201311 High performers in IT: Defined by Digital. Accenture High Performance IT research
- 1. High Performers in IT: Defined by Digital consulting | Insights from Accenture’s fourth technology | outsourcing High Performance IT research
- 2. CONTENTS INTRODUCTION 1 INSIGHTS 01 It really is all about the customer 02 Context is the “once and future king” 03 IT strategy and business strategy are one and the same 3 7 9 04 Mastering a hybrid IT environment 11 05 Diving deeper into digital 15 06 Empowered employees are the force for digital business 07 Mastering data to drive outcomes creates competitive advantage 23 08 Adopting agile to become agile 27 09 Investing early in technology skills provides an edge 31 10 The marriage of IT security and business risk 33 CONCLUSION 36 ACCENTURE Profile of a High Performer 38 How Accenture measures High Performance 39 About the research report 19 40 # D i g i t a l IT
- 3. INTRODUCTION High performers in IT are consolidating the noticeable lead that they have opened up in recent years. Not only are they finding novel ways to optimize— holding down costs and streamlining processes across their organizations—but they are also actively driving innovation and top-line growth. Increasingly, they are central to their organizations’ strategic directions— and increasingly, those directions are defined by digital. Here are the highlights of Accenture’s fourth High Performance IT research, with the digital dimension clearly visible. H i g h P er f o rm a nce IT re s e a rch 1
- 4. Take charge of your digital journey. That gap persists today, as the high performers, more in tune with the business than ever, look to That’s probably what high-performing CIOs would all things digital to upgrade a host of processes tell their peers if they weren’t so busy propelling and to catapult their organizations forward. their own businesses toward the digital future. Increasingly, they are using digital tools and systems to push for excellence across all three These high performers clearly see IT as a strategic asset that can help them renew vital aspects IT agility, and IT execution. Here’s how Verizon of their operations—optimizing at least and Wireless’ CIO, Shankar Arumugavelu, describes innovating at best. They are investing in the that push: “Technology trends like mobile, cloud, digital tools, capabilities, and skills to more easily social media, and big data have moved beyond pinpoint useful data, evaluate it, excerpt it, the experimentation stage. Any business that analyze it, derive insights from it, share it, uses these trends to drive market differentiation, manage it, comment on it, report on it, and, growth, innovation, profitability is what I most important, act on it. 2 dimensions of High Performance IT: IT innovation, consider a digital business.” What a difference a decade can make. The digital direction seemed like such an impractical notion not long ago. In 2005 and 2006, Accenture’s High Performance IT research was describing the typical CIO’s austerity trap, in which cutting costs only prolonged dependence on legacy systems. By the start of the global economic High performers are using digital tools and systems to push for excellence across all three dimensions of High Performance IT: IT innovation, IT agility, and IT execution. crisis, high performers had begun to take a strategic approach to cutting costs, breaking with their legacy roots. By 2009, there was a definite This report captures the highlights of Accenture’s performance gap between the high-performing High Performance IT research and shows how a CIOs and the rest. digital “thread” now runs throughout most of them. Let’s consider the top ten findings and describe what we mean. ACCENTURE # D i g i t a l IT
- 5. 01 02 03 04 06 07 08 09 INSIGHT 01 It really is all about the customer High performers’ business objectives are very different from those of others. While most organizations continue to be internally focused on cost, productivity, and processes, high performers’ foremost objectives are related to improving the customer’s experience. Indeed, Accenture’s research found that the high performers’ top three business priorities related to ensuring that their IT investment strategies were linked to their customers. (See Figure 1.) They are concerned about providing the right information to the right person—customer, partner, or employee—at the right time; they are seeking better ways to interact with their customers; High Performance IT research 3
- 6. and they are keen to deliver new services or products to them. Further emphasizing the point: in organizations that weren’t high performers, these customer issues had a much lower priority. In 2008, our research revealed that, in terms of technical and business adequacy, customerfacing systems were among an organization’s poorest-performing applications. Five years later, our research shows once again that the end customer is last in line outside the CIO’s door at most organizations. (See Figure 2.) Moreover, the enterprises we surveyed told us that they actually spend slightly less on customer-related applications than they do on other applications. Yet high performers understand that customers— including consumers, business customers, and 4 citizens, in the case of government—are expecting the same, if not better, experience, speed, detail of information, and flexibility that they get from their personal technology. They ensure that customer-facing applications are meeting their business and technical needs. The digital direction is all too clear in leading companies’ relationships with customers. They understand that technology, which has created frustration and corroded relationships with customers, is now at the point at which buyers can again be treated as individuals. “Today’s technologies allow businesses to be more predictive around consumer preference and consumer behaviors,” says Bill VanCuren, CIO of NCR Corp., the global consumer transaction technology company. “They give the consumers more choice not just in what they’re buying but in the channels through which they’re transacting.” 1 4 FIGURE 1 High performers’ top three business objectives are related to customers Ranking importance of business objectives to CIOs’ IT investment strategies HIGH PERFORMERS OTHER ORGANIZATIONS 4 Providing the right information to the right person at the right time 2 5 Finding better ways to interact with customers 3 6 Delivering new services or products to customers 4 1 Cutting business operational costs 5 2 Increasing workforce productivity 6 3 Automating core business processes 7 7 Supporting our business innovation process 8 9 Supporting geographic expansion 9 ACCENTURE 1 8 Securing our intellectual capital and company information # D i g i t a l IT
- 7. Companies now have rich channels through which they can communicate with customers in much more personal ways: not only do they found a considerable gap between the high now have unprecedented opportunities to track performers and others in this regard: nearly what people are saying about them, but they can one-third of high performers’ customer also leverage digital technologies to create and interactions are already completely self-service, sustain relationships that will result in customer with seamless interfaces across channels (for acquisition and, for current customers, repeat sales. example, mobile, social media, and the Web); the comparable figure for other companies is only Commonwealth Bank of Australia understands about one-fifth, or 21 percent. The goal of the this. The bank has transformed its IT approach with exemplars is to push this up to 56 percent as soon a focus on moving from “product” to “relationship” as possible. Other companies don’t have such value. Every decision the bank has made in the ambition: they expect to raise the bar only to course of modernizing its core banking platform 43 percent of customer interactions in the future. has been driven by a focus on customer experience and real-time relationship value.1 5 Aside from digital’s impact on how customers feel, it is also helping IT departments optimize business processes and cut costs. Our research FIGURE 2 Are your applications currently meeting your business and technical needs? HIGH PERFORMERS applications 5.0 Meeting needs Meeting needs 4.0 Industry Specific Human Resources Finance & Accounting Supply Chain Operations Customer Service Sales & Marketing 4.0 TECHNICAL NEEDS TECHNICAL NEEDS front-office OTHER ORGANIZATIONS 5.0 3.0 2.0 3.0 2.0 3.0 BUSINESS NEEDS 4.0 5.0 portfolio’s best performing applications in terms of technical adequacy—and the poorest for all 2.0 1.0 are among their and business other organizations Meeting needs 1.0 High performers’ Meeting needs 1.0 1.0 2.0 3.0 4.0 5.0 BUSINESS NEEDS High Performance IT research
- 8. 50 % of high performers explore future economic, geopolitical, social, and business scenarios as part of IT creative processes. 6 ACCENTURE # D i g i t a l IT
- 9. 02 03 04 05 07 08 09 10 INSIGHT 02 Context is the “once and future king” High performers do not view things in isolation. Exploring a wide range of business scenarios—for instance, economic, geopolitical, and social—is part and parcel of their IT planning processes. The latest High Performance IT research reveals that during IT planning, high performers’ enthusiasm for exploring business scenarios within the overall economic, geopolitical, and social context is five times that of other organizations. (See Figure 3.) High Performance IT research 7
- 10. That means that they actively listen to and understand their fellow executives’ issues from a business viewpoint; they don’t see the world It’s clear that high-performing CIOs have solely through IT glasses. They also make it their mastered these business-savvy requirements—and business to seek out wider perspectives, and they it is interesting to note that they have been in expect the same of their top lieutenants. This their positions longer than the average CIO. They allows high performers to add a lot more value: have had opportunities to see the results of their they understand where the business is headed. efforts, enhancing their own reputations within their organizations. High performers also track the impact of their investments on business metrics more often than do other organizations. And all high performers expect moderate to significant improvement in those metrics in the next year—especially in customer and employee satisfaction. High performers don’t see the world solely through IT glasses. 8 FIGURE 3 High performers explore business scenarios as part of their IT planning process Today, our IT organization consistently explores future economic, geopolitical, social, and business scenarios as part of our IT planning or IT strategy creation processes 50% 10% HIGH PERFORMERS ACCENTURE OTHER ORGANIZATIONS # D i g i t a l IT
- 11. 03 04 05 08 09 10 INSIGHT 03 IT strategy and business strategy are one and the same Accenture’s research confirms that high performers invest to deliver strategic business capabilities. It’s far more likely that their organizations’ IT and business functions are in sync, so their investments typically reflect the strategy and needs of the business, with the goal of creating differentiated businessdriven opportunities. High Performance IT research 9
- 12. A few snapshots: high performers allocate 7 percent more of their IT budget to new projects than do other organizations. Although their between the sales rep and our customers. Now, day-to-day IT operating expenses are expected to about 20,000 of our reps nationwide are equipped stay flat this year, 54 percent of high performers with tablets which feature the point-of-sale will spend significantly more on new projects. system. So now they can work side by side with And over half of those IT investments (55 customers. This really gets into consultative percent, compared with just 37 percent at other selling. That was a big win for us. It also helped organizations) are designed to deliver strategic us showcase the technologies that we sell; capabilities within the business. (See Figure 4.) customers were really able to understand what can be done with a tablet. It led to additional Verizon Wireless amply demonstrates this sales for Internet devices as well.” collaborative provision of such strategic capabilities. “You can see a good example of mobility at work—where we partnered closely with our chief operating officer’s team—in how we’ve been transforming our retail stores,” 10 explains CIO Shankar Arumugavelu. “Previously in our stores, we had the desktop or laptop High performers aren’t waiting for new technologies to be developed or to mature before they act. FIGURE 4 High performers invest to deliver strategic business What proportion of your IT investments today is designed to deliver strategic capabilities within the business? capabilities 55 High performers, more and more in lockstep with other executives in their organizations, certainly see digital as a strategic imperative—a tool of competitive intent. They aren’t waiting for new % 37 % technologies to be developed or to mature before they act. They demonstrate a higher order of thinking—a digital mindset—that will, we believe, separate tomorrow’s most able organizations from the rest. HIGH PERFORMERS ACCENTURE OTHER ORGANIZATIONS # D i g i t a l IT
- 13. 04 05 09 10 INSIGHT 04 Mastering a hybrid IT environment The results of Accenture’s High Performance IT research provide unequivocal proof that high performers are taking advantage of all that a new hybrid approach—private and public clouds coexisting with existing systems—has to offer. Over the past few years, we have observed how high performers have been disentangling the legacy “hairball” and streamlining their application portfolios, essentially crafting a lean organization that can respond adroitly to the volatility of today’s global markets. High Performance IT research 00 11
- 14. As illustrated in Figure 5, the high performers are now approaching new system architectures with a “cloud first” mentality—they are already increasingly to the public cloud by 2020. They migrating workloads to the cloud and looking at also expect that a substantial part of their IT what can be achieved with the different forms of footprint—whether infrastructure, middleware, cloud, resulting in a hybrid cloud architecture. or applications—will remain “traditional,” both hosted and on-premise. Hybrid cloud is not just a steppingstone; it is integral to the future state of IT organizations. The research shows that high performers will To high performers, hybrid cloud is not just a steppingstone; it is integral to the future state of IT organizations. expand their cloud footprint faster than other organizations by migrating a larger proportion of their workloads to private clouds by 2015 and FIGURE 5 4b are further along in their transition to private and public clouds Regarding current and future initiatives for cloud computing, what proportion of your infrastructure, application development, and applications do you estimate will be distributed between traditional IT, pay-per-use but single-tenant IT, transitioned to private cloud, and transitioned to public cloud? Development 2015 7% 23 16 54 1% 9 10 80 NOW 14 % 33 15 38 2015 2020 Transitioned to IaaS Transitioned to private cloud Outsourced in a virtual private cloud Traditional IT, in house and outsourced ACCENTURE NOW 2015 7% 15 13 65 1% 5 8 86 NOW HIGH PERFORMERS 27 % 20 2 51 20 % 24 1 55 10 % 16 1 73 2020 Applications 12 % 24 14 50 2015 2020 Transitioned to public PaaS Transitioned to private cloud-based dev Outsourced in a virtual private dev env Traditional IT, in house and outsourced 13 % 24 1 62 6% 9 1 84 2020 NOW OTHER ORGANIZATIONS NOW HIGH PERFORMERS 19 % 36 10 35 10 % 40 10 40 1% 31 11 57 OTHER ORGANIZATIONS HIGH PERFORMERS Infrastructure OTHER ORGANIZATIONS 12 High performers 18 % 22 1 59 2015 14 % 20 12 54 8% 11 11 70 3% 4 4 89 NOW 2020 2015 2020 Transitioned to public SaaS Transitioned to private cloud application Hosted cloud application Traditional application license and maintenance # D i g i t a l IT
- 15. FIGURE 6 Another way to look at this: one-third of high performers are evolving their architecture by replacing legacy components with private and public cloud alternatives. (See Figure 6.) We are evolving our architecture by effectively replacing legacy architecture components with private and public cloud alternatives (”Today” compared with “Target”) High performers are replacing their legacy architecture with a more flexible architecture 58 % Put simply, high performers are getting the outcomes they want from upgrading their enterprise architectures. In particular, almost half of high performers (40 percent versus 33% 21% 9 percent of other organizations) are seeing measurable improvements in IT agility, and 4% 43 percent are experiencing better alignment of their project portfolios with their IT and business goals (compared with 20 percent of other HIGH PERFORMERS OTHER ORGANIZATIONS organizations). Moreover, high performers are not taking their eyes off the cost implications: 33 percent say their architecture transformations connects consumers with partners, social successfully lead to cost reductions (versus recommendations, and other high-quality 14 percent for others). content. Just 18 weeks after the Tripdiscover project launched, Deutsche Telekom had a fully A case in point: Deutsche Telekom opted deployed, flexible, real-time scalable system for Google’s platform-as-a-service offering, intended to inspire and excite its users with a Google App Engine platform, as the basis new type of online travel-booking experience.2 for its Tripdiscover.de travel portal, which High Performance IT research 13 00
- 16. Yet the challenge now is to manage provisioning and integration between private and public clouds, coupled with a hosted and on-premise architecture in a secured and standardized way. If other organizations are behind in this endeavor It is further evident that the high performers have today (only 1 percent are there), 40 percent intend even been preparing their IT operations for this to centrally manage a dynamically provisioned challenge and are ready to manage production infrastructure in the future—but will they catch workloads in the hybrid cloud: more than one- up to the high performers’ lead? quarter (27 percent) are now fully committed to using external cloud-based services that align with their business needs, and almost one in six (15 percent) already centrally manages a fully virtualized and dynamically provisioned infrastructure across multiple platforms. (See Figure 7.) 14 FIGURE 7 High performers are ready to provision and manage production workloads in the cloud WeWe are fully committed using are fully committed to to using dynamically provisioned computing dynamically provisioned computing services; we we look leverage external services; look to to leverage external services as needed, supported by by services as needed, supported business needs (”Today” compared withwith “Target”) business needs (”Today” compared “Target”) 22 22 40% % 40 % % 2% % 2 OTHER HIGH HIGH OTHER ORGANIZATIONS PERFORMERS PERFORMERS ORGANIZATIONS ACCEN T U RE ACCEN RE with “Target”) with “Target”) 77% % 77 55% % 55 27% % 27 WeWe centrally managefully virtualized, centrally manage a a fully virtualized, unified environment across multiple unified environment across multiple platforms and dynamically provision platforms and dynamically provision infrastructure services (”Today” compared infrastructure services (”Today” compared 15% % 15 1%1% OTHER HIGH HIGH OTHER ORGANIZATIONS PERFORMERS PERFORMERS ORGANIZATIONS # D i g i t a l IT
- 17. 05 10 INSIGHT 05 Diving deeper into digital 15 High performers are expediting their journey to digital, leading to a transformation in how goods are designed and produced, how commercial transactions are created and managed, how information is accessed, how relationships are formed, and how collaboration happens internally and with customers and partners. High performers have readily experimented with and learned from early deployments of social media, mobile, analytics, and cloud, as well as foundational technologies such as virtualization, security, and data management. High Performance IT research
- 18. Accenture’s research bears this out. (See Figure 8.) Now the high performers are ready to commit these technologies to a larger High performers are also wading into social part of their organizations—and to harvest their collaboration with the goals of capturing transformational potential. knowledge, fostering innovation, and boosting productivity. (See Figure 10.) They are taking Fully 69 percent of high performers (versus 42 greater advantage of their investments in percent of others) are already committing to collaboration technologies and are improving mobile transactions, allowing their customers to the way they access and leverage new insights reorder their favorite pair of shoes, book from customers. “For us, social collaboration is a travel, pay for their coffee, and even transfer godsend. For the first time, we’re able to talk with cash between bank accounts on the go. our consumers instead of to them,” declared one Fifty-four percent of the exemplars have also global CIO. deployed a mobile-enterprise app store (versus only 22 percent of other organizations), providing enterprise-grade functionality to their mobile estments their social networks beyond people to intelligent users. (See Figure 9.) 16 Forward-looking organizations are extending objects—such as their products. For example, the engines on Boeing’s new 787 Dreamliner aircraft are designed to transmit performance data in the form of news feeds to which maintenance 5a FIGURE 8 High performers are committing to Average adoption rates for digital-related technologies Deployed/ deploying 5 In a pilot 4 In a proof of concept 3 Reading and monitoring digital technologies 2 HIGH PERFORMERS OTHER ORGANIZATIONS Doing nothing 1 Security ACCENTURE Virtualization Cloud Architecture computing Information Business analytics Social collaboration Mobility # D i g i t a l IT 8
- 19. FIGURE 9 Percent of organizations that are are Percent of organizations that committing to mobile enterprise committing to mobile enterprise apps stores apps stores Percent of organizations that are are Percent of organizations that committing to mobile transactions committing to mobile transactions 69% % 69 High performers are “mobilizing” their business 54% % 54 42% % 42 22% % 22 OTHER HIGH HIGH OTHER ORGANIZATIONS PERFORMERS PERFORMERS ORGANIZATIONS HIGH HIGH OTHER OTHER PERFORMERS PERFORMERS ORGANIZATIONS ORGANIZATIONS teams can subscribe. Allowing the engine itself predictive-analytics technology, the performance to automatically share its status enables service data helps optimize aircraft maintenance and teams to more easily maintain it, reducing flight operations, anticipating the need for parts costs and increasing its lifespan. Coupled with replacement, for instance. 5d 17 FIGURE 10 How would you rate the importance of the following objectives and your performance in achieving those objectives when leveraging collaboration technologies (interactive portals, social networking, video, instant messaging, SharePoint, wikis) in your organization? My employees expect to be able to use a social network 5 Capturing and sharing knowledge 4 High performers take significantly greater advantage of their investment in collaborative technologies PIONEERING Delivering services and after-sales support 3 2 Improving employee productivity 1 BASIC Fostering innovation HIGH PERFORMERS - Performance OTHER ORGANIZATIONS - Performance Increasing sales effectiveness through a larger network Reducing the cost of doing business Getting new insights from customers HIGH PERFORMERS - Importance OTHER ORGANIZATIONS - Importance High Performance IT research
- 20. 71 % of high performers’ total employee interactions are selfservice and seamless across channels. 18 ACCENTURE # D i g i t a l IT
- 21. 06 07 08 09 INSIGHT 06 Empowered employees are the force for digital business Employees are increasingly mobile and teams of employees and freelance resources more often form on the fly—making work hours and locations completely irrelevant. And because they so depend on their technology portfolios to make it work, they often want to be able to choose their own devices and their own productivity applications that they must be able to access 24/7. High Performance IT research 19 00
- 22. The high performers in IT aren’t waiting around for trouble tickets from these employees. Accenture’s High Performance IT research shows that their employees are strongly empowered to handle most of their own day-to-day needs—from concerns that are as basic as a password reset or as sophisticated as using the Web-based tools needed to crowd-source new product concepts. This mindset means that most high performers let We’re not just a bunch of SQL programmers doing relational databases. The complex data analytics and big data problems come back to IT. The tool kit has become much more complex; it’s more diverse. We have a lot of ways to solve problems today that we did not have before.” their employees bring their own mobile phones and tablets to the workplace. They are well past the point where bring-your-own-device (BYOD) behaviors are seen chiefly as threats to data security; rather, far-sighted CIOs view employees’ mobile tools as productivity multipliers, regardless of who bought the devices. “What that means,” Far-sighted CIOs view employees’ mobile tools as productivity multipliers, regardless of who bought the devices. explains Bill VanCuren, CIO of NCR Corp., “is that 20 only the really complex problems now come to IT. The same self-service concept extends to the high performers’ customers and suppliers. One example is the Australian Taxation Office (ATO). It is looking FIGURE 11 High performers empower their employees to self- Percentage of total interactions that are or could be completely self-service and via a seamless interface across channels manage over 70 (for example, mobile, social networks, desktop, percent of their and video): interactions at work. 71 % ARE NOW Employee interactions 29 % 21% 31 % Customer interactions they can manage their taxes on the go. ATO CIO Bill Gibson recently commented, “When a tax ATO to get data. You take that principle wider and Supplier interactions 56 % COULD BE 61% Employee interactions 24% the form factor doesn’t matter.”3 68 % 43% Customer interactions HIGH PERFORMERS ACCENTURE can access on a tablet or smartphone so that agent is doing something, they are accessing the 36% 84 % to provide services and tools that business owners 49% Supplier interactions OTHER ORGANIZATIONS # D i g i t a l IT
- 23. Customers, partners, and employees have diverse desires, ambitions, and objectives when they interact with each other and with interactions are self-service or seamless across an organization. It is imperative for CIOs to channels. (See Figure 11.) This represents only anticipate and support those needs when turning a slight increase from 2010, when respondents offline interactions into digital interactions. With reported that 26 percent of customer interactions online, social and mobile customer interactions were self-serviced online. Granted, organizations costing a fraction of what it costs to serve these have had to adapt from siloed interactions individuals in person or over the phone, the (for instance, most online and mobile systems potential benefits of deploying these technologies used different interfaces until recently) to are significant. Yet Accenture’s research shows omni-channel interactions with seamless that, among both high performers and the interfaces. But the pressure for more self-service rest, not even a third of customer and supplier is very real: a new generation of digital buyers is expecting not only real-time, round-the-clock experiences, but also increasingly personalized services. The message for CIOs is clear. 21 ACCESSING THE RIGHT DATA AT THE RIGHT TIME A digital business is all about real-time business insights driving fast decisions and faster actions. These insights create the context for better digital customer experiences, enhanced workforce sidebar chapter 6 and supplier capabilities, and differentiated products and services. (Figure 12.) FIGURE 12 High performers’ Percentage of CIOs who say data that employees need to do their work is ... ... most accessible ... most granular employees have ... real-time better access to the OTHER OTHER OTHER HIGH HIGH HIGH PERFORMERS ORGANIZATIONS PERFORMERS ORGANIZATIONS PERFORMERS ORGANIZATIONS Customer 69 % 23 % 46 % 16 % 46 % 26 % Products/services 62 22 58 16 42 42 14 38 9 23 12 Employees 54 26 38 17 46 data that they need 22 Suppliers/partners detailed, real-time 24 to do their jobs Percentage of respondents who answered 5 on a scale of 1 (not accessible) to 5 (most accessible) High Performance IT research
- 24. 77 % of high performers’ data management investments are achieving or exceeding business value. 22 20 ACCENTURE # D i g i t a l IT
- 25. 07 08 09 10 INSIGHT 07 Mastering data to drive outcomes creates competitive advantage The problem for businesses is no longer the absence of data. In a time when they are flooded with new data, the problem becomes the absence of the right data, which is what will produce the sharp insights that spur the most actionable outcomes. And those outcomes, in turn, create competitive advantage. High Performance IT research 23
- 26. High performers are far closer to the ideal of having the right data. They have been investing in master data management and data quality management technologies. It needed to achieve assurance for years. Today, the majority of one version of the truth, enabling decision makers high performers are fully committed to these to focus their discussions not on the “what” but information-management technologies. Their on the “why” and “how”.4 investments in data management and predictive and descriptive analytics are paying off: twice as Building on this strong foundation and many high performers as other organizations are understanding the dynamics between information achieving or exceeding the business value they and business processes and systems, high expected. (See Figure 13.) For example, leading consumer-goods company Procter & Gamble realized that in order to move its business to a forward-looking view, it needed to invest in data High performers’ investments in data management and predictive and descriptive analytics are paying off. 24 00 FIGURE 13 Information management investments are Our current information management investments are achieving or exceeding the expected business value 77 % 77 % paying off: twice as many high 54 % performers as other 54 % 50 % organizations are achieving or exceeding expected 30% 28% 23% business value Data management Content management HIGH PERFORMERS ACCENTURE 21% Descriptive analytics Predictive analytics 19% Mobile access to these technologies OTHER ORGANIZATIONS # D i g i t a l IT
- 27. performers are gaining the ability to embed analytics capabilities and feed customer insights have. The challenge will be to figure out not only into their processes. (See Figure 14.) how to collect data but, in many cases, how to However, even high performers have some way create it. Accenture contends that whereas the to go. Although most are leveraging a mix of current generation of software was designed internal and external data in their analytical for functionality, the next generation must be capabilities, they admit that they still face designed for analytics as well. significant data-integration challenges. What’s the new frontier in data and analytics? When enterprises don’t have access to the right data, they need to start looking differently at how they go about getting data. They can’t rely solely on the limited universe of data they already 25 00 FIGURE 14 Our organization has realized the following benefits from integrating its business processes, information, and IT systems to a very large extent High performers are building strategic analytical 62 % capabilities 46 % 46 % 38 % 7% 2% Improve the organization’s ability to analyze the costs and benefits of business processes Embed real-time, analytics-based decision-making tools into business processes HIGH PERFORMERS 3% Develop and capitalize on new insights on changing customer behavior 6% Provide access to key information from across a variety of devices OTHER ORGANIZATIONS High Performance IT research
- 28. 46 % of high performers expect to adopt agile methods across their organization. 26 ACCENTURE # D i g i t a l IT
- 29. 08 09 10 INSIGHT 08 Adopting agile to become agile A key reason why high performers are eager to extricate themselves from their legacy systems is that they aim to open up many more degrees of freedom for their organizations. In other words, they are assiduously developing agile systems and operations that enable their organizations to adapt far more quickly. High Performance IT research 27
- 30. FIGURe 15 One in five high performers has adopted agile methods across its To what extent has your organization adopted agile methods as an approach to delivering applications? (”Today” compared with “Target”) organization In essence, the high-performing teams are using agile methods to build simple, elegant, and flexible architectures that make it much easier to 46 % 36 0 18 18 % 55 9 18 3% 48 28 21 29 % 50 14 7 experiment with new technologies, respond to changes without the need to shut down systems, and add functionality as required. Agile methods also mean making incremental technological changes and quickly learning from them, rather HIGH PERFORMERS OTHER ORGANIZATIONS We have adopted agile across our organization We have used or are using agile on a few select projects We are reading and evaluating We do not use agile Accenture’s research finds that one in five high 28 performers has adopted agile methods across the organization—that’s six times what others do. than committing time and resources to massive monolithic rollouts. High-performing teams are using agile methods to build simple, elegant, and flexible architectures. (See Figure 15.) The benefits? Their companies can respond far faster to changes in their business, sensing and dodging problems and jumping more nimbly onto opportunities. In addition to building an agile architecture, high performers are remodeling their portfolios of applications to respond to volatility—not only to deal with increased market disruption and uncertainty, but also to handle more interactions with partner organizations and to handle faster changes to business models. Compared with other respondents, high performers have been ACCENTURE # D i g i t a l IT
- 31. FIGURE 16 We have one global or regional instance; updates are monitored globally Compared with other organizations, 69 % 64 % 60 % high performers are 58 % 55 % more disciplined in reducing the applications count in their portfolios 37% 29 % 18% Sales and marketing 36% 25% 21% 14% Customer service Finance and administration HIGH PERFORMERS Human resources Distribution and supply chain Operations and production OTHER ORGANIZATIONS better able to combat complexity because us they have recently upgraded their sales and they have successfully reduced the numbers marketing applications, compared with 26 percent of applications in their portfolios—while of other organizations. This rationalized and modernizing those portfolios. (See Figure 16.) modernized portfolio of applications gives high For example, 60 percent of high performers report performers the flexibility to respond to business that they already have one global or regional change more swiftly. instance of their sales and marketing applications compared with 18 percent of other organizations. Moreover, 60 percent of high performers told High Performance IT research 29
- 32. 85 % of high performers identify skills in new technologies as one of the top skills to have for future success. 30 ACCENTURE # D i g i t a l IT
- 33. 09 10 INSIGHT 09 Investing early in technology skills provides an edge Accenture’s research finds that the high performers identify, early on, the internal and external skills they need. Because they are avid experimenters, they can quickly spot where there are gaps in capabilities and skills. They have an especially keen eye for skills in new technologies, with 85 percent of high performers telling us skills in new technologies are some of the top skills to have for future success. (See Figure 17.) One-third of high performers have already addressed this gap (versus only 3 percent of other organizations) and another 44 percent are busy recruiting and training in those skills today (versus 30 percent of other organizations). High Performance IT research 31
- 34. 9aR FIGURE 17 High performers identify, early on, the internal and external Top five skills CIOs will need to be successful as their sourcing and operating models evolve toward a standardized and simplified architecture: 85 % skills they need 61% New technologies knowledge and skills 69 % 72% 62 % 63% Business knowledge and relationship skills Service integration skills HIGH PERFORMERS 66% 54 % 54 % 53% Enterprise architecture and Information management skills Requirement analysis skills OTHER ORGANIZATIONS “It’s incumbent on IT to be early adopters of the technologies,” says NCR CIO Bill VanCuren. “So the top of the list for most high performers. Their CIOs first challenge is to get your own IT organization recognize how critical it is for IT leaders at many on board with change. Yes, you have to balance levels to be able to communicate effectively with your current set of IT offerings with the next wave 32 Business knowledge and soft skills are also at the their business colleagues. of technologies that you’re exploring, but meeting the challenge starts with the IT organization’s The Accenture research reveals that leading ability to take risk and learn new things and then CIOs are very conscious of the talents available be the change agent for the company.” beyond their own organizations. They think in terms of a talent network across partners, FIGURE 18 High performers are conscious of the talents available beyond their own We have a comprehensive sourcing strategy; strategic vendors are aligned to business requirements and priorities (”Today” compared with “Target”) organizations mindset, of course, to think about tapping into 32 skills beyond full-time staffers, but it’s crucial in a world in which requirements change quickly, and agility is key. And, it’s a different type of talent that % 7 % ACCENTURE strategy, aligning key partners with business other organizations. (See Figure 18.) It’s a different % HIGH PERFORMERS high performers has a comprehensive sourcing priorities—and doing so three times more than 50% 18 outsourcing firms, and consultants. One in five is needed in the digital world. There is a need for professionals who are comfortable with fluidity and change. OTHER ORGANIZATIONS # D i g i t a l IT
- 35. 10 INSIGHT 10 The marriage of IT security and business risk Despite an increasing focus on securing the growing digital business, IT departments struggle to keep pace with recent advances in security technologies. Although respondents from most organizations believe they currently have the right level of investment in compliance and overall security, 45 percent concede they have been underinvesting in cybersecurity. There is a general understanding that endpoint security is not enough, but the move to active defense— staying one step ahead of the attackers—isn’t yet happening on a broad scale. High Performance IT research 33
- 36. Although security technologies are maturing rapidly and communities are forming to expose risks, the biggest problem is slow adoption give high priority to defining an overall security of solutions that already exist. IT’s core challenge: strategy, improving their approach to business get current with best practices in security continuity, defining a risk-based approach to while getting smarter about the new active- security, and shoring up their security controls defense possibilities. associated with mobility. Security is assuredly an area in which the high With improving the ability to anticipate cyber performers far outpace other organizations in threats as a top priority, high performers are terms of priority. High performers put significantly more emphasis on the ability to anticipate cyber In the high performers’ mind, there is no point at which IT security ends and business risk begins; high performers see the two blending together seamlessly. threats and on clarifying the security governance FIGURE 19 High performers model and organization structure than do other IT organizations. They are also twice as likely to view improving their ability 34 to anticipate cyber threats and their approach to business continuity 10a as their highest security priorities Please describe the security priorities for your organization: 62 % 62 % x2 62 % 62 % x3 x2 54 % 54 % x3 x2 HIGH PRIORITY 40% x2 28% 24% 18% Improve our approach to business continuity Improve our ability to anticipate cyber threats HIGH PERFORMERS OTHER ORGANIZATIONS ACCENTURE 46 % 46 % 23% 26% 15% Minimize or prevent system downtime Define an overall security strategy Clarify the security governance model and organization structure Implement or improve security controls associated with mobility Improve information and data protection controls 20% Baseline the organization’s risk profile; define a risk-based approach to security 38 % 23% Improve our identity management capability # D i g i t a l IT
- 37. 10b 6c further along in responding to that challenge— holistic security policies in general. Their CIOs are acutely aware of the need to protect their organizations’ intellectual property, product The security and risk management function is moving outside the boundaries of traditional IT to protect intellectual property, product innovation and unique processes (”Today” compared with “Target”) 50% 35% More than a quarter of the high performers risk management functions to include 27% intellectual property, product innovation, and research. (See Figure 20.) product innovation, 5.0 Meeting and processes HIGH PERFORMERS 3.0 2.0 8% processes—doing so three times more than other organizations, according to Accenture’s protect their IP, 4.0 innovation, and processes. (See Figure 19.) are expanding the scope of their security and Are your ap High performers TECHNICAL NEEDS and indeed, in developing more effective, more FIGURE 20 1.0 1.0 OTHER ORGANIZATIONS Scale of 1 to 5, 1 = not me In the high performers’ mind, there is no point at which IT security ends and business risk begins; work hand in glove with the lines of business— high performers see the two blending together four times more than other organizations. seamlessly. Eight out of ten already track their And more than one-third of high performers organizations’ operational risks stemming measure the value of security and track specific from IT investments—notably those in digital outcomes of incidents and breaches, attributing technologies. Their goal is to keep risks in check; business value to security. Only 5 percent of other 75 percent of high performers aim to continue to organizations are doing that today. lower their risk profiles in the short term. To that end, almost half of their security organizations High Performance IT research 35
- 38. CONCLUSION In previous rounds of Accenture’s High Performance IT research, we discussed how little change there has been across the IT disciplines. Although the high performers have been operating consistently at levels far and above the rest, overall there have been very few step changes—that is, few pronounced differences from one round of research to the next. However, this fourth round of the research reveals some stark distinctions. Not only is the gap between the high performers and the rest as wide as ever, but high performers now have the tools and know-how— digital tools and digital know-how—to race far ahead of the rest. 36 ACCENTURE
- 39. the CIO’s relationship with the rest of the C-suite is vitally important for their success; and, as technology becomes more central to businesses, This raises many provocative questions: Will the the IT and business agenda becomes one and the high performers already on the digital journey same. This is something for CIOs to think about be the leaders of business and industry if they do as they look at their organizations in the future. it right? What will happen to the organizations And it’s a challenge for Accenture as we embark that are distinctly far behind? And what will on the next round of research. happen to the IT function itself as business and IT converge in the digital world? Will the “high” in high performance be redefined once again? One thing we do know is that over the course of the four rounds of Accenture’s High Performance IT research, there are three trends that continue unchanged: across the board, the gap between high performers and the rest remains wide; High Performance IT research 37
- 40. Profile of a high performer Three building blocks provide a guide for CIOs IT Agility n architecture to be a critical IT requirement n IT Execution n Provides access to the right management Considers a strong and mature enterprise Proactively retires legacy systems and achieves higher levels of end-to-end systems interoperability and availability tools and information for proactively tracking the performance of IT in the organization to internally and externally to optimize the sustain continuous improvement n n automation of processes Measures the impact of enterprise architecture projects n Has comprehensive data-management policies and procedures to enforce data standards n Integrates the portfolio of applications Manages systems that are responsive to changing business-information needs and shares data as “services” across the infrastructure and security 38 n Proactively measures and monitors IT Innovation performance of applications and replaces n some to drive greater returns innovative technologies n Prioritizes investments in applications on n Leads the market in adoption of Positions the IT organization to play a critical the basis of users’ needs for business role in the innovation process of the process improvement organization and uses IT to craft business n Understands the value of being able to track strategies and create new business benefits of infrastructure investments at all opportunities times and efficiently manages the costs n and benefits of their infrastructure services functionality and lower operational costs n Enforces comprehensive security-governance n Works closely with business users to optimize Creates policies that support internal- and policies and standards that are tied to risk external-asset reuse management functions and has secured n end-to-end information processes that allow employees to access and Provides real-time decision-making tools analyze information n Follows a centralized risk-management approach and always designs business processes with security and data privacy in mind ACCENTURE # D i g i t a l IT
- 41. ENDNOTES Interview with Michael Harte, CIO, “ Commonwealth Bank of Australia,” CIO, August 2, 2013. “ Deutsche Telekom: Creating a Customer Portal Using PaaS,” Accenture, 2013. “ ATO, Defence Talk BYOD,” CIO, July 24, 2013. Data Analytics Allows PG to Turn on a Dime,” “ CIO Insight, May 3, 2013. 39 How Accenture Measures High Performance Accenture’s High Performance IT research is a global effort that measures organizations’ IT capabilities as an indicator of high performance. Using the score, we then calculate a mean To identify high performers, we begin with a core of the resulting performance scores for each set of more than 68 performance indicators in building block. Next, we identify the leaders in 37 questions that address prerequisites for IT each building block by selecting the participants leadership in each building block. To ensure that with scores that were higher than one standard the appropriate indicators are used, we employ deviation from the mean result (approximately reliability scores (using results that are consistent). the top 15th percentile). We then use the questions to calculate each participant’s performance score High performers are those that are leaders in all for each of the three building blocks. three building blocks. For this fourth global High Performance IT research, we identified 13 high performers among the 202 respondents. High Performance IT research
- 42. ABOUT THE RESEARCH REPORT The High Performance IT research has been operating since 2005, and to date has involved in-depth participation by more than 1,700 For the survey, Accenture used more than CIOs across 45 countries. Assessments were 150 proprietary indicators of high performance in conducted by the most senior IT executives in 202 managing IT, across eight IT capabilities. Many of of the world’s largest private and public sector these questions were created to shed light on organizations. the differences between CIO assessments of how their IT is performing today and where The respondents represent a wide range of industries and geographies: 45 percent were 150 areas of IT management, respondents were from Europe, 19 percent from North America, asked to rate their IT practice on a scale ranging 20 percent from Asia Pacific, and 15 percent from from “Ad Hoc or Not Managed” (1) through Latin America. The companies have combined “Defined and Managed” (3) to “High Performing” annual revenues of over $2.4 trillion and include (5). The definitions of “Ad Hoc or Not Managed,” both Accenture clients and non-clients. 40 they aspire it to perform in the future. In the “Defined and Managed,” and “High Performing” were based on Accenture’s appraisal of industry consensus on the given topic. ACCENTURE # D i g i t a l IT
- 43. For more information about the High Performance IT research, contact Paul Daugherty, paul.r.daugherty@accenture.com or visit www.accenture.com/highperformanceit. 41 High Performance IT research
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