential •  Game Changer Orientation •  Technology domain •  Enterprise •  External IT Team •  Systems •  Process •  Business Source: IT Strategy and Innovation: The "Six I's" of the New CIO Role 20 IT Driving Business Innovation Maintain • InnovaFon to keep up Increment • InnovaFon to improve slowly and steadily Change • InnovaFon to introduce something new Transform • InnovaFon to radically alter Invent • InnovaFon to create Source: IDC Strategy and Innovation: The Role of IT in Business Innovation, IT Strategy and Innovation: The "Six I's" of the New CIO Role 21 Prediction #2: The new beginning of IT Many enterprises are challenged by: •  Slashed IT budgets •  Increased scrutiny of IT spending •  Increased demands on IT 60% of enterprises in 2015 will structure IT into core vs. LoB IT Tech buyers in 2015 Job#1: Governance 1.  Centralization 2.  Policy and compliance framework 3.  BU/user security certification 4.  Risk appetite assessment and benchmark • LOB IT will be predominately focused on service innovation and business agility • Core IT function will be responsible for common service elements used across various LOBs Job#2: Innovation 1.  Vision/framework 2.  LoB IT partnership 3.  Partner co-innovation platform 4.  Innovation investment scorecard Source: IDC CxO conversations, 2014 CIO IT operations and sourcing Source: IDC Asia/Pacific Top 10 ICT Predictions 2015 - AP#250840; APJ data 22 Culture Within IT that Drives Innovation • Advise LOBs on how best to deliver business outcomes using technology soluWons • Develop and implement transformaWonal road maps for the LOBs • Manage the complex enterprise workplace as well as the associated risks while LOBs focus on external compeWWon. Source: IDC CxO conversations, 2014 23 Roger Ling rling@idc.com hhp://www.asean.idc.asia Job#1: The governance strategist Maturing markets Emerging markets •  •  •  •  •  IT centralization Cross-entity growth driver LoB security certification LoB tech requirements IT as a strategy management investment •  Core vs. LoB IT transformation •  LoB security certification •  Growing requirements on SoC •  Data governance and customer privacy act compliance a priority Mature markets •  Strategic architecture and governance is key •  Compliance is a strategic investment •  Governance + innovation go hand in hand Source: IDC CxO conversations, 2014 26 Job#2: The innovation officer Emerging markets •  75% on governance and 25% on innovation •  Incremental-based innovations •  AEC (for ASEAN) and competitive disruption are leading change agents Maturing markets •  60% on governance and 40% on innovation •  Incremental-based innovations •  Customer-facing IT will be a key investment area •  A growing “fail-fast” mindset Mature markets •  35% on governance and 65% on innovation •  Greater ownership on business-outcome innovations from IT •  Accelerating exploration of new tech (eg. IoT) Source: IDC CxO conversations, 2014 27