The Business Case For Digital Transformation

Dan Bieler

Photo: Rebecca Minkoff

Digital transformation investments are ultimately about business survival through disruption. Such investments have a direct impact on customer expectations and go beyond the traditional ROI. The business case for such disruptive investments is the focus of my upcoming report, Build Your Digital Transformation Business Case Around The Customer And Revenue Growth. The scope for disruption spans the entire customer life cycle, affecting everything form the supply chain to after-sales support. The key takeaways from this report:

  • Disruptive transformation must be viewed as a strategic investment. The real value of digital transformation investments relates to long-term revenue growth, not short-term technology ROI. Bolt-on digital projects do not change the fundamental value relationship that you have with your customer. To maximize the impact of digital investments, business and technology leaders must learn to value such investments through the eyes of the company’s customers.
  • A classic ROI calculation is neither always feasible nor desirable for digital investments. Digital transformation changes business processes and models. ROI works for single digital initiatives, but not for shifts in business models. Digital investments aimed at disruptive change across the enterprise challenge traditional ROI calculations. Attributing benefits like customer satisfaction, group productivity, and group revenues — let alone business survival — to a single digital investment is impossible because so much of the impact of digital transformation is cumulative.
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Around the world, strong public cloud platform Leaders mask local complexity and difference

Paul Miller


(Public Domain image taken taken by US Astronaut Terry Virts, Jan. 30, 2015)

Towards the end of last year, Forrester published four tightly connected Wave evaluations. These assessed the 18 most significant providers of public cloud platforms, looking globally, in Australia and New Zealand, in Europe, and in China. Now we’ve published a fifth document, which digs into the trends we observe across all four regions. More on that in a moment.

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Asia Pacific Tech Spending Forecasts: Lackluster in 2017, Acceleration in 2018

Fred Giron

Forrester just released our forecast for business and government purchases of technology goods and services in Asia Pacific (AP) markets. CIOs in the AP region will continue to face a business environment of high uncertainty and modest economic growth in 2017, with 3% growth in tech spending. Better economies in 2018 will push growth closer to 6%. Customers in the region will grow and exert more power, creating challenges that require CIOs to do more — and do it faster. Following are some of the high-level trends by major AP country:

  • Japans slow-growth tech market is Asia’s biggest — but not for long. Japan is expected to spend US$248 billion and on tech goods and services in 2017, which is the largest among all Asia Pacific countries. Measured in yen, growth will be low: 1% in 2017 and 0.4% in 2018.
  • Chinas tech market will continue to shift from hardware to software and services. Forrester projects that China’s tech market spending will grow at 7% in yuan renminbi in 2017 (3% in US dollars). Hardware markets will continue to mature; state-owned enterprises will continue to replace foreign products with local alternatives; and cloud adoption will reduce the need for capital expenditures.
  • Indias tech spending will maintain the highest growth rate in Asia Pacific. India’s total tech purchases will increase by 8% in 2017 and by 10% in 2018 in rupees (5% and 8%, respectively, in US dollars). A robust economy, combined with government-led initiatives like Digital India and Make in India, will spur increased investment in the software, services, and outsourcing segments.
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Public Cloud Providers Embark On A European Building Spree

Paul Miller

A Google data centre in Finland. Image source: Google.
(A data centre in Hamina, Finland. Source: Google)

Not long ago, European customers of the global public cloud vendors relied upon a single data centre ‘region’ for all their cloud computing needs. From Lisbon to Lviv, Kiruna to Kalamata, customers of Amazon Web Services (AWS) and Microsoft Azure sent everything to Ireland, and customers of the Google Cloud Platform (GCP) sent everything to Belgium. And, mostly, public cloud’s early adopters in Europe just got on with it.

For the majority of public cloud workloads, storing and processing data somewhere in the European Economic Area (EEA) really was — and is — good enough. Network latency was mostly low enough not to be a problem, and European regulations covered the main use cases well enough to appease all but the most cautious lawyers.

But connections can always be faster, and there are still use cases in regulated industries and government where keeping personal data inside specific geographic borders is either essential or encouraged. And, more and more often these days, customers just seem to feel happier when their data doesn’t leave the country. Mostly, no law requires it, and no regulation recommends it. But it’s still happening. We should all be pushing back against this odd trend towards data balkanisation, much harder than we are.

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Expectations And Suggestions For Mobile World Congress 2017 Visitors — From An Enterprise Angle

Dan Bieler

Photo: Bergman Group

Between February 27 and March 2, 2017, Mobile World Congress (MWC) will once again take place in Barcelona. Last year, over 100,000 attendees visited the event in search of new insights about “everything mobile.” This year’s MWC theme is "The Next Element" and aims to underline how elemental mobile has become in our everyday lives. I would go further, as I believe that mobility is increasingly treated as a key enabler of the wider digital transformation process. From an enterprise perspective, I expect that during MWC 2017:

  • Process-mobilization debates will gradually replace technology discussions. I expect a little less hype around the features and functions of shiny mobile devices and network components this year. I hope that there will be more of a debate about how mobility can enhance business processes and change business models. Events like Web Summit host more advanced debates about the impact of smart devices on accelerating the business platform economy. MWC 2017 visitors should look for relevant case studies from the likes of GE Digital that underline how these business platforms can support positive business outcomes.
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Skynet is nearing awareness?

Matthew Guarini

In the Terminator franchise, the rise of uncontrollable artificial intelligence (AI) result in threats to the existence of mankind. While the movies provide a stark image of where AI may take us, the risks have a basis in reality. I will leave it to my colleague, Martha Bennett, to talk about the challenges that AI presents to today's tech leaders. Check out her blog here: http://blogs.forrester.com/martha_bennett/17-01-09-reap_the_benefits_while_avoiding_the_pitfalls_the_three_key_challenges_that_could_derail_your_ai_pr.

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In The Digital World, CIOs Need To Help The Business Move Faster

Tim Sheedy
Too many businesses believe that their digital business strategy is actually a roadmap, or a series of IT projects. Being digital is a capability – in your business it impacts the culture, metrics, organization, skills, and finally – the technology.
 
As a CIO, one of the most important roles you’ll play is helping to make the business FAST – removing friction points from processes and enabling new capabilities to be developed as required by the customer, partners, and business stakeholders. Too often technology is one of the (many!) bottlenecks in our ability to quickly meet customer needs or respond to changing or new competitive threats.
 
I recently had the chance to spend some time with some senior technology leaders in Sydney discussing the need for quality when delivering digital business outcomes. With the growing need for speed, many businesses sacrifice quality for speed. This is ok – to an extent – but there are also many companies with their own horror stories of delivering a mobile app that is unstable, a website that is slow, or a connected/smart product that doesn’t work as planned. It can take years to recover from negative feedback and bad mobile app ratings, and poor products can cost millions in ongoing customer support.
 
Unfortunately, QA and Testing have too often been afterthoughts in the rush to Agile development. Your Quality Assurance and Testing practices must adapt to digital business too – testing needs to be able to accelerate development – not slow it down. QA needs to focus on customer needs. The QA team need to speak the language of the customer, get involved with new technology projects at the ideation stage, line up and manage test data before it is required, and empower developers to do much of the testing themselves. 
 
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Reap The Benefits While Avoiding The Pitfalls: The Three Key Challenges That Could Derail Your AI Project

Martha Bennett

It’s been abundantly clear for a while that in 2017, artificial intelligence (AI) is going to be front and center of vendor marketing as well as enterprise interest. Not that AI is new – it’s been around for decades as a computer science discipline. What’s different now is that advances in technology have made it possible for companies ranging from search engine providers to camera and smartphone manufacturers to deliver AI-enabled products and services, many of which have become an integral part of many people’s daily lives. More than that, those same AI techniques and building blocks are increasingly available for enterprises to leverage in their own products and services without needing to bring on board AI experts, a breed that’s rare and expensive.

Sentient systems capable of true cognition remain a dream for the future.  But AI today can help organizations transform everything from operations to the customer experience. The winners will be those who not only understand the true potential of AI but are also keenly aware of what’s needed to deploy a performant AI-based system that minimizes rather than creates risk and doesn’t result in unflattering headlines.

These are the three key challenges all AI projects must tackle:

  • Underestimating the time and effort it takes to get an AI-powered system up and running. Even if the components are available out of the box, systems still need to be trained and fine-tuned. Depending on the exact use case and requirements for accuracy, it can be anything between a few hours and a couple of years to have a new system up and running. That’s assuming you have a well-curated data set available; if you don’t, that’s another challenge.
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Slow 3% To 4% Growth In Global Tech Market In 2017 And 2018 Due To Cloud Transition And Political Uncertainties

Andrew Bartels

In our just-published forecast for the global market for business and government purchases of technology goods and services (The Global Tech Market Outlook For 2017-2018: 3% to 4% Growth As Forces Of Disruption Battle With Forces Of Continuity), Forrester is projecting modest growth of 3.2% in 2017 and 3.9% in 2018 measured in constant currencies.  With the US dollar strengthening against most currencies in 2017 but likely to lose ground in 2018, global tech market growth in US dollars will be 2.8% in 2017 and 4.7% in 2018.

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Tell Your Board How Business Technology Will Help Win Customers

Matthew Guarini

Customers are more powerful than ever, and nothing is slowing that trend. Your Board is the primary body for setting, monitoring, and adapting strategy. Ensuring that the Board, and the C-suite,  is equipped with the proper insight and knowledge is a requirement. Research shows that CEOs rank technological change as the second-most-pressing factor for companies after economic factors. While the recognition of technology as a differentiator is a positive trend, CEOs cite concerns with the ability of their teams to handle this emerging future. Additionally, other research shows that Board members lack the knowledge and skills necessary to understand, develop, and implement tech-based strategies.  

Our latest report dives into these issues and provides recommendations that hit on strategy, cloud, budgeting and funding, cybersecurity, and innovation. We talk about the importance of getting on the Board’s standing agenda and using your tech and business credentials to drive credibility and support across the enterprise. CIOs who seize the day will help their firms, team, and selves succeed.

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