Straight Talk Technology
Ovum is often asked what the next "new thing" is, and our answer must always be: "It depends."
The aphorism "If you're going to do something, try to have a reason for doing it," holds thoroughly true for new technologies. The business reasoning for the technology, its fit with goals and vision, and its potential benefits must hold sway, no matter how compelling the tech argument.
Technology on its own is seldom the answer. An organization's competitive readiness may be improved, but the culture and capabilities of the organization, with clear leadership, create the change that will achieve the anticipated benefits.
CIOs should perform four roles in respect of the new technology:
- Assess technologies for their meaning to the organization. (This is especially true when executives arrive on the doorstep with the "next new thing.")
- Draw the attention of the organization to the technology and to the attendant implications (both positive and negative).
- Build a case for the new technology focused on benefits.
- Execute on the new tech, usually by running a proof of concept (PoC), followed by a pilot project, and moving to a full implementation only if the results are positive.
CIOs should manage meaning, attention, the business case, and execution
Each new technology has a unique meaning for the organization. CIOs should scan technology trends and, where appropriate to the organization, extract their meaning. For each technology, CIOs should prepare a "position paper" in which the technology is outlined in terms of its organizational meaning. The meaning of technologies is unique for each organization and often arises from the organization's vision, mission, and goals. In the Ovum report Prioritizing Difficult IT Projects to Ensure Good Executive Decisions, we base the prioritization exercise on "utility factors." These are a distillation of all that is important to the organization, usually reduced to five to seven utility factors. Examples could include new products, customer attentiveness, rapid growth, innovative solutions, and so on. While these may seem to be bland clichés, an intelligent organization imbues these with particular significance and uses them to guide all decisions. They become the shorthand guidance for choosing wise options.
A position paper takes these utility factors, rates the technology against each factor, and in one sentence explains what that score means in organizational terms.
The position paper's utility factor scores for all technologies are then consolidated as shown in Table 1.
Table 1: Ranking new technologies against utility factors
Sample utility factors have been used in this table; each organization's factors should be derived uniquely.
While this table is simple, scoring contribution to utility factors on a scale of 0‒10, it does give good insights into which new technologies will have the most utility to the organization. Executives might be surprised (or even doubtful) that an Agile DevOps platform will affect the organization more than any other new technology. This, however, is the opportunity for the CIO to draw attention to the customer, product, and organization-wide impact that rapid delivery of digital initiatives will create.
It is interesting to note that the last row of Table 1 shows that all new technologies under review have the greatest impact on customer attentiveness and new products. This indicates that growth may be accelerated by the use of new technologies.
The attention of executives is drawn by business opportunities, not by technologies. Once a short list of meaningful technologies has been drawn up, the positive and negative implications for the revenue stream, the organization, customers, and existing platforms should be prepared, presented and debated.
Once the technology is accepted as a concept with which to proceed, a business case should be prepared. The Ovum report Attracting Investment in IT by Accentuating Its Value proposes six types of value for technology, which can help CIOs discuss value in their business case in strategic terms. Table 1 indicates where value and business benefits should be pursued.
Once go-ahead for a new technology is given and the budget is allocated, the CIO should stage its implementation. The first committed investment is only in the PoC. If, and only if, the tech works for the business, then the next investment is directed only at a pilot to demonstrate operational validity and rigor, monetization, and scalability. Once these business measures of success are elicited, then investment in the technology at scale is committed. Each step acts as a business case for the next step or as an indication to change direction or stop the project altogether. In this way, the organization commits funding incrementally, but importantly, the impacts, nuances, and hurdles can be uncovered.
New technologies can and will make a difference depending on the organizational needs
There are numerous new technologies worthy of presentation to the organization. Each technology should be investigated with the organization's objectives and current standing in mind using utility factors as a reference point.
In most cases, these technologies should be mature (gone beyond early adoption phase). Often these technologies go hand in hand with each other.
The organization's platforms, culture, business model, and way of operating will play a part in establishing whether the technology is meaningful. Ovum tracks many technologies, and we believe the following technologies are sufficiently mature, robust, and affordable to warrant consideration:
- Robotic process automation (RPA) technologies are indicated where rules-based, routine, repetitive business processes are stable. The technology reduces costs and improves productivity by up to 30%. Research shows that RPA does not threaten workers and headcount, as it deals with mundane and repetitive tasks, freeing up staff to work on more interesting and complex activities (Lacity & Willcocks, 2015). RPA goes hand in hand with artificial intelligence.
- Artificial intelligence (AI) is a well-developed but continually evolving technology. AI systems are being used right now in healthcare, agriculture, telecommunications, retail, and finance as well as in combination with emergent technologies such as Internet of Things (IoT) systems and analytics for big data. New hardware accelerators allow for more complex, real-time, and data-rich applications such as IoT. Where the organization faces complex challenges and large data streams, AI offers virtual assistance. Where the generation of new insights and new business is required, AI is often used by organizations.
- The IoT allows organizations to sense conditions and events in their operating environment in real time. IoT has uses in almost all public and private organizations where monitoring, automated decision-making, and data collection and analysis are required to generate new revenue, reduce maintenance costs, improve customer services, smooth logistics, and make security smarter. Where a device can be connected, it can act as an IoT device.
- Blockchain technology (also called distributed ledger) is commonly associated with digital currencies and is used as a means of conducting, verifying, and permanently recording transactions without the need for a trusted third party. There is strong potential to use blockchain in IoT for security, identification/authentication, verification, and recordkeeping. Early use cases are likely to include IoT applications in transport, logistics, and agriculture.
- Edge computing is more an operational strategy than a technology. Edge computing is simply a recognition that some things need computing power and storage to be as close to the point of delivery as possible. It significantly decreases the amount of data that must be moved from the organizational edge to a central data processin capability.
Tracking emerging trends and developing technologies is an ongoing task for CIOs. However, knowing about a technology is unhelpful if the CIO cannot attribute organizational meaning and gain the attention of decision-makers.
Prioritizing Difficult IT Projects to Ensure Good Executive Decisions, INT004-000020 (September 2018)
Attracting Investment in IT by Accentuating Its Value, INT004-000023 (November 2018)
Lacity, M C and Willcocks, L (2015) What knowledge workers stand to gain from automation, Harvard Business Review. Available from <https://hbr.org/2015/06/what-knowledge-workers-stand-to-gain-from-automation> [Accessed February 26, 2019]