A new type of infrastructure needs to be built that is not just going to reshape business but also the way people live, according to Gartner.
CIOs are the builders of this infrastructure, which Gartner calls the “civilisation infrastructure”.
The analyst firm forecasts worldwide IT spending to total $3.4 trillion in 2016, a 0.3% decline from last year. In 2017, global IT spending is projected to grow 2.9% and reach $3.5 trillion.
Analysts said this growth will be driven by the software and IT services segments. Worldwide spending on software is projected to grow 7.2%, and IT services 4.8%. Software and IT services will be key to the development of the civilisation infrastructure.
This civilisation infrastructure will be the most important thing IT accomplishes in the next decade, according to Peter Sondergaard, senior VP and global head of research at Gartner.
“Civilisation infrastructure will forever change the way people engage socially, digitally and physically through connected sensors and digital intelligence,” he said. “CIOs will participate in the building of a new digital platform with intelligence at the centre.
“That platform will enable ecosystems, connecting businesses and collapsing industries. It will change society itself, and the way people live.”
This civilisation infrastructure will be a new digital platform that extends beyond traditional IT infrastructure using new technologies not familiar to the typical IT department.
“Your new digital platform will allow you to participate in the evolving world of business, government, and consumer ecosystems because ecosystems are the next evolution for digital. It’s how you compete at scale,” said Sondergaard.
The new digital platform consists of five domains: traditional IT systems, customer experience, the Internet of Things (IoT), intelligence and the ecosystem foundation.
“Each of these domains are interconnected and interdependent,” said Sondergaard. “All have a role, and all are required. Your new digital platform will allow you to participate in the evolving world of business, government, and consumer ecosystems. Because ecosystems are the next evolution for digital. It’s how you compete at scale.”
Here is further insight into the five elements of the new digital platform.
1. Traditional core IT systems
This is how CIOs run and scale operations. It’s building on what’s already been built. It’s taking high performing traditional IT systems (such as the data centres and networks) and modernising them to be part of the digital platform.
For example, leading organisations are halfway through the transition to the cloud. It started with sales and marketing, and now half of sales-support capabilities are in the cloud. This migration will continue through the end of the decade into functions such as HR, procurement and financial management.
“You now need to make cloud, mobile, social and data your core capabilities while investing in resilience, business continuity and disaster recover, insight and outside in a hybrid approach,” Sondergaard said.
2. Customer experience
This is how CIOs connect and engage in new ways. The digital customer experience may be the only one that the customers have. This is how the business engages in the digital world. The pioneers are exploring how new experiences such as virtual and augmented reality will change the way customers engage.
“In the world of chatbots and virtual personal assistants, your mobile apps, and even your web presence, will be much less relevant,” Mr Sondergaard said. “The new competitive differentiator is understanding the customer’s intent through advanced algorithms and artificial intelligence. Creating new experiences that solve problems customers didn’t realise they had.”
3. The Internet of Things
This is how the organisation senses and acts in the physical world. Adding devices to the IoT domain is the easy part. Processes, workflows and data integration are much harder. In fact, two-thirds of organisations have had to rework their existing IT systems to accommodate IoT.
IoT also changes how CIOs should invest in analytics because decisions must move from days to minutes to instant. CIOs should plan to shift their investments in analytics to real-time. Real-time analytics will outpace traditional analytics by a factor of three by 2020 to become 30% of the market.
This is how the systems analyse, learn and decide independently. CIOs start with traditional data management, data science and data intelligence. Algorithms determine the action. The new type of intelligence, driven by machine learning is artificial intelligence.
“We are building machines that learn from experience and produce outcomes their designers did not explicitly envision,” said Sondergaard. “Systems that can experience and adapt to the world via the data they collect. Machine learning and artificial intelligence move at the speed of data, not at the speed of code releases. Information is the new code base.”
5. Ecosystem foundation
This is how the organisation interacts as an institution in the digital world. Ecosystems go beyond the capability to decide – CIOs need to build the capability to interact with customers, partners, adjacent industries, even your competitors. The ecosystems allow for the transformation from traditional business with linear value supply chains to networked digital ecosystem businesses.
“Many industry models will transform with digital ecosystems,” said Sondergaard. “Moving from simple relationships run by intermediaries toward distributed partnerships managed by a shared distributed ledger system like blockchain. Building a strong ecosystem will help you manage the transition. Ecosystems are the future of digital.”