idc nordics - directions 2015 digital transformation services and sourcing

#IDCDirections

Digital Transformation in Nordics: Implications for Solution Providers

Johan HallbergResearch Manager, IDC Nordic

@JohanHallberg

#IDCDirections © IDC 2015 2

____of Nordic organizations

have gone through a major

IT re-organization in the last 12

monthsIDC Nordics IT Executive Survey. April 2014, n=101

36%


Top corporate priorities: omni-channel, mobile first

Driving end-to-end process transformation from mobile marketing to fulfilment

New devices will drive new applications

EverywhereEmployees

EverywhereCustomers

EverywhereCommerce

EverywhereEmployees

EverywhereCustomers

The Race to Digitize


Application modernization

Legacy outsourcing contracts

Datacenter strategies and security

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=QkOsbbJ-FHdJJM&tbnid=WDrcoqBMQ2lmvM:&ved=0CAUQjRw&url=http://personaaffairs.wordpress.com/2013/08/20/do-you-have-a-ball-chain-resume/ball-and-chain/&ei=0QmXU5gyw986pZSB-Ac&bvm=bv.68445247,d.ZGU&psig=AFQjCNG_muWJbkR8SLTzDNxCFqT6a6TGhw&ust=1402493769684934


%6According to IT

Percent of Technology Spending that is Shadow

Source: IDC Business Technology Study, May 2014 and IDC CIO Sentiment Study, January, 2014

According to Business:

Percentage of technology spending that is shadow

%6 %6IAccording to

IT:Percentage of technology spending that is shadow

6Shadow IT: What Your Clients Do Not Know Will Hurt Them


The 3rd Platform is a business platform

Businesses are transforming: How they engage with customers How they innovate around

products and services The reliability of their operations Their overall resiliency

Is our enterprise strategy moving to subscription /

task based offerings?

Are suppliers ready to support transition from legacy platforms to the

3rd Platform?Can we deliver value to customers 24/7 – when and where they need it?


End-users internal assessment questions when deciding who to partner with:

Which vendors & suppliers are

strategic to my business?

How are my suppliers

performing against my business goals?

How do I measure business value?

Do we have any risk or compliance

issues with suppliers?

Can I trust my suppliers and vendors with

innovative ideas?


Understand Supplier Capability for the 3rd Platform – Asking these Questions:

Do suppliers/vendors understand our business in the 3rd Platform context?

Can my supplier provide resources trained for the 3rd

Platform?Do they understand

contractual implications of the 3rd

Platform?

Are they keeping up with rapidly changing

technology eco-system?

Are there emerging suppliers that should

be considered?


IDC Nordics IT Executive Survey. April 2014, n=101

In ___ of Nordic organizations, the

business has become more involved in IT

strategy

56%


IT’s role in the Nordics

17%

46%

37% IT is a significant source for competitive advantage for the organization.

IT is a steady contributor to ongoing operational effec-tiveness in the organization

IT is mainly a support orga-nization and does not di-rectly contribute to the over-all business outcome

Source: IDC 2014 - Nordic CxO Study


By 2017, Less than Half of IT Organizations Will Still Be Centralized . . .

Source: 2013 SIM International, IT Trends Survey; N=280


IDC Digital Transformation Playbookfor the Nordics in 2015

3 Areas to ‘Re-Think’ As

a Solution Provider


1 Re-thinking Your

Account Engagement

Approach



Risk-management contracts Run

BuildBuy

Short-term focusTransactional model

2nd Platform Vendor Sourcing Models

Trusted relationship contracts Data-driven management

IntegrateAcquire capabilityLong-term outlookRelationship model

3rd Platform Vendor Sourcing Models

3rd Platform Requires a Different Sourcing Model


Enterprisearchitecture

Businessintelligence

and Analytics

ITmanagement

andexecutives

Security Mobiledevelopment

Socialdevelopment

Socialcommunity

administrators

Dataarchitecture,management,and Storage

Servicemanagement

Projectmanagement

For each role, indicate how difficult it is to hire suitable candidates:

Moredifficultto hire

Easierto hire

The 3rd Platform Will Create a Skills GapThe 10 Most Difficult IT Positions to Staff

Source: IDC CIO Summit, April, 2014


Vendor and Sourcing Management

Innovative Sourcing

Senior management-level VSMO executive provides single point of contact, spearheads Center of Excellence and drives innovation from suppliers. Executive management champions enterprise-wide governance framework.

Random Acts of Sourcing

No formal vendor and sourcing management organization, vendor selection and contracting processes, or governance framework

Formalized Sourcing

Formal vendor and sourcing management office (VSMO) and localized strategy. Governance, vendor selection, and contracting processes defined, but adoption is limited and localized.

Process Based Sourcing

VSMO manager lacks enterprise-wide management responsibility. Vendor selection and contracting processes defined and universally adopted. Selective adoption of formal governance framework.

Enterprise Wide Sourcing

VSMO executive has enterprise-wide management responsibility. Vendor selection process and contracting process defined, consistent, and universally adopted. Executive management conditionally endorses enterprise-wide governance framework. VSMO drives value beyond pricing.


Nordic Sourcing is immature!

Innovative Sourcing

Senior management-level VSMO executive provides single point of contact, spearheads Center of Excellence and drives innovation from suppliers. Executive management champions enterprise-wide governance framework.

Random Acts of Sourcing

No formal vendor and sourcing management organization, vendor selection and contracting processes, or governance framework

Formalized Sourcing

Formal vendor and sourcing management office (VSMO) and localized strategy. Governance, vendor selection, and contracting processes defined, but adoption is limited and localized.

Process Based Sourcing

VSMO manager lacks enterprise-wide management responsibility. Vendor selection and contracting processes defined and universally adopted. Selective adoption of formal governance framework.

Enterprise Wide Sourcing

VSMO executive has enterprise-wide management responsibility. Vendor selection process and contracting process defined, consistent, and universally adopted. Executive management conditionally endorses enterprise-wide governance framework. VSMO drives value beyond pricing.

25%

51%

10% 9%5%

Less then 1/4th of Nordic organisations are even at a repeatable stage of its sourcing efforts. This means it will be up to the vendor

to educate and fight time after time!

Formalized but local sourcing

Random actsof sourcing

Process basedsourcing

Enterprise widesourcing

Innovativesourcing

Source: IDC 2014 - Nordic CxO Study


2 Re-thinking Your

Account Segmentation Model



Managed

Business InnovationEffective partnership between business and IT around 3rd Platform implementations allows organization to outpace competitors through the use of 3rd Platform

Opportunistic

2nd Platform ITUncoordinated efforts between business and IT around 3rd Platform implementations; limited progress toward 3rd Platform adoption

Ad Hoc

Core ITNo effort between business and IT to coordinate or incorporate 3rd Platform technology

Repeatable

3rd Platform ITCoordinated efforts between business and IT around 3rd Platform implementation allow organization to keep pace with peers in 3rd Platform adoption

Optimized

Business TransformationHighly orchestrated interaction between business and IT around 3rd Platform implementations, enabling a world-class organization with lasting competitive advantage driven by 3rd Platform transformation and an organization that has embraced it.

Opportunistic


Managed


Source: IDC, Enterprise IT Transformation Maturity Model, 2014

Ad Hoc


Repeatable


Optimized


Transforming to a Business Innovation IT OrgIDC’s Enterprise IT Transformation Maturity Model


Managed


Opportunistic


Ad Hoc


Repeatable


Optimized


15%

BusinessInnovation

6%

Core IT4%

BusinessTransformation

Are Your Clients Transforming their IT Orgs Fast Enough?

67% of Organizations are Operating at a2nd Platform IT or 3rd Platform IT Transformational Stage

40%

2nd PlatformIT

27%

3rd PlatformIT

Source: IDC's Enterprise IT Transformation MaturityScape Benchmark Study, August, 2014. n-156


But Maturity Models are all about Business Outcomes

Core IT

No effort between business and IT to coordinate or incorporate 3rd Platform technology

2nd Platform IT

Uncoordinated efforts between business and IT around 3rd Platform implementations; limited progress toward 3rd Platform adoption

3rd Platform IT

Coordinated efforts between business and IT around 3rd Platform implementation allow organization to keep pace with peers in 3rd Platform adoption

Business Innovation

Effective partnership between business and IT around 3rd Platform implementations allows organization to outpace competitors through the use of 3rd Platform

Business Transformation

Highly orchestrated interaction between business and IT around 3rd Platform implementations, enabling a world-class organization with lasting competitive advantage driven by 3rd Platform transformation and an organization that has embraced it.

Business Outcome IT provides inconsistent performance and basic IT essentials to support core business functions

Business OutcomeIT provides cost-effective, secure, reliable 2nd Platform operations to run the business

Business OutcomeIT delivers services that enable business goals such as profitability and customer loyalty

Business OutcomeIT services enable business to innovate and achieve market leadership

Business OutcomeWorld-class IT services support business to achieve dominant market position through sustainable competitive advantage

TASK of the year! Ask you customers –

Based on Market Imperatives, Where Does Your Enterprise Need to Be?



3 Re-thinking your Joint

Innovation Strategy with Clients


IT-enabled Services

Transforming Business Processes

IT-enabled Business Processes

Automating Business Processes

IT-enabled Products

Creating IT-enabled Products

Use Case: IT-enabled Processes, Services & Products is our End Game


62%

IT-enabled Products

Creating IT-enabled Products

IT-enabled Services

Transforming Business Processes

IT-enabled Business Processes

Automating Business Processes

18%20%

Innovation Requires Stepping Out of Our Comfort Zones

Source: IDC 2014



3 Areas to ‘Re-Think’ As

a Solution Provider during 2015

1. Your Account Engagement Approach2. Your Account Segmentation Model3. Your Joint Innovation Plan with Clients

Questions?

27#IDCDirections © IDC 2015

Johan HallbergResearch Manager, IDC NordicNordic Services and SourcingGlobal IT Buyers Research Program

[email protected]+46 703078873 @JohanHallberg

mailto:[email protected]