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IDC SEE Forum 2015 September 16-18

Hotel Royal, Opatija

IDC SEE Forum Survey 2015

7%

21%

29%

21%

22%

Spending on "Build" and " Transform" Type Projects

Shadow ITRun and funded by businessRun by the IT and business - funded by businessRun by IT and business - funded by ITRun and funded by IT

▪ Business funds 57% of the spending on building new IT solutions or transforming existing ones. Therefore, business leaders and lines of business (LOB) have a strong influence on the direction of IT development and what business value should be delivered by IT.

▪ IT has to adapt to the situation by becoming more business oriented, improving its relation to and communication with business lines, as well as its responsiveness to the needs coming from business.

▪ The sizable portion of shadow IT spending (6.6%) gives business lines and the individual user the freedom to purchase IT without the time- and resource-consuming procedures of coordination with IT. While this gives business quick access to new external IT delivery models and innovative IT functionality, in the longer run, it may lead to undue complexity, lack of IT cost control, and security and governance issues.

IT Spending Ownership

N=94

Source: IDC SEE Forum Survey 2015

▪ The priorities of IT departments in SEE reflect the increasing influence of business over the role of IT in the enterprise. The top five goals represent a mix of emerging, business-driven priorities (e.g., IT and business alignment, use of company data, improving the enterprise architecture) and more traditional IT goals (e.g., improving the business process, work effectiveness).

▪ Less than 10% of CIO respondents see innovation and transformation as the primary role IT has to assume in their companies. This is evidence that few companies in SEE have embarked the digital transformation journey and, in many cases, IT is regarded as a supportive rather than a strategic company function.

▪ Value extracted from company information is increasingly becoming the hard currency that IT and only IT can provide the business, representing the third most important strategic priority for SEE CIOs.

Strategic IT Priorities

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Executing change and transformation projectsSupporting costs efficiency throughout the enterprise

Reducing IT costsSupporting sales and customer acquisition

Enabling new innovationsIncreasing company competitiveness

Ensuring operational continuityImproving enterprise architecture

Improving workforce efficiencyUsing company information/data more effectively

Improving/Redesigning business processesStrengthening IT and business alignment

Strategic Priorities of the IT Organization

1st 2nd 3rd

N=102

Source: IDC SEE Forum Survey 2015

0% 10% 20% 30% 40% 50% 60%

Utilizing a standard framework for IT managementManaging IT quality and testing software

Developing an IT governance modelRenewing IT operational models

Developing the business skills and competences of IT personnelDeveloping IT department's internal processes

Monitoring IT performanceDeveloping technology skills and competences of IT personnel

Improving IT project managementIncreasing the flexibility of IT

Aligning business and IT architectureIncreasing the role of IT in business development

IT Management and Process Focus Areas

1st 2nd 3rd

▪ Operative, day-to-day IT management and process improvement efforts are mirroring the strategic aim to better align IT with business. Focus areas rooted in the internal operations of the IT department, such as developing technology skills, monitoring IT performance and developing internal processes rank behind business-related management and process issues, such as increasing the role of IT in business development, aligning business and IT architecture, and increasing the flexibility of IT.

▪ Each of the top three priorities in this regard leads to specific challenges that CIOs need to solve. Increasing the role of IT in business development requires a new, business-savvy attitude to understand numerous initiatives and processes, as well as a drive to explore and demonstrate the business value of new IT solutions. Aligning IT architecture to business goals requires a deeper reengineering of the IT architecture, processes, and investments in core IT systems. Increasing flexibility involves IT management issues, such as processes ensuring quick response time to business needs, faster implementation of new IT solutions, and the ability to quickly redeploy IT capacity and skills and human and financial resources. All in all, wisdom, talent, and money are needed to make the transition possible in day-to-day operations.

▪ IT project management continues to represent main internal challenge to be solved for most IT departments.

IT Management and Process Improvement

N=100

Source: IDC SEE Forum Survey 2015

▪ Enterprise applications, application consolidation, and datacenter consolidation represent the core of SEE companies’ IT strategies.

▪ 3rd-Platform technologies, such as big data/analytics, mobile apps, and private cloud, which represent the emerging IT trends in more developed markets, come second. Nonetheless, they are perceived as strategically imperative by 25–40% of the companies. These areas are already attracting the attention of today’s CIOs and are prime candidates for medium-term growth.

▪ Many SEE companies seem to be rejecting the use of external IT delivery models, as more than 50% of them regard outsourcing, public cloud, and industry platforms (XaaS) as a distraction, a potential hurdle, or simply not applicable to their operations.

▪ Enterprise social collaboration, IoT, M2M, connected products, and smart operations represent some of the most recent and innovative IT concepts, which already resonate with a sizable segment of the SEE CIO community. These are the technology areas to watch in the future.

Perception of Emerging IT Trends

N=99

Source: IDC SEE Forum Survey 2015

0% 20% 40% 60% 80% 100%

Public cloud

Outsourcing applications

Vertical cloud/Industry platform aaS

Outsourcing infrastructure

Internet of Things/Connected products

Smart operations/M2M integration

Enterprise social collaboration

Private cloud

Mobile apps

Elevated security/Cyber security

Analytics and Big Data

Data center consolidation and virtualization

Application consolidation

Enterprise application (ERP, CRM, etc.)

Importance of IT Trends

Strategically imperative Necessary for maintaining position

Distraction and potential hurdle Not applicable

▪ Two in five companies are expanding their IT budgets (2015 vs. 2014) in order to execute strategic priorities that include closer alignment of IT with business and improving company processes. The remaining companies, however, are facing a double challenge: flat or decreasing financial resources coupled with increasing expectations from business lines in terms of what is required from IT.

Means for IT Development - IT Budgets

0% 10% 20% 30% 40% 50%

Decrease by 20% or more

Decrease by 10–19%

Decrease by 10% or less

Stay the same

Increase by 10% or less

Increase by 10–19%

Increase by 20% or more

IT Budget Dynamics 2015

N=95

Source: IDC SEE Forum Survey 2015

▪ Zooming in from strategic goals to shorter-term 2015 investment priorities, traditional IT areas dominate priorities. The top investment area is related to datacenter infrastructure, followed by better usage of enterprise data as a core driver of competitiveness, followed by investments in transactional ERP systems.

▪ The weighty but not particularly innovative IT budget areas related to IT infrastructure (datacenter, IT security, client infrastructure) continue to demand a great deal of attention from CIOs and consume a big chunk of their IT development funds. Any opportunity to rationalize the investment or operational costs in that area could represent a step forward in spending on higher-business-value IT, such as applications.

▪ Software investment focus seems to be equilibrated between applications supporting back-office process (ERP and others) and leveraging the data assets of the company (big data/analytics, BI).

▪ Security never seems to go off CIO’s radars. Intensifying cyber-crime, cyber-espionage, cyber-war, and cyber-terrorism activities keeps IT security at the top of investment lists at many companies.

Means for IT Development- Top IT Investment Areas

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Biometrics and identity managementMobility infrastructure

IoT/M2M solutionsData lifecycle management and archiving

Other front-office applicationsNetworking, UC and videoconferencing

Other back-office applicationsPaperless office/processing

Mobile application/website developmentWorkflow, collaboration and productivity

Document and content managementCRM and SFA

Databases and data warehousesDatacenter management and virtualization

Client infrastructureIT security

ERPBusiness intelligence/Big Data /Analytics

Datacenter infrastructure

Top 3 IT Investment Areas

N=94

Source: IDC SEE Forum Survey 2015

▪ While leveraging enterprise data assets ranks as one of the top three strategic priorities of IT in SEE, slightly more than half of the companies have a weak data infrastructure in place, limited datawarehouse and analytics implementations, and no enterprise-wide solutions.

Data Culture

3%10%

40%30%

17%

Data Culture Status

Systems are not integrated and data is in short supply or unreliable.

Data is missing and systems are poorly integrated.

Data warehouse initiatives are under way and some analytics tools are available.

Data is of high quality and enterprisewide solutions have been developed.

The business has implemented an enterprise-wide architecture that is already generating good results.

N=98

Source: IDC SEE Forum Survey 2015

▪ The lack of a comprehensive strategy and the lack of knowledge of creating business value are equally strong inhibitors of more active use of enterprise data.

▪ One third of the respondents are complaining about high investments costs, while most companies can properly handle data quality or availability issues.

▪ Proving ROI of BI and analytics projects represent an inhibitor at less than one in five companies.

Data Culture Challenges

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

The lack of C-level support from business

Problems in proving the ROI of BI and analytics investments

The volume of the data available

The lack of BI and analytics skills

The quality and relevancy of the data available

The high investment needed to developed our BI and analytics systems

The lack of a company-wide data culture

The lack of knowledge on how to create business value with the data

The lack of a comprehensive strategy for more effective usage of data

Data Culture Challenges

N=98

Source: IDC SEE Forum Survey 2015

▪ The major drivers of enterprise mobility in SEE are confined to traditional advantages such as supporting mobility of management and of workers or operations in the field. However, one third of the companies have realized that mobility represents a new channel for sales.

▪ A sizable share of the surveyed companies also believe that mobile apps are a “must have” or represent a competitive differentiator in their industry.

Mobility Drivers

N=98

Source: IDC SEE Forum Survey 2015

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

To partner with 3rd party firms that may generate leads for our businessNo current plans

Part of larger strategy related to M2M and/or Internet of thingsUsing apps for branding/marketing

Customers/partners requesting or demanding itTo better track workflows

Customer-facing app now 'expected' in our industryTo get ahead - mobile apps are still a differentiator in our industry

To provide basic mobility functions (email, web access, calendar) for staffTo enable remote access to key systems

Mobile apps open a channel for additional salesTo support fieldwork or operation processes

To support the mobility of the management level employees

Mobility DriversMobility Drivers

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