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© 2015 ISACA. All rights reserved.
TOP DIGITAL TECHNOLOGY TRENDS THAT AFFECT STRATEGY
INNOVATION INSIGHTS
Published July 2015
Innovation Insights 2
Published July 2015
We consider the following trends the most likely to deliver significant value, in excess of cost, to the vast majority of enterprises. Perspectives on potential benefits, costs, risk, business disruption and other factors are provided for each trend.
1. Big Data Analytics
2. Mobile
3. Cloud
4. Machine Learning
5. Internet of Things
6. Massive Open Online Courses
7. Social Networking
8. Digital Business Models
9. Cybersecurity
10. Digital Currency
A Uniquely Credible ApproachUsing a proprietary methodology to assess emerging trends based on the value (weighing a combination of benefit/risk/cost) that they will create for businesses, we leveraged the collective expertise of more than 140,000 ISACA members who are experienced and qualified practitioners and executives across all business sectors globally. Through their unbiased, independent insights, we have highlighted the top emerging digital technology trends and the business innovation they can be expected to deliver. For more information, visit www.isaca.org/ISACA-insights.
© 2015 ISACA. All rights reserved.
It is clear that digital technologies
will remain a major driver of
business innovation for the
foreseeable future. Businesses
that adopt the right trends—
innovate around them and/or
integrate them into the fabric of
their operations—are more likely
to strengthen their competitive
advantage and prosper.
Those that don’t, won’t.
Targeted to business leaders
and board members, this report
provides high-level actionable
insights into the digital trends
most likely to deliver business
value today and tomorrow,
including guidance on “How To
Take This Forward”. Additional
perspectives on each trend
will be covered in individual
trend reports. This report also
contains a view of the trends
as they pertain to the financial
services sector.
TOP 10 EMERGING DIGITAL TECHNOLOGY TRENDS
FIGURE 1—Business Value and Percentage of Benefiting Enterprises
Small Value for Some Small Value for Most
Big Value for MostBig Value for Some
Increasing Likelihood
Critical
High
Medium
Low
L
Machine Learning
Remote Possible Likely Highly Likely
Incr
easi
ng V
alue
MCloudH
LM
MInternet
of Things
LDigital Business Models
N MOOCs
LDigital Currency
LCybersecurity
Social Networking
Mobile
Big Data Analytics
Recommendation
Nature of Value
Wait
Embrace
Realize Benefits
Optimize Risk
Mixed Trend
VH
H
M
L
VL
N
Resource Cost
Very High
High
Medium
Low
Very Low
None
Published July 2015
Innovation Insights
© 2015 ISACA. All rights reserved.
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DESCRIPTION OF TRENDS Ranked in order of value, the following trends were seen as most significant in terms of their potential for the majority of organizations.
1. Big Data Analytics: The application of advanced analytics to high volumes of data, often from a high variety of sources, performed at high velocity to uncover hidden patterns, unknown correlations and other useful information. Its main purpose is to enable organizations to make better decisions, such as those enabling more effective marketing. Examples of this trend can be found here.
2. Mobile: The use of portable devices connected to the Internet and other networks to extend business capability. The majority of these devices are owned by individuals rather than businesses. The application of these technologies to a business context can provide a new platform to deliver business applications, enable richer interaction with customers and allow for more streamlined business operations by extending the computing environment to previously unreachable areas. Examples of this trend can be found here.
3. Cloud: A model of computing service delivery providing on-demand access to technology services (including applications, storage and infrastructure) in discrete “as needed” increments. Compared to traditionally sourced IT services, this model offers rapid deployment with low IT involvement, minimal capital investment and without the need for a significant support structure. Examples of this trend can be found here.
4. Machine Learning: The use of computing resources that have the ability to learn (acquire and apply knowledge and skills that maximize the chance of success). These cognitive systems have the potential to learn from business-related interactions and deliver evidence-based responses to transform how organizations think, act and operate. Examples include IBM’s Watson.
BUSINESS INNOVATION INDEX* HIGH
Benefit Realized Very High
Risk Optimized Low
Resource Cost Low
Time to Mainstream Already Mainstream
RECOMMENDATION EMBRACE
BUSINESS INNOVATION INDEX* MEDIUM
Benefit Realized Very High
Risk Optimized Low
Resource Cost Medium
Time to Mainstream Already Mainstream
RECOMMENDATION EMBRACE
* The ISACA Emerging Business and Technology Committee (EBTC) utilizes a proprietary rating system for scoring of trends. Business Innovation Index refers to the overall level of innovation that businesses can expect from adopting the technology trend. It is a combination of “benefit realized,” “risk optimized” and “resource cost.”
BUSINESS INNOVATION INDEX* LOW
Benefit Realized Very High
Risk Optimized Very Low
Resource Cost High
Time to Mainstream Over 5 Years
RECOMMENDATION WAIT
BUSINESS INNOVATION INDEX* MEDIUM
Benefit Realized Very High
Risk Optimized None
Resource Cost Medium
Time to Mainstream Already Mainstream
RECOMMENDATION EMBRACE
Innovation Insights
© 2015 ISACA. All rights reserved.
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5. Internet of Things: The linking of physical and virtual “things” (or objects) over the Internet and other networks through the exploitation of data capture and communication capabilities, enabling them to respond to their environment and be active participants in business, social and other processes—with or without direct human intervention. These “things” can include any object (such as jet engines, pacemakers, refrigerators, cars, traffic lights), all with unique identities. They can originate data themselves, for example, by using built-in sensors. They can communicate among themselves and with their environment by exchanging data. They can react autonomously to real-world events by triggering actions. Examples of this trend can be found here.
6. Massive Open Online Courses: The use of telepresence and telecommunications technologies (e.g., virtual environments) for educational purposes. Use of this technology can enable large-size remote educational lectures and distributed remote peer study groups, and foster educational collaboration among large student groups. Examples of this trend can be found here.
7. Social Networking: The application of social networking concepts to a business context. Social networking includes services that enable and foster peer social interaction through online electronic mechanisms such as the web and/or mobile platforms. Social networking can enhance employee peer interaction, enable a new channel of communication with customers and act as an extension of an organization’s marketing platform. Examples of this trend can be found here.
8. Digital Business Models: Business models that are only feasible and potentially commercially viable through the use of digital technologies. Historically, business models have been linear (value produced upstream and consumed downstream), but the use of digital technologies has also enabled networked/platform business models to be viable. Examples include freemium, bricks and clicks, and long tail. They can be very disruptive to entire industries; for example, the music and print media industries have been transformed by digitally enabled business models. Examples of this trend can be found here.
* The ISACA Emerging Business and Technology Committee (EBTC) utilizes a proprietary rating system for scoring of trends. Business Innovation Index refers to the overall level of innovation that businesses can expect from adopting the technology trend. It is a combination of “benefit realized,” “risk optimized” and “resource cost.”
BUSINESS INNOVATION INDEX* LOW
Benefit Realized High
Risk Optimized None
Resource Cost Medium
Time to Mainstream 2-5 Years
RECOMMENDATION WAIT
BUSINESS INNOVATION INDEX* LOW
Benefit Realized Low
Risk Optimized Low
Resource Cost None
Time to Mainstream 1-2 Years
RECOMMENDATION EMBRACE
BUSINESS INNOVATION INDEX* LOW
Benefit Realized Medium
Risk Optimized Very Low
Resource Cost Low
Time to Mainstream Already Mainstream
RECOMMENDATION EMBRACE
BUSINESS INNOVATION INDEX* LOW
Benefit Realized Medium
Risk Optimized Negative
Resource Cost Low
Time to Mainstream 1-2 Years
RECOMMENDATION EMBRACE
Innovation Insights
© 2015 ISACA. All rights reserved.
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9. Cybersecurity: The discipline of protecting the data, information, computing software, computing devices, network devices and data origination sources (such as people or sensory devices) on any information network, including everything they connect with and control. It addresses threats to information originated, processed, stored and transported by information systems that are internetworked. Examples and an overview of this trend can be found here.
10. Digital Currency: Monetary instruments that bear value and are not tied to a physical artifact. They are a form of virtual currency. Like physical currency (i.e., cash), these currencies can be used as tender and may be provided as payment for goods and services or (in some cases) may beexchanged with other physical currencies (e.g., euros or US dollars). Digital currencies may be issued by a central authority (alternative currency) or may be decentralized, relying on cryptography to enforce integrity and prevent counterfeit duplication (“cryptocurrency”). Widely used digital currencies in current circulation include Bitcoin and Litecoin. Discussion of how it might be used in business can be found here.
BUSINESS INNOVATION INDEX* LOW
Benefit Realized Medium
Risk Optimized None
Resource Cost Low
Time to Mainstream 2-5 Years
RECOMMENDATION EMBRACE
Not every sector of industry will be impacted by every trend in equal measure. Some sectors have unique aspects that influence how trends can be used and, thus, make trends more or less valuable. For this report, we have focused on financial services. ISACA applied the same scoring process and methodology to the financial services sector and found the following trends most likely to deliver business value:
1. Big Data Analytics
2. Cloud
3. Business/IT Integration
4. Machine Learning
5. Social Networking
6. Digital Payments
7. Massive Open Online Courses
8. Internet of Things
9. Consumerization of IT
10. Digital Business Models
FINANCIAL SERVICES SECTOR
* The ISACA Emerging Business and Technology Committee (EBTC) utilizes a proprietary rating system for scoring of trends. Business Innovation Index refers to the overall level of innovation that businesses can expect from adopting the technology trend. It is a combination of “benefit realized,” “risk optimized” and “resource cost.”
BUSINESS INNOVATION INDEX* LOW
Benefit Realized Very Low
Risk Optimized Medium
Resource Cost Low
Time to Mainstream Already Mainstream
RECOMMENDATION EMBRACE
Innovation Insights
© 2015 ISACA. All rights reserved.
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DIFFERENCES FROM SECTOR- NEUTRAL SCORES• Some trends were removed:
– Cybersecurity and Mobile were removed due to faster adoption (late mainstream adoption).
– Digital Currency was removed as it scored too low.
• Appearance of sector-specific trends:
– Business/IT Integration
– Digital Payments
– Consumerization of IT
• Machine Learning and Internet of Things are “Embrace” rather than “Wait” recommendation.
FIGURE 2—Business Value and Percentage of Benefiting Financial Services Enterprises
Recommendation
Small Value for Some Small Value for Most
Big Value for MostBig Value for Some
Nature of Expected Value
Increasing Likelihood
Critical
High
Medium
Low
VL
Machine Learning
Wait
Embrace
Realize Benefits
Mixed Trend
Game-changer
Remote Possible Likely Highly Likely
VH
H
M
L
VL
N
Incr
easi
ng V
alue
M Cloud
M
Internet of Things
L
Digital Business Models
MOOCs
Digital Payments
Social Networking
Big Data Analytics
Business/IT Integration
Resource Cost
Very High
High
Medium
Low
Very Low
None
M
M
M Consumerization of IT
MM
M
Innovation Insights
© 2015 ISACA. All rights reserved.
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DESCRIPTION OF TRENDS
The following are descriptions of the additional top trends that were identified for the financial services sector.
Business/IT Integration: The move to make IT an embedded business function by integrating the roles of technology planning, acquisition and support with business functions outside of the traditional IT silo. The main benefit is to enable faster and better business value creation through IT. This is achieved by better understanding the business implications of technology-related opportunities and threats leading to faster decision making and better alignment of technologyrelated decisions with business direction.
Digital Payments: The use of mobile or other technologies to enable payment transactions without the use of a physical instrument. This can include contactless smart cards, near-field communications, infrared, Wi-Fi or any other mechanism. This can also include purely virtual payments such as those enabled via digital (virtual) currencies such as Bitcoin. Examples of digital payments include mobile points of sale, digital wallets, mobile payment technologies, etc.
Consumerization of IT: The reorientation of IT product and service design around the individual end user, leading to many more individuals acquiring technology rather than organizations acquiring technology. While this has major implications for IT businesses, the consequences for non-IT businesses include the proliferation of consumer-oriented technology within the workplace. This can lead to cost savings, privacy and security issues, as well as diminishing the role of corporate-acquired technology components and the internal IT organizations historically tasked with acquiring and maintaining them.
BUSINESS INNOVATION INDEX* VERY LOW
Benefit Realized High
Risk Optimized Negative
Resource Cost Medium
Time to Mainstream 2-5 Years
RECOMMENDATION EMBRACE
BUSINESS INNOVATION INDEX* LOW
Benefit Realized Medium
Risk Optimized Low
Resource Cost Medium
Time to Mainstream Already Mainstream
RECOMMENDATION EMBRACE
BUSINESS INNOVATION INDEX* NEGATIVE
Benefit Realized Medium
Risk Optimized Negative
Resource Cost Medium
Time to Mainstream Already Mainstream
RECOMMENDATION EMBRACE
* The ISACA Emerging Business and Technology Committee (EBTC) utilizes a proprietary rating system for scoring of trends. Business Innovation Index refers to the overall level of innovation that businesses can expect from adopting the technology trend. It is a combination of “benefit realized,” “risk optimized” and “resource cost.”
Innovation Insights 8
Published July 2015
© 2015 ISACA. All rights reserved.
1 How does the organization identify the new or maturing technologies that might be of value and merit consideration in setting or adjusting strategies, objectives and plans?
2 Who is responsible for the assessment process?
3 Who determines whether existing strategies, objectives or plans should be adjusted?
4 Does the assessment consider the potential for value to be created in multiple areas of the organization, or does each functional area act on its own?
5 Does the assessment consider, with inclusion in the process of related experts, potential compliance and other risk?
6 Does the assessment consider the potential actions of competitors, suppliers, customers and regulators?
7 Does the board discuss the potential represented by new or maturing technology on a regular basis and as part of its discussions of enterprise strategy?
8 What are other companies like ours doing in this space?
Moving ForwardA key element of governance is asking the right questions. Board members and executive management should consider these questions when evaluating strategy relative to new digital trends.
DefinitionsThe terms used in this report are defined and explained in more detail at the following URL: www.isaca.org/ISACA-insights
HOW TO TAKE THIS FORWARDThe following questions may be of value in framing a board or executive management discussion about the potential need to adjust strategy to realize the potential of new and disruptive technology.
Innovation Insights
© 2015 ISACA. All rights reserved.
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Published July 2015
About the Innovation Insights seriesOur mission with this report, and other reports in the Innovation Insights series, is to provide business leaders and board members with actionable insights that allow them to create and drive high-value business strategy by offering an independent, unbiased viewpoint. Our uniquely credible approach uses proprietary methodology to assess emerging trends based on their business value (weighing a combination of benefit/risk/cost) and leveraging the collective expertise of ISACA members who are experienced and qualified practitioners and executives across all business sectors globally. We have no commercial connection to those who may benefit from one trend over another. For more information, visit www.isaca.org/ISACA-insights.
ISACA®
ISACA helps global professionals lead, adapt and assure trust in an evolving digital world by offering innovative and world-class knowledge, standards, networking, credentialing and career development. Established in 1969, ISACA is a global nonprofit association of 140,000 professionals in 180 countries. ISACA also offers the Cybersecurity Nexus™ (CSX), a holistic cybersecurity resource, and COBIT®, a business framework to govern enterprise technology.
DisclaimerThis is an educational resource and is not inclusive of all information that may be needed to assure a successful outcome. Readers should apply their own professional judgment to their specific circumstances.
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Innovation Insights
© 2015 ISACA. All rights reserved.
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ACKNOWLEDGMENTS
ISACA wishes to recognize:
ISACA Board of DirectorsChristos K. Dimitriadis Ph.D., CISA, CISM, CRISC, INTRALOT S.A., Greece, International President
Rosemary M. Amato CISA, CMA, CPA, Deloitte, Amsterdam, The Netherlands, Vice President
Garry J. Barnes CISA, CISM, CGEIT, CRISC, MAICD, Vital Interacts, Australia, Vice President
Robert A. Clyde CISM, Clyde Consulting LLC, USA, Vice President
Theresa Grafenstine CISA, CGEIT, CRISC, CPA, CIA, CGAP, CGMA, US House of Representatives, USA, Vice President
Leonard Ong CISA, CISM, CGEIT, CRISC, CPP, CFE, PMP, CIPM, CIPT, CISSP ISSMP-ISSAP, CSSLP, CITBCM, GCIA, GCIH, GSNA, GCFA, ATD Solution, Singapore, Vice President
Andre Pitkowski CGEIT, CRISC, OCTAVE, CRMA, ISO27kLA, ISO31kLA, APIT Consultoria de Informatica Ltd., Brazil, Vice President
Eddie Schwartz CISA, CISM, CISSP-ISSEP, PMP, WhiteOps, USA, Vice President
Victor Chapela CRISC, Sm4rt Corp., Mexico
Usha Devarajah CISSP
William S.W. Gee CISA, CRISC, FCA, FKICPA, PwC, China
Norman Marks CPA, CRMA
Gregory T. Grocholski CISA, SABIC, Saudi Arabia, Past International President
Tony Hayes CGEIT, AFCHSE, CHE, FACS, FCPA, FIIA, Queensland Government, Australia, Past International President
Robert E Stroud CGEIT, CRISC, CA, USA, Past International President
Zubin Chagpar CISA, CISM, PMP, Amazon Web Services, UK, Director
Rajaramiyer Venketaramani Raghu CISA, CRISC, Versatilist Consulting India, Pvt., Ltd., India, Director
Jo Stewart-Rattray CISA, CISM, CGEIT, CRISC, FACS CP, BRM Holdich, Australia, Director
Emerging Business and Technology CommitteeJamie Pasfield CGEIT, ITIL V3 Expert, MSP, PRINCE2 Pfizer, UK, Chairman
James Ambrosini CISA, CRISC, CFE, CISSP, CohnReznick Advisory Group, USA
Bhavesh C. Bhagat CISM, CGEIT, ConfidentGovernance.com, EnCrisp, USA
Dan Blum CISSP, Security Architects LLC, USA
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