Digital Intelligence Briefing - Adobe Inc....new technology, cited as a top-three challenge by 45% of respondents, up from 41% last year. › Respondents at larger companies are very

2018 Digital Trends in IT

DigitalIntelligenceBriefing

Digital Intelligence Briefing: 2018 Digital Trends in IT2

Digital Intelligence Briefing: 2018 Digital Trends in IT

1. Foreword by Adobe......................................................................

2. Executive summary ....................................................................

3. The need for scalable, enterprise digital experience platforms ........................................................................................

4. The internal focus: digital transformation and workflows .......................................................................................

5. Managing the existential threat… and embracing the opportunities ................................................................................

6. Actionable tips to help future-proof your IT function ...

7. Appendix: respondent profiles ...............................................

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Digital Intelligence Briefing: 2018 Digital Trends in IT 3

This is the second year running that we have produced an IT-focused edition of the Digital Trends report in partnership with Econsultancy, focusing on the challenges and opportunities that are shaping the role of the modern-day CIO and CTO.

The IT department continues to be at the forefront of initiatives by companies to put customers at the heart of their operations, with the need for an integrated experience increasingly being seen as an essential commercial requirement.

A new version of this report gives us a great opportunity to look at how the priorities and headaches for IT executives have changed in emphasis over the past year. The challenge of integrating legacy systems with new technology is now seen as the most significant obstacle to driving digital transformation.

But while this is an ongoing challenge, it is also clear that companies remain committed to creating digital platforms that can scale and meet increasingly complex requirements. It is encouraging to see that an extensible digital platform is now the number-one priority for enterprise companies.

Our research shows that companies are right to focus on their technology infrastructure. An important takeaway from the main 2018 Digital Trends report is that, in the context of marketing and customer experience solutions, the best-performing companies are significantly more likely than their less successful peers to have invested in an integrated, cloud-based technology stack.

Over the last few years we have observed that many companies have ended up with fragmented point solutions to manage areas such as web content management, digital communications and analytics, resulting in a decreased ability to provide the best possible experience based on a single view of the customer.

Here at Adobe we are passionate in our belief that commercial success is inextricably linked with being able to connect with your customers in a consistent way across every device. If you can create seamless and amazing experiences, you’ll build lasting customer loyalty.

We hope this report provides you with some insightful data points and analysis which will be useful to you individually and to your organisation, whether small or large.

Foreword by AdobeCynthia Stoddard SVP & CIO Adobe


Executive summary

IT executives preoccupied by need to keep up with customer expectations

› The high proportion (39%) of IT respondents that cite keeping up with changing customer expectations and behaviour as one of their top external challenges demonstrates the increased customer centricity of a new breed of CIO.

› IT executives at larger organisations – those with more than £150m in annual sales – are particularly conscious of the challenges that come with doing business in the age of the customer, citing this as their biggest external challenge. They are significantly more likely than their peers at smaller organisations to be ‘kept awake at night’ thinking about meeting customer expectations (48% versus 40%).

Security is still the biggest headache for IT professionals

› As was the case last year, security is the main preoccupation for IT executives in terms of external threats, with respondents most likely to cite the threat of security breaches and cyber-risk threats as a challenge (42% compared to 41% in 2017).

› Security of business and customer data (44%) is also the top priority for the year ahead, ahead of the implementation of extensible digital platforms (43%) and improving digital workflows (38%).

Legacy systems are the greatest obstacle to digital transformation

› The most significant in-company barrier to driving digital transformation is the integration of legacy systems with new technology, cited as a top-three challenge by 45% of respondents, up from 41% last year.

› Respondents at larger companies are very much preoccupied by three key internal challenges, namely departmental silos / bureaucratic processes (60%), difficulties integrating legacy systems with new tools/ technologies (55%) and lack of shared vision as to what digital transformation means (52%). For smaller companies, the pain appears to be more evenly spread across the full spectrum of headaches that can hinder digital transformation.

Enterprise CIOs identify requirement for extensible digital platforms

› Extensible digital platforms are the top priority for IT executives at larger organisations, with well over half (57%) ranking this as a top-three priority for 2018. This compares to 42% for security of data, and the same percentage for joining up data to achieve a single view of the customer.

› An integrated and scalable technology platform for marketing and customer experience – incorporating digital communications and state-of-the-art content management – is becoming a hygiene factor for businesses that want to compete in a world where the customer’s expectation for personalised and relevant communications across different touchpoints and channels is greater than ever.

The 2018 Digital Trends in IT report is based on a sample of almost 400 senior IT leaders (manager level or above1) who were among around 13,000 digital professionals taking part in the annual Digital Trends survey carried out at the end of 2017 and start of 2018.

The research, conducted by Econsultancy in partnership with Adobe, explores the digitally-driven opportunities and challenges facing organisations from the perspective of IT professionals, looking at both internal business factors and external technological and consumer trends.

1. The 371 IT respondents who took part in the 2018 Digital Trends survey were among a total of nearly 13,000 marketing, creative and technology professionals in the digital industry from all sectors who participated, from countries across EMEA, North America and Asia Pacific.


Companies struggle to master workflow capabilities

› Fewer organisations than last year are taking a range of initiatives to improve workflows against the backdrop of tighter security and compliance requirements that companies are typically working towards. Just under half (48%) of respondents say they are switching to paperless, digital end-to-end workflows, compared to exactly half last year.

› The proportion of companies moving an increasing portion of [the] technology stack to integrated cloud solutions has jumped from 36% to 40%. While process and technology play a pivotal role in supporting digital transformation initiatives, there are other capabilities that need to be working in harmony in order to effect significant and positive digital change.

› In respect of data, there has been a marginal increase in the proportion of IT professionals that believe they ‘have access to and control of user data’. However, in all other areas – including culture, skills and strategy – there has been a decline in the proportion of companies that believe they have the required capabilities.

IT executives focus on real-time personalised experiences, AI and the Internet of Things as exciting opportunities

› IT professionals are most likely to see the delivery of personalised experiences in real time as the most exciting prospect in three years’ time, ahead of other technological innovations such as the Internet of Things, artificial intelligence, virtual or augmented reality, voice interfaces and payment technologies.

› IT executives at larger companies are more focused on AI than their counterparts at smaller organisations. They are almost twice as likely as peers at smaller organisations to cite utilising artificial intelligence / bots to drive campaigns and experience as an exciting prospect (27% versus 14%).

› IT executives are almost twice as likely as decision-makers working outside IT to see IoT as the most exciting prospect (20%, compared to 11% of non-IT respondents).

FIGURE 1: WHICH THREE PRIORITIES ARE KEY TO THE SUCCESS OF YOUR ORGANISATION IN 2018?

6%

20%

20%

25%

27%

32%

38%

43%

44%

None of the above

Digital training programmes for employees

Utilising arti�cial intelligence / bots to improvecustomer experience or work�ows

Ensuring the right skills are in placee.g. digital analytics talent

Joining up data to achieve a single view of the customer

Facilitating mobile working by optimisingthe mobile experience

Improving digital work�owse.g. via cloud-based tools

Implementing an extensible digital platformfor experience delivery

Security of business and customer data

Respondents: 264Methodology note: Trending information comparing 2018 and 2017 data is not provided because this year’s list of priorities has been significantly updated.


Figure 1 provides a snapshot of organisational priorities for the year ahead through the lens of information technology professionals. It is no surprise to see that security of business and customer data (44%) is the top priority for the year ahead, given the ongoing importance of guarding against the kind of malicious activities that continue to inflict severe commercial damage on organisations across a range of sectors.

On the same theme, as we shall see later in the report (Section 5), the threat of security breaches and cyber-risk threats is cited as the challenge most likely to be keeping IT professionals awake at night. Throughout 2018 and beyond, security will continue to be top-of-mind for Chief Information Officers (CIOs) and Chief Technology Officers (CTOs), as they strive to ensure that information assets and technology are adequately protected from malevolent forces.

For many companies, responsibility for protection will fall to a dedicated Chief Information Security Officer, or CISO, an acronym that has dryly been referred to by some as ‘Career is Seriously Over’ for those who see this role as a poisoned chalice2. As seen in Figure 1, the second and third highest priorities are implementing an extensible digital platform for experience delivery (43%) and improving digital workflows e.g. via cloud-based tools (38%). The subject of workflows will be covered in more detail in the next section of the report.

3. The need for scalable, enterprise digital experience platforms

2. https://www.forbes.com/sites/forbestechcouncil/2018/01/09/the-evolving-role-of-the-cio-in-2018

Security of business and customer data is the top priority for information technology professionals in 2018.

FIGURE 2: WHICH THREE PRIORITIES ARE KEY TO THE SUCCESS OF YOUR ORGANISATION IN 2018? (BY COMPANY SIZE)

5%

28%

18%

25%

34%

43%

24%

46%

37%

3%

10%

25%

28%

30%

40%

42%

42%

57%

None of the above

Digital training programmes for employees

Utilising arti�cial intelligence / bots to improvecustomer experience or work�ows

Ensuring the right skills are in placee.g. digital analytics talent

Facilitating mobile working by optimisingthe mobile experience

Improving digital work�owse.g. via cloud-based tools

Joining up data to achieve a single view of the customer

Security of business and customer data

Implementing an extensible digital platformfor experience delivery

Organisations with annual revenues of more than £150m

Organisations with annual revenues of up to £150m

Respondents: 264


EXTENSIBLE DIGITAL PLATFORMS

For evidence that digital technology is no longer the preserve of the marketing department but rather a fundamental infrastructure that impacts the whole organisation, look no further than Figure 2. Extensible digital platforms are the top priority for organisations with annual revenues in excess of £150m, with well over half (57%) ranking this as a top-three priority for 2018 compared to 42% for security of data, and the same percentage for joining up data to achieve a single view of the customer.

An integrated and scalable technology platform for marketing and customer experience – incorporating digital communications and state-of-the-art content management – is becoming a hygiene factor for businesses that want to compete in a world where the customer’s expectation for personalised and relevant communications across different touchpoints and channels is greater than ever.

According to Gartner, a digital marketing hub3 “provides marketers and applications with standardised access to audience profile data, content, workflow elements, messaging and common analytic functions for orchestrating and optimising multichannel campaigns, conversations, experiences and data collection across online and offline channels, both manually and programmatically. It typically includes a bundle of native marketing applications and capabilities, but it is extensible through published services with which certified partners can integrate.”

3. https://www.gartner.com/doc/3606024/magic-quadrant-digital-marketing-hubs

FIGURE 3: WHAT BEST DESCRIBES YOUR ORGANISATION’S APPROACH TO MARKETING AND CUSTOMER EXPERIENCE TECHNOLOGY? (TOP-PERFORMING COMPANIES VS. THE MAINSTREAM)

25%

34%

26%

15%

9%

27%

46%

18%

We have a highly integrated,cloud-based technology stack

We have a somewhatintegrated, cloud-based

technology stack

We have a fragmentedapproach with inconsistent

integration betweentechnologies

We have little or no cloud-based technology

Top-performing companies Mainstream

Respondents: 3,181Methodology note: This chart is based on data from all client-side respondents who took part in the 2018 Digital Trends survey, and not just IT professionals. Top-performing companies are those that exceeded their top 2017 business goal by a significant margin, and who also significantly outperformed their competitors.


While marketing technology – catering for the specific needs and workflows of marketers – is fundamental to a digital experience delivery platform, companies are becoming increasingly mindful of the fact that an integrated experience should incorporate everything from interactions on first-party digital properties and marketing communications, through to customer-focused analytics and advertising carried out on third-party sites and mobile apps.

A key finding from the main Econsultancy/Adobe 2018 Digital Trends4 report (including data from all survey respondents globally rather than just IT professionals) is that top-performing companies are significantly more likely than their mainstream peers to have invested in an integrated, cloud-based technology stack. As can be seen in Figure 3, the highest-performing companies are almost three times more likely than other companies to have this kind of infrastructure in place (25% vs. 9%).

Further analysis of the data revealed that IT professionals working for organisations with annual revenues in excess of £150m are 56% more likely to say they have a highly integrated, cloud-based technology stack than their mainstream peers.

4. https://www.econsultancy.com/reports/digital-intelligence-briefing-2018-digital-trends


The pitfalls of relying on fragmented point solutions are becoming increasingly apparent for businesses that are struggling to create a seamless user experience, and to establish a single view of the customer when different data sets are held in disconnected platforms.

‘Dark martech’5 is a term which has been coined to describe the mass of homegrown marketing technology that many companies have developed to meet their own unique requirements, and to act as the plumbing between various point solutions. While dark martech isn’t always an inherently negative concept, companies can typically benefit from the advantages of cloud-based solutions that lend themselves well to extensibility, a software engineering design principle where the implementation takes future growth into consideration.

For those making a technology purchasing decision relating to a digital experience platform (or indeed any major software investment), there are numerous considerations and areas of due diligence that need to be part of the procurement process, with careful co-operation between marketing and IT a prerequisite for success.

Third-party consultancies and integrators are often involved in this process. Carol Fineagan, CIO at FranklinCovey, an organisational culture change specialist, told CMO.com6: “We’re involved from the time they [our clients] decide they need a new [marketing technology] solution. We sit down and work with them on the various business and technology requirements for each product. IT is also very engaged in interviewing the vendor and demo-ing, selecting, implementing, and then testing the product. The full roll-out is a collaborative effort between marketing and IT.”

It is becoming increasingly apparent that cloud-based marketing technology is no longer just for marketers, because of the impact these solutions have on other functions such as sales, operations, customer service and even finance departments. According to Paul Roehrig, Chief Strategy Officer at Cognizant Digital Business: “The act of becoming truly digital extends beyond the CMO. It is bigger than that.”7

5. http://chiefmartec.com/2016/04/dark-martech-mass-homegrown-marketing-technology/

6. http://www.cmo.com/interviews/articles/2017/8/29/it-and-marketing-have-to-be-in-lockstep-says-franklincovey-cio-carol-fineagan.html

7. http://www.cmo.com/features/articles/2017/5/24/could-cloud-based-martech-become-the-new-enterprise-technology-infrastructure-tlp-ptr.html

The act of becoming truly digital extends

beyond the CMO. It is bigger than that.

“Paul Roehrig, Chief Strategy Officer,

Cognizant Digital Business

FIGURE 4: WHEN MAKING A PURCHASING DECISION, WHICH OF THE FOLLOWING FACTORS ARE MOST IMPORTANT IN ENSURING YOUR DECISION MEETS BUSINESS NEEDS AND PLAYS INTO CURRENT INFRASTRUCTURE?

Respondents 2017: 370Respondents 2018: 232

5%

12%

20%

23%

26%

27%

39%

48%

57%

4%

9%

30%

22%

24%

34%

33%

55%

57%

None of the above

Industry ‘buzz’ e.g. featured / reviewed / comparedon tech content sites etc.

Working closely with legal and procurementto ensure compliance needs are met

Desk research, including case studies

Peers / personal network

Personal knowledge / gut feel

Checking o� functionality in relation tocompany’s digital roadmap

Ensuring technology is tested / evaluated by team

Knowledge and expertise of the vendor

2017 2018

Methodology note: Respondents could select up to three options.


Figure 4 shows how IT professionals rank the importance of different factors when seeking to ensure that their technology investment will meet their business and technical requirements.

As was the case last year, knowledge and expertise of the vendor (57%) is the most important requirement. The gap between this and the next most important factor (ensuring technology is tested/evaluated by team) has widened significantly since last year, from two percentage points to nine.

Year-on-year, the biggest climber is checking off functionality in relation to company’s digital roadmap, up from 33% in 2017 to 39% this year. This reflects a growing commitment within organisations to future-proof investments as a way of safeguarding against the need for a costly re-platforming exercise when requirements can no longer be met by a particular platform or vendor.

IT professionals rate knowledge and expertise of the vendor as the most important requirement when seeking to ensure that technology investment will meet business and technical needs.

FIGURE 5: WHAT ARE THE TOP THREE INTERNAL BARRIERS TO SUCCESSFULLY DRIVING DIGITAL TRANSFORMATION WITHIN YOUR ORGANISATION?

Respondents 2017: 398Respondents 2018: 243

8%

16%

20%

23%

23%

35%

42%

42%

45%

6%

19%

18%

29%

29%

37%

40%

42%

41%

None of the above

Balancing need for e�ective authentication with usability

Lack of senior management support and board buy-in

Measuring the ROI of technology investments

Recruiting individuals with the right mix of skillse.g. the ‘full-stack employee’

Inadequate budget to support levels of innovation required

Lack of shared vision as to whatdigital transformation means

Departmental silos / bureaucratic processes

Di�culties integrating legacy systemswith new tools / technologies

2017 2018Methodology note: Respondents could select up to three options.


Progress towards digitisation of the organisation can by stymied by a host of internal barriers which are shown in Figure 5. The most significant of these in-company obstacles is difficulties integrating legacy systems with new tools/technologies, cited as a top-three challenge by 45% of respondents, up from 41% last year.

This finding echoes separate research8 by PAC carried out in 2017 which found that ageing technology is holding back European businesses from realising the benefits of digital transformation. According to that study, more than half (57%) of 500 IT and business decision makers at large enterprises said their technology infrastructure was struggling to keep up with the demand that digitisation is bringing.

The reality for many organisations with sprawling and complicated infrastructure is that existing solutions need to be managed in parallel with more state-of-the-art cloud-based technologies that can help to fast-track their digital evolution.

4. The internal focus: digital transformation and workflows

8. http://www.fujitsu.com/fts/about/resources/news/press-releases/2017/emeai-20170124-european-businesses-ageing-technology-is.html

Difficulties in integrating legacy systems with new tools and technologies is cited as a top-three challenge by respondents.

FIGURE 6: WHAT ARE THE TOP THREE INTERNAL BARRIERS TO SUCCESSFULLY DRIVING DIGITAL TRANSFORMATION WITHIN YOUR ORGANISATION? (BY COMPANY SIZE)

Respondents: 243

8%

15%

23%

26%

23%

36%

40%

42%

35%

2%

17%

18%

23%

25%

33%

52%

55%

60%

None of the above

Balancing need for e�ective authentication with usability

Lack of senior management support and board buy-in

Measuring the ROI of technology investments

Recruiting individuals with the right mix of skillse.g. the ‘full-stack employee’

Inadequate budget to support levels of innovation required

Lack of shared vision as to whatdigital transformation means

Di�culties integrating legacy systemswith new tools / technologies

Departmental silos / bureaucratic processes



Methodology note: Respondents could select up to three options.


Figure 6 shows the different perspectives on barriers through the lens of smaller and larger organisations. For smaller companies – those companies with annual revenues of less than £150m – the pain appears to be more evenly spread across the full spectrum of headaches that can hinder digital transformation.

Looking at the enterprise space, however, respondents are very much preoccupied by three key internal challenges, namely departmental silos/ bureaucratic processes (60%), difficulties integrating legacy systems with new tools/technologies (55%) and lack of shared vision as to what digital transformation means (52%).

Part of the solution to all these challenges lies in strong leadership and close cooperation between different C-suite executives to ensure that digital transformation initiatives have the best chance of success.

Research by Altimeter published in 20179 shows that responsibility for digital transformation is now most likely to lie with the CIO/CTO (28%), ahead of the CMO (23%) and CEO (20%). While in previous years the CIO and CMO were vying more closely for digital transformation leadership, the evidence now suggests a shift towards CIO/CTO ownership. But irrespective of where the buck ultimately stops, joint C-suite leadership and a consistent vision – backed by the CEO – is required to maximise the chances of success, and to minimise the negative impact of departmental silos.

9. http://www.cmo.com/features/articles/2017/10/3/digital-transformation-needs-change-management-not-just-technology-altimeter.html

FIGURE 7: PROPORTION OF COMPANY RESPONDENTS AGREEING (‘STRONGLY’ OR ‘SOMEWHAT’) WITH THESE STATEMENTS

40%

53%

58%

64%

55%

77%

59%

46%

55%

63%

67%

61%

75%

70%

Resources – we have enough people and time to meet our needs and business objectives

Process – we have the means and methods to ensure that strategy is carried out e�ciently

Strategy – we have a well-designed technical roadmap aligned to digital transformation

Technology – we have the tools to use data in order to create compelling, personalised, real-time experiences and

streamlined work�ows

Skills – we have the right mix of digital skills and talent within the organisation to meet our needs

and deliver value to the business

Data – we have access to and control of user data

Culture – we have an innovative, adaptable and'fail fast' approach

2017 2018

Respondents 2017: 358 Respondents 2018: 228


While technology plays a pivotal role in supporting digital transformation initiatives, there is a set of key elements or capabilities that need to be working in harmony in order to produce the right kind of alchemy to effect significant and positive digital change.

Figure 7 shows the extent to which survey respondents agree with a range of statements, each relating to their capabilities in a particular area. In respect of data, there has been a marginal improvement in the proportion of IT professionals that believe they ‘have access to and control of user data’.

In all other areas, however, there has been a worrying decline in the number of companies that believe they have the required capabilities. The most significant drop is for culture, with the percentage of companies agreeing they ‘have an innovative, adaptable and fail-fast approach’ falling from 70% to 59%. While some respondents may philosophically disagree with the notion of ‘failing fast’ because they prefer not to fail at all, it is nonetheless worrying to see a perceived decline in the number of companies where a culture of innovation and adaptability is nurtured.

In other areas there has been a less pronounced decline, though there has been a statistically significant six-percentage-point decrease for skills and resources. One explanation for the year-on-year declines may be a greater understanding and awareness of the deficiencies hampering many organisations’ digital transformation initiatives. To put a positive spin on this, greater acknowledgement of the deficit in many areas may result in initiatives and actions to address these capability issues, though this ultimately depends on company leadership agreeing that there are problems that need to be tackled, and prioritising measures that will lead to improvement.

In respect of business process, it can be seen in Figure 7 that just over half (53%) of respondents agree that their companies ‘have the means and methods to ensure that strategy is carried out efficiently’.

FIGURE 8: WHAT ROUTES HAVE YOU TAKEN TO IMPROVE WORKFLOWS WHILST MAINTAINING AND IMPROVING LEVELS OF SECURITY AND COMPLIANCE FOR YOUR COMPANY?


14%

26%

27%

27%

30%

38%

40%

48%

9%

30%

30%

32%

33%

40%

36%

50%

None of the above

Designing usable yet secure authentication methods

Simplifying forms by pre-�lling datafrom existing user pro�les

Integration of electronic signatures / sign-ups

Ensuring seamless cross-device experiences for employees

Linking automated work�ows to back-end systems(reducing processing time)

Moving an increasing portion of our technology stack tointegrated cloud solutions

Switching to paperless, digital end-to-end work�ows

2017 2018


An important role of IT is to make sure that processes are made as efficient as possible through use of appropriate software and solutions. For most organisations, workflows are ripe for improvement across a range of business functions, from marketing and sales, to human resources and finance.

Figure 8 shows that fewer organisations than last year are taking a range of initiatives to improve workflows against the backdrop of tighter security and compliance requirements which companies are typically working towards. Just under half (48%) of respondents say they are switching to paperless, digital end-to-end workflows, compared to exactly half last year.

More encouragingly, the proportion of companies moving an increasing portion of [the] technology stack to integrated cloud solutions has jumped from 36% to 40%.

Workflows can come in different shapes and sizes, but they ultimately help with the coordination of tasks, collaboration between staff and the synchronisation of data between systems. While a small workflow improvement may not always move the needle when judged in isolation, the cumulative effect of incremental efficiencies across the business will ultimately add up to reduced costs and greater productivity, as well as improved morale among staff and, ultimately, greater customer satisfaction.

FIGURE 9: WHAT ARE THE TOP THREE EXTERNAL CHALLENGES YOU FACE WHICH ARE KEEPING YOU AWAKE AT NIGHT?


6%

20%

20%

23%

34%

36%

37%

39%

42%

8%

19%

19%

26%

38%

38%

31%

40%

41%

None of the above

Industry and geographical compliance across all businesssystems and enterprise services

Industry competition and unanticipated commercial threats

Identifying trusted vendors who share and can deliver on along-term technical vision

Finding the right mix of toolse.g. what’s promised by vendors versus the reality

Keeping ahead of major technologyconnected to innovation

Tech failures / data or servicesnot being available (downtime)

Keeping up with changingcustomer expectations and behaviour

Threat of security breaches and cyber-risk threats

2017 2018


5. Managing the existential threat… and embracing the opportunities

Figure 9 shows the plethora of challenges that face IT leaders as digitisation accelerates, and all areas of the business look to IT to help them improve performance.

As was the case last year, security is the main preoccupation for IT executives. More respondents cited the threat of security breaches and cyber-risk threats (42%) as something that concerns them than any other challenge. As we saw in Section 3, security of business and customer data is also the top priority for the year ahead.

While the worry over possible security breaches is nothing new, developments related to digital transformation are feeding a new wave of IT complexity. Customer information is an increasingly vital resource, but also one many are struggling to protect. Well-publicised instances of user data theft have further raised public consciousness of the importance of IT security in the last year, with Equifax, Uber and Yahoo (now Oath) among those disclosing breaches.

42% of respondents cited the threat of security breaches and cyber-risk threats as something that concerns them, more than any other challenge.


“Instead of a default-deny approach to security, we are now seeing a default-allow approach. This is a fundamental change in how security programs

are developed.

“

In its latest Global Risks Report10, published in January 2018, the World Economic Forum elevated cyber-attacks and data fraud or theft to third and fourth, respectively, in its list of key risks facing global society. Extreme weather events and natural disasters were the only threats placed higher.

At the same time, IT practitioners are being compelled to adopt new security approaches because of the open, collaborative and data-hungry nature of the modern-day digital business. Tom Scholtz, Research Vice-President at Gartner, noted in 2017 that to participate in a digital world, organisations must now ‘let external partners and customers in’ 11. As a result, security leaders are having to develop programmes ‘based on trust’. “Instead of a default-deny approach to security, we are now seeing a default-allow approach. This is a fundamental change in how security programs are developed”, he added.

The threat of downtime remains another existential worry that has been highlighted very publicly in the last 12 months. The percentage of respondents losing sleep over the prospect of tech failures has risen by six percentage points, to 37% (Figure 9). This illustrates the growing importance of consistency in delivering a positive user experience and retaining customers, and the feeling of exposure due to downtime is particularly strong among businesses with annual revenues below £150m (Figure 10). Typically, these organisations do not have the same means as their larger peers to invest in private, dedicated connectivity and data centre resource, to maintain uptime.

A positive angle from the responses, for IT practitioners, is an indication of improved vendor engagement. As Figure 9 shows, challenges of finding the right mix of tools, e.g. what’s promised by vendors versus the reality, and identifying trusted vendors who share and can deliver on a long-term technical vision, have both dropped in prominence since 2017 (by four and three percentage points, respectively). Confidence in technology partners is, predictably, higher among larger businesses that typically demand a higher level of customer care and solution capability.

The high proportion (39%) of respondents that cite keeping up with changing customer expectations and behaviour as one of their top external challenges demonstrates the increased customer centricity of a new breed of CIO.

No company – no matter how large or seemingly well established – is immune from the whims of the flighty, modern-day consumer. There is no need to list out the numerous corporate brand names that have suffered falls from grace in recent years, after losing a grip on the needs of their customers and allowing rivals to step in. Nor the huge investments digital giants such as Google, Apple, Facebook and Amazon (‘GAFA’) make in constant, iterative changes to their products in a bid to match the constantly shifting expectations of their audiences.

10. https://www.weforum.org/reports/the-global-risks-report-2018

11. https://www.gartner.com/smarterwithgartner/digital-has-changed-the-security-landscape/

Tom Scholtz, Research Vice-President, Gartner

FIGURE 10: WHAT ARE THE TOP THREE EXTERNAL CHALLENGES YOU FACE WHICH ARE EFFECTIVELY KEEPING YOU AWAKE AT NIGHT? (BY COMPANY SIZE)

Respondents: 246

5%

24%

40%

17%

39%

13%

37%

42%

40%

3%

22%

27%

28%

32%

33%

38%

45%

48%

None of the above

Identifying trusted vendors who share and can deliver on along-term technical vision

Tech failures / data or servicesnot being available (downtime)

Industry competition and unanticipated commercial threats

Finding the right mix of toolse.g. what’s promised by vendors versus the reality

Industry and geographical compliance across all businesssystems and enterprise services

Keeping ahead of major technologyconnected to innovation

Threat of security breaches and cyber-risk threats

Keeping up with changingcustomer expectations and behaviour




IT leaders at organisations with more than £150m in annual sales are clearly particularly conscious of the challenges that come with doing business in the age of the customer (Figure 10). They are significantly more likely than their peers at smaller organisations to experience difficulties meeting customer expectations (48% versus 40%). With rivals only a click away, should they fail, they are also more disposed towards highlighting industry competition and unanticipated commercial threats as a key worry (28% versus 17%).

Both user expectations and behaviour continue to change rapidly in the hyper-competitive digital arena. And with the vast majority of customer interaction now taking place via software, the IT department plays a lead role in enabling companies to respond to new user trends. Notably, keeping up to speed with technological change – an obvious core challenge for IT leaders – is reported by fewer respondents as a sleep-impairer than maintaining a grip on customer behaviour and expectations (Figure 9). This is the case across both larger and smaller companies (Figure 10).

This is a hugely exciting time to be at the helm of an IT department, with a range of potentially transformative technologies coming through the innovation pipeline, such as the Internet of Things (IoT), artificial intelligence (AI) and augmented or virtual reality.

At the same time, the IT department is playing an increasingly pivotal role in delivering the company’s go-to-market strategy, and in helping to unlock the fabled digital marketing holy grail of one-to-one customer communications at scale.

FIGURE 11: LOOKING AHEAD, WHICH OF THESE DO YOU REGARD AS THE MOST EXCITING PROSPECT IN THREE YEARS’ TIME? (IT DECISION MAKERS VERSUS OTHER DECISION MAKERS)

IT decision makers: 217Other decision makers: 2,342

3%

8%

6%

13%

20%

11%

38%

2%

8%

9%

14%

17%

20%

30%

Other

Enhanced payment technologiese.g. mobile wallets, e-receipts

Voice interfacese.g. Amazon Echo, Google Home

Engaging audiences through virtual or augmented reality

Utilising arti�cial intelligence / bots to drivecampaigns and experiences

Internet of Things / connected devicese.g. wearables, audience tracking

Delivering personalised experiences in real time

IT decision makers Other decision makers


Figure 11 shows how IT decision makers view the most exciting opportunities in the medium term compared to our Digital Trends survey respondents in other business functions (predominantly marketers). Like their peers outside IT, they are most likely to see delivering personalised experiences in real time as the most exciting prospect in three years’ time, ahead of other technological innovations.

However, the gap between this option and others is not quite as large for IT respondents as it is for other decision-makers within the business. This is partly because IT executives are almost twice as likely to see IoT as the most exciting prospect (20%, compared to 11% of non-IT respondents).

While there are potential security and privacy headaches to be managed, connected devices can bring significant benefits both to consumers through value-added services, and to companies who can build their understanding of customer behaviour through new and rich sources of data. AI, with its promise of scaled content creation, quick and effective customer communications, and enhanced commercial insight, are also very much on the IT radar for the coming three years.

FIGURE 12: LOOKING AHEAD, WHICH OF THESE DO YOU REGARD AS THE MOST EXCITING PROSPECT IN THREE YEARS’ TIME? (BY COMPANY SIZE)

Respondents: 217

2%

10%

16%

8%

22%

14%

28%

3%

5%

7%

8%

20%

27%

30%

Other

Enhanced payment technologiese.g. mobile wallets, e-receipts

Engaging audiences through virtual or augmented reality

Voice interfacese.g. Amazon Echo, Google Home

Internet of Things / connected devicese.g. wearables, audience tracking

Utilising arti�cial intelligence / bots to drivecampaigns and experiences

Delivering personalised experiences in real time




IT executives at larger companies (Figure 12) are particularly keen on AI, with their commercial and operational scale affording greater opportunities for optimisation. They are almost twice as likely as peers at smaller organisations to cite utilising artificial intelligence / bots to drive campaigns and experience as an exciting prospect (27% versus 14%).

The responses back up evidence that AI is already making a significant impact, enabling companies to be smarter and more effective in the way they reach their target audiences. In the main 2018 Digital Trends report, it was shown that top-performing companies are more than twice as likely to be using AI for marketing (28% versus 12%).

FIGURE 13: IN ORDER TO KEEP AHEAD OF MAJOR TECHNOLOGY AND INDUSTRY CHANGES, HOW DO YOU STAY CONNECTED TO THE LATEST INFORMATION?


6%

20%

20%

28%

31%

39%

49%

51%

57%

65%

3%

18%

18%

27%

25%

46%

54%

42%

44%

62%

Other

Line-of-business (LOB) leaders

Direct reports e.g. reverse mentoring

The digital marketing team

Members of the leadership team e.g. CEO, CFO, CMO, CDO

Whitepapers

Webcasts and webinars

Expertise / insights gained from vendor partnerships

Industry peers / competitors

Tech content sites

2017 2018


Figure 13 shows how IT executives keep connected to the latest information. We have already noted the onus on IT leaders to be continuously up-to-speed with key industry developments, whether in relation to technological advances, operational threats or customer behaviour. This requirement for a broad understanding of both technology and business issues is indicative of the changing role of IT, as it becomes a department that can connect up all areas of the business and play a central part in development of strategy.

A finding from the 2017 version of this report was that this remained a work in progress. It was clear, for example, that internal information exchange between IT and other executives was an area that organisations needed to work on, and that IT’s position as the business-technology bridge had not yet been secured. Few respondents indicated that their colleagues – from whichever department – were helping them stay connected with the latest trends.

From this year’s responses, there has been some noticeable improvement, although not to a startling degree. There has been a significant increase (up six percentage points, from 25% to 31%) in the proportion of IT executives staying connected as a result of the useful information flow from members of their organisation’s leadership team (Figure 13). And while the percentage increases are only indicative rather than statistically significant, there has also been an uptick in the proportion of IT respondents citing the digital marketing team (up one point), direct reports (two points), and line-of-business leaders (also two points) as a way of staying connected.

However, IT leaders continue to look externally for much of their information, whether from technology content providers, peers and competitors, or vendor partners. The proportion of respondents citing industry peers/competitors has climbed from 44% to 57%, while the figure for those tuning into expertise/insights gained from vendor partnerships has jumped from 42% to 51%.


6. Actionable tips to help future-proof your IT function

1. Embrace ownership of a customer-focused digital transformation strategy

Research shows that the CIO is increasingly responsible for digital transformation as the technology requirements for a truly customer-centric approach transcend the marketing function and remit of the CMO. With the backing of the CEO, the CIO must lead the way in ensuring that the C-suite is united around a consistent vision for the business, and that there is a mandate to break down the departmental silos that can often thwart progress. As well as the need to have best-of-breed technology, IT leaders need to be mindful of other capabilities relating to areas such as data, culture, skills and processes.

2. Future-proof your technology strategy

Senior IT professionals should be mindful of the fact that a truly integrated customer experience should incorporate everything from interactions on first-party digital properties and at physical locations, through to digital communications and even advertising carried out on third-party sites and mobile apps. This requires a scalable technology platform and the ability to harness customer data from a host of different touchpoints to provide a more holistic and personalised experience.

The research shows that top-performing companies are almost three times more likely than their mainstream peers to have invested in an integrated, cloud-based technology stack. The CIO must ensure that the company is investing in an extensible digital platform so that the business is positioned to meet growing customer expectations for personalised and relevant communications.

3. Optimise business workflows

The IT department must focus on ensuring that processes are made as efficient as possible across a range of business functions, from marketing and sales, to human resources and finance. The impact of efficiencies across the business will ultimately result in reduced costs and greater productivity, as well as better staff morale and greater customer satisfaction.

The CIO should ensure there is an unswerving focus on ensuring the switch to paperless, digital end-to-end workflows. The use of state-of-the-art cloud solutions can free up IT time to focus on business improvements, rather than managing legacy technology that is no longer conducive to a customer-centric strategy.


4. Work on your softer skills

While technology expertise is a given for senior IT executives, the path to the top of the organisation will be barred to those who are lacking in the softer skills that are required for effective collaboration across the business. Communicating, cooperating and winning influence within other parts of the business will continue to be a key requirement for CIOs and senior IT managers.

IT leaders also need to have an awareness of what constitutes better business performance across a range of different business functions. The CIO must be able to prioritise technology requirements based on the long-term health of the business, rather than constant fire-fighting based on short-term needs.

5. Lean on your suppliers for help and expertise

The modern-day CIO cannot be expected to know everything about the technological and consumer-related trends that are impacting the business, or about which types of solutions can have the greatest impact on commercial performance.

The modern IT professionals must leverage their networks both inside and outside the organisation. Consultancies and technology vendors, who have the benefit of working with leading organisations across a range of business verticals, can also be a great source of information and advice.

FIGURE 14: IN WHICH REGION ARE YOU BASED?

Respondents: 371

33%

31%

22%

9%

3% 1% 1%

North America Asia Europe Australia / NewZealand

Middle East Africa Other


12. Appendix: respondent profiles

RESPONDENTS BASED IN ASIA PACIFIC FIGURE 16: IN WHICH OF THE FOLLOWING COUNTRIES ARE YOU BASED?

Respondents: 146

9%

1%

1%

3%

5%

6%

7%

10%

23%

35%

Other

South Korea

Philippines

Singapore

China

Indonesia

Malaysia

Thailand

Australia / New Zealand

India

RESPONDENTS BASED IN EUROPE FIGURE 15: IN WHICH OF THE FOLLOWING COUNTRIES ARE YOU BASED?

Respondents: 83

19%

1%

2%

3%

4%

5%

5%

5%

7%

16%

16%

17%

Other

Belgium

Spain

Switzerland

Netherlands

Norway

Denmark

Sweden

France

Italy

UK

Germany


FIGURE 17: WHAT BEST DESCRIBES YOUR JOB ROLE?

Respondents: 371

61%

20%

7% 7%5%

Manager Director / seniordirector

VP / SVP / EVP C-level / generalmanager

Board level

FIGURE 18: ARE YOU MORE FOCUSED ON B2B OR B2C AS A BUSINESS?

Respondents: 342

30% 30%

40%

B2B B2C B2B and B2C (equally)


FIGURE 19: IN WHICH BUSINESS SECTOR IS YOUR ORGANISATION?

Respondents: 343

15%

2%

2%

2%

3%

3%

4%

4%

6%

7%

8%

9%

9%

12%

14%

Other

Automotive

Travel and Hospitality

Consumer Goods

Telecoms

Professional Services (e.g. consulting)

Print / Publishing

Charities and Non-Pro�t

Retail / Ecommerce

Media and Entertainment

Healthcare and Pharmaceuticals

Manufacturing and Engineering

Government

Technology

Financial Services and Insurance

FIGURE 20: WHAT IS YOUR ANNUAL COMPANY REVENUE?

Respondents: 194

13%

20%

14%13%

11%

29%

<£1 million £1 – £10 million £10 – £50 million £50 – £150 million £150 million – £1 billion

More than £1 billion


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