cio exposed: the latest forecast for management tim dillon associate vice president research idc...

CIO Exposed: The Latest Forecast for Management

Tim Dillon Associate Vice President Research IDC Australia

Copyright 2008 IDC Reproduction is forbidden unless authorized.

All rights reserved.

Copyright 2008 IDC. Reproduction is forbidden unless authorized. All rights reserved.

Forecast for Management 2008Forecast for Management 2008

Tim DillonAVP ResearchIDC Australia

August 2008

©2008 IDC 3

What’s in the Deck?What’s in the Deck?

The Economy

CIO Themes What does the CEO think about IT? IT Budget Allocations IT Spending

CIO Challenges The Digital Universe The annual Top Ten IT Staffing

Future Intent The CIO Radar for the next 12 months The CIO Shopping Cart for 2009

In Summary

©2008 IDC 4

The Economic EnvironmentThe Economic EnvironmentThe Economic EnvironmentThe Economic Environment

©2008 IDC 5

The Economic Environment : The Economic Environment : Rising Inflation, Declining IncomeRising Inflation, Declining IncomeThe Economic Environment : The Economic Environment : Rising Inflation, Declining IncomeRising Inflation, Declining Income

Source: EIU, July 2008

0

5

10

15

20

25

VIETNAM

INDONESIA

THAILAND

INDIA

PHILIP

PINES

CHINA

HONG KONG

MALA

YSIA

SINGAPORE

AUSTRALIA

KOREA

NEW Z

EALAND

TAIWAN

JAPAN

-2

0

2

4

6

8

10

Inflation 2007 Inflation 2008

Change in Disposable Income 2007 Change in Disposable Income 2008

Infl

ati

on

(C

ha

ng

e i

n C

PI)

%

Ch

an

ge

in

Dis

po

sa

ble

In

co

me

%

Change in Disposable Income 2009

©2008 IDC 6

The Economic Environment :The Economic Environment :History RepeatsHistory RepeatsThe Economic Environment :The Economic Environment :History RepeatsHistory Repeats

©2008 IDC 7

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

The Economic Environment : The Economic Environment : The Australian ViewThe Australian View

Dot Com Crash

©2008 IDC 8

The Economic Environment :The Economic Environment :Alternative Sourcing Arrangements…Alternative Sourcing Arrangements…

0

1

2

3

4

5

6

7

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2008

IT Spend as a % of Turnover

IT Spend as a % of Operating Expense

IT Spend outside of IS Budget (% revenue)

©2008 IDC 9

Introducing IDC’s Annual Introducing IDC’s Annual Forecast for Management SurveyForecast for Management Survey

NSW

New Zealand

Victoria

Queensland

Western Aust

ACT, NT, SA & Tas

Random sampling of 363 IT Executives across Australia & New Zealand:

Response by Geographical Segment:NSW - 32%New Zealand -30%Victoria - 13%Queensland 8%Western Australia – 7%ACT, SA, NT & Tasmania -10%

Response by Industry Sector:Finance & Business Services -25%Distribution -24%Public Sector - 20%Leisure & others - 16%Production -15%

©2008 IDC 10

CIO Themes in 2008CIO Themes in 2008

Themes

IT & Business SYNTHESIS

Corporate CITIZENSHIP

INFORMATION is Power

OPERATIONAL Excellence

CUSTOMER is King

©2008 IDC 11

The Good News: The Good News: What CEOs Think of ITWhat CEOs Think of IT

0%

10%

20%

30%

40%

50%

60%

70%

80%

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Contributed toOperationalCapability

Source OfCompetitiveAdvantage

Mixed Record inIT Investments

Disappointed inIT InvestmentReturns

©2008 IDC 12

Back to the Basics:Back to the Basics:“ Show me the Money! ”“ Show me the Money! ”

©2008 IDC 13

IT Budget Allocation & OutlookIT Budget Allocation & Outlook

0%

5%

10%

15%

20%

25%

30%

35%

Last Period (2007)

Current Period (2008)

Next Period (2009)

©2008 IDC 14

Where Did it all Go?Where Did it all Go?2007 Spending2007 Spending

10

9

8

7

6

5

4

3

2

1

Bio-metrics technology

Smart cards

Storage over IP and/or iSCSI

Services Oriented Architecture

IP Surveillance

Radio Frequency ID Tags

Mobile IP

Voice and/or voice over IP

Videoconferencing

Data warehousing / Business Intelligence

©2008 IDC 15

ROI TimeframesROI Timeframes

ROI Timeframes for IT

Under 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years

Don't know

©2008 IDC 16

CIO ChallengesCIO Challenges

©2008 IDC 17

The Growth in Data : The Growth in Data : The Digital UniverseThe Digital UniverseThe Growth in Data : The Growth in Data : The Digital UniverseThe Digital Universe

IDC’s forecast of the digital universe – ie. All the digital data created throughout the globe

First published March 2007; Updated March 2008

Not just about numbers – focuses upon the implications for organisations.

©2008 IDC 18

The Growth in Data : Digital Universe The Growth in Data : Digital Universe Complexity, Confusion & ComplianceComplexity, Confusion & ComplianceThe Growth in Data : Digital Universe The Growth in Data : Digital Universe Complexity, Confusion & ComplianceComplexity, Confusion & Compliance

2007 Study 2008 Study

Data Created 161 Exabytes in 2006 281 Exabytes in 2007

Forecast 988 Exabytes in 2010 1,800 Exabytes in 2011

Creation 70% data created by Individuals

70% data created by Individuals – 50% real, 50% ‘digital shadow’

Geographically speaking

AP low, EU/US High AP rapidly growing in share of content created

Storage In 2007 we create more than we can store

By 2011, half of what we create won’t be stored

Compliance 85% of data created the responsibility of organisations

85% of data created the responsibility of organisations

Vertical Industries TV & Media, Finance TV/Media, Finance, Manufacturing, Retail, Transport, Utilities, Oil/Gas, Government

©2008 IDC 19

The Growth in Data :The Growth in Data :ImplicationsImplicationsThe Growth in Data :The Growth in Data :ImplicationsImplications

Companies face dramatic changes in how they:

Manage Growth – Revenue, Information & Infrastructure

Manage Risk – Data Security, Information Compliance

Manage Effectiveness – Operational Flexibility & Efficiencies

Create New Value – Customers, Markets, Solutions

Time searching for info (hours/week)

5.3

7.3

0

1

2

3

4

5

6

7

8

Internalinformation

Externalinformation

Time wasted

Time searching

Time searching for info (hours/week)

5.3

7.3

0

1

2

3

4

5

6

7

8

Internalinformation

Externalinformation

Time wasted

Time searching

©2008 IDC 20

The Growth in Data : The Growth in Data : Digital ShadowDigital ShadowThe Growth in Data : The Growth in Data : Digital ShadowDigital Shadow

“You have zero privacy anyway …Get Over it” – Scott McNealy, 1999.

Approximately 50% of the information relating to an individual is created by that individual

The remainder is ‘ambient’ content – ie. Digital images on a security camera, information on web searches/browsing; banking databases, etc

Potentially positive implications around tailored services delivery

Major potentially negative implications around security

Either way, significant impact upon Organisations

©2008 IDC 23

CIO Challenges CIO Challenges CIO Challenges CIO Challenges

2008 2007 2006 2005 2004 2003 2002 2001 1996 Change

Reducing costs 1 1 2 2 1 1 1 2 5 4

Meeting users' expectations 2 3 4 4 4 4 4 3 2 0

Developing business case for IT 3 11 10 7 7 7 5 1 1 -2

Keeping abreast of technology 4 5 3 3 13 8 7 4 3 -1

New hardware/software 5 2 1 1 2 3 3 8 7 2

Recruiting and retaining staff 6 6 12 18 15 19 15 16 18 12

Aligning IT with the business 7 4 5 8 3 2 2 9 4 -3

IT staff skills development 8 12 14 13 9 15 10 13 9 1

Manage change/migration 9 7 6 5 5 5 6 6 10 1

Information security 10 17 7 6 6 6 8 17 15 5

©2008 IDC 24

IT StaffingIT Staffing

02468

1012141618

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Operating Period

% s

taff

turn

over Australia

NZ

All survey

Large Orgs

©2008 IDC 25

Top 5 IT Skills in DemandTop 5 IT Skills in Demand

0%

2%

4%

6%

8%

10%

12%

14%

Networking IT ServiceManagement

Help desksupport

Database Enterpriseapplications

©2008 IDC 27

What’s on the Radar for CIOs What’s on the Radar for CIOs in the next 12 months?in the next 12 months?

Business issues that will take priority in the next 12 months:

1. Improve infrastructure of our organization to increase productivity.

2. Improve customer service.

3. Introduce new and/or improved products & services at a faster rate / innovation

4. Gain a better understanding of our customers' requirements

IT Investment that will take priority in the next 12 months:

1. Collaborative Technologies and Knowledge Management (email, document management etc.)

2. Systems Infrastructure (security, storage, network, middleware, serverware etc).

3. Back office: e.g.: Enterprise Resource Management (ERP).

4. Business Intelligence e.g.: Data Warehouse or Data Mart.

©2008 IDC 28

The CIO Shopping Cart in 2009The CIO Shopping Cart in 2009

Technology/Discipline% Actual in use

at start 2008% Forecast use

by start 2010

% Forecast Change in Use - 2008 to start

2010Corporate citizenship 12% 17% 39%Enterprise Architecture Modelling Tool 15% 21% 38%ITIL (Information Technology Library) 18% 24% 32%Virtualisation (eg, VMWare, etc) 22% 28% 30%Green IT Policies & Procedures 27% 33% 24%Workflow management systems 33% 40% 19%ERP / Integrated systems 38% 45% 19%IT services qualification 23% 27% 18%Supply chain management systems 31% 36% 18%Charge back cost recovery for IT services 19% 22% 17%Sales force automation tools & marketing management 31% 36% 13%Online Training, eLearning 33% 37% 13%Document management 60% 67% 11%Customer relationship management systems 44% 48% 9%Benchmarking with external organisations 25% 27% 8%

©2008 IDC 29

In Summary : In Summary : The Business Impact The Business Impact

The expected slower economic growth indicates the need to aggressively focus on

share of wallet & sales-oriented projects

Strategic projects will emerge with the desire to seed for longer term competitive

advantage

Separating the ‘old’ and ‘new age’ corporate stakeholders/decision makers is

critical to effectively position new ITC Services and Deployments

The ‘old’ tends to focus on ‘business as usual’ and traditional ROI

The ‘new age’ wants to see technology ties to business (processes & metrics)

Enterprise 2.0 is at its beginning ‘corporate’ phase, users have already started ‘a

long time ago’

cio exposed: the latest forecast for management tim dillon associate vice president research idc...

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