4 Data-Driven Predictions For IT Innovation - InformationWeek

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3/12/2015
03:23 PM
Chris Murphy
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4 Data-Driven Predictions For IT Innovation

Data from the 2015 InformationWeek Elite 100 companies shows how these digital innovators are using analytics and cloud, and where they could miss the boat.

Each year, InformationWeek releases our list of the Elite 100, a select group of companies that are business-IT innovators. In the process, we survey these top-of-the-class companies on how they address important IT issues such as tech spending, organizational priorities, and strategy.

Our 2015 Elite 100 list of business-IT innovators gets its big reveal at this year's InformationWeek Conference, April 27 - 28, in Las Vegas. But we can disclose now some of the data we've collected from these 100 business-IT leaders about the ways they're approaching hot tech topics such as data analytics, cloud, IT budgets, and digital business.

Here, we share four predictions about IT strategy drawn from the Elite 100. You'll also find information on some of the top-notch speakers who will address these topics at the InformationWeek Conference.

IT will get out of the way of data analytics

Almost half (49%) of these 100 tech leaders let end-users do "what-if" analysis today without IT involvement. Looking ahead, another 39% of companies are piloting or planning to roll out these kind of hands-off analytical tools within a year. That leaves just 12% who don't see this in their future.

That growth for what-if analysis is in contrast to the use of dashboards, which might be leveling off. Usage is high -- half of Elite 100 companies provide dashboards to 50% or more of their employees. But a big minority (29%) have no plans for that widespread level of use inside their company, or consider it not applicable to them.

[ Read about last year's No. 1 InformationWeek Elite 100 company: Pfizer Connects Dots To Deliver Better Treatments. ]

Analytics in general dominates the innovation -- 77% of Elite 100 companies consider using analytics to make better decisions to be among their top three innovation priorities.

At the InformationWeek Conference, ConocoPhillips CIO Mike Pfister and Rich Barclay, Manager of Analytics Innovation, will talk about the company's effort to build a platform for data analytics so that more employees can get involved in analysis. We'll also have data experts from UPS and Kaggle discussing how to get real value out of today's business-world rock star, the data scientist.

Cloud sophistication is rising

"Cloudbursting" is a simple concept that's hard to pull off. The idea is that a company can shift work off its own data centers to a public cloud like Amazon's or Microsoft's if the company gets a spike in computing demand. In the real world, that kind of dynamic shifting has been hard for companies to do.

But we see striking advancement among Elite 100 companies this year. Last year, just 15% of companies could dynamically shift from an in-house data center to public cloud based on demand. This year, 26% said they can do so. Last year, 43% said they had no plans for such dynamic shifting, this year just 31% took it off the table.

(Digging in at the 2014 InformationWeek Conference)

(Digging in at the 2014 InformationWeek Conference)

At the InformationWeek Conference, data center executives from Boeing, eBay, and VMware will discuss the future of the data center. Data center performance isn't a behind-the-scenes engine anymore; it determines how quickly companies can launch new products, and their employees can react to changing customer demands.

IT budgets will stay healthy

Two thirds of Elite 100 companies plan to increase IT spending this year, compared with 2014, and 40% expect to increase spending by 5% or more. Only 13% expect to decrease IT spending, and only 5% expect a cut of 5% or more.

One third of companies spend less than 2% of revenue on IT, while 70% spend less than 5%. Eleven percent spend 10% or more.

Some IT organizations will miss the digital wave

The data isn't glaring on this point since, after all, the Elite 100 are companies leading in digital innovation. However, a couple of data points offer a warning sign for IT departments that aren't close enough to their customers and their products.

We asked IT leaders if their groups are integrated or siloed from other business functions, from finance to product development. For every function, the "siloed" answers came in the single digits.

But for sales and product development, slightly more than one fourth checked the "not applicable" box. Granted, a handful of government agencies are on the list, so perhaps they don't see a function as sales. And maybe there are businesses that don't have formal "product development" groups -- perhaps in healthcare? But every IT organization needs to see its job as creating new products, and driving new revenue. Those that stay solely in the IT comfort zone of cutting operating costs and improving processes will become less relevant.

There is promising data on this front, too. Nearly half (46%) of Elite 100 companies say that introducing a new IT-led product or service is among their top three innovation priorities. Engaging customers in new ways gets cited by 43%, while creating a new business model or revenue stream is at 24%. Just 25% says lowering IT or business costs is in their top three priorities.

At the InformationWeek Conference, Walmart CIO Karenann Terrell will discuss how the IT team is undergoing a major modernization and transformation that puts the customer -- the one probably holding a mobile device -- squarely at the center.

One last data point: 52% of companies say their CIO has official responsibility in the area of innovation. If IT-powered innovation is in your job description -- or just on your mind -- we hope you'll join us at the InformationWeek Conference.

Want to discuss technology strategy with your executive peers? Want to explore digital innovation with the CIOs of Walmart, the NBA, Royal Caribbean, Boeing, eBay, and more? Register now for the InformationWeek Conference, April 27 and 29 at the Mandalay Bay in Las Vegas.

Chris Murphy is editor of InformationWeek and co-chair of the InformationWeek Conference. He has been covering technology leadership and CIO strategy issues for InformationWeek since 1999. Before that, he was editor of the Budapest Business Journal, a business newspaper in ... View Full Bio
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jagibbons
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jagibbons,
User Rank: Ninja
3/17/2015 | 8:55:03 AM
Re: Microsoft all in on Open Compute
I agree, SaneIT, that steady growth is a very good thing. It helps maintain momentum in a sustainable way that one-time bubbles really can't.
SaneIT
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SaneIT,
User Rank: Ninja
3/17/2015 | 8:25:24 AM
Re: Microsoft all in on Open Compute
@jagibbons, yes that 5% is well above inflation at this point so there should be enough money to spend on some projects with a larger reach.  Value driven initiatives are great but growth means you're going to have to grow budgets too.  This isn't another .com bubble coming but steady growth instead which I enjoy seeing again.
Broadway0474
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Broadway0474,
User Rank: Ninja
3/16/2015 | 11:26:38 PM
Re: Microsoft all in on Open Compute
The findings here seem so much more upbeat than the IDG Enterprise big data survey released last week. Whom to believe, whom to believe? In that survey, the momentum behind analytics did not seem nearly as strong.
jagibbons
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jagibbons,
User Rank: Ninja
3/16/2015 | 12:59:09 PM
Re: Microsoft all in on Open Compute
For me, the fact that so many expect their budget increase to be 5% or more is the most positive news. While a sub-5% growth is still growth, that small growth number can easily be eaten up by lower-value activities. Keeping the lights on is very important, but it isn't where IT can drive business value. Without dollars to spend on innovation and other value-driving activities, IT and the rest of the enterprise aren't going to move forward very quickly.
SaneIT
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SaneIT,
User Rank: Ninja
3/16/2015 | 8:39:01 AM
Re: Microsoft all in on Open Compute
@shamika, I think this is the most comforting part of the article.  All the good intentions in the world die off quickly when budgets dry up.  Sure we hear about money saved by pushing some services out to the cloud or through improved analytics but if you don't have the budget to work on those things your IT solutions stagnate. Those potential savings will never even come close to fruition because the far reaching projects will be put off until the budget loosens up a little.  
zerox203
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zerox203,
User Rank: Ninja
3/14/2015 | 6:20:30 PM
Re: 4 Data-Driven Predictions For IT Innovation
All in all, this sounds like a middling year for IT. We have a of solid base of innovation with cloudbursting and analytics,  but it sounds like the big IoT-powered transformations that this infrastructure enables are still a few years off yet. Mixed in with that we have a little more lights-keeping-on than you might expect from the top 100 innovators, with budgets rising slightly and a sizeable chunk admitting that product development is still not a top IT priority at their company. I don't think any of that is a bad thing, mind you. After years of stagnance and an uneasy job market, I think it's even better than we could have hoped. Moreover, while I agree with the 'every business is digital' mantra, these numbers are a reminder that IT is a broad field - we need to be able to deliver that while staying on top of all our existing duties, and it's OK that that balancing act varies by company. It should.

Taking a look at the speakers for the InformationWeek conference next month, it looks like you guys have done a very good job of selecting presenters that compliment each other nicely. The ConocoPhillips CIO and Analytics Innovation Manager together go to show how seriously analytics are taken at such a major company, and how directly they're integrated to top-level decisions. Having someone from Kaggle (an analytics platform developer) and someone from UPS (an analytics platform user) sounds like a great recipe for explaining the technology in-depth while explaining the business case right alongside it. That type of one-two punch is important to get business-side people in the audience interested in working with IT, and helps IT deliver on an oft-repeated goal; integrating more closely with the business. Sounds like a show not to be missed!
shamika
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shamika,
User Rank: Ninja
3/14/2015 | 12:36:31 AM
Re: Microsoft all in on Open Compute
"IT budgets will stay healthy" this sounds interesting. With the new technologies it always better to have healthy budget allocated for IT.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
3/12/2015 | 8:33:28 PM
Microsoft all in on Open Compute
Under your "Cloud sophistication is rising," you note the growing interest in cloud-bursting. Microsoft has jumped in with both feet into the Open Compute Project to further that goal for Azure users. Kushagra Vaid, general manager of the Cloud & Enterprise Group, said in an address Mar. 11: "Microsoft's vision is to drive the consistency between public cloud and private clouds," seeking a common technology platform across both. That would make cloud bursting a lot easier. And that would also mean Azure architecture would reflect a lot of OCP tech initiatives. 
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