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Megatrends and Data - Adapting to Disruption

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This paper delivers an analysis of the top megatrends ANZ business and IT leaders believe disruption of their orgs and how they're using data to prepare.
- By Tech Research Asia sponsored by NetApp Australia

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Megatrends and Data - Adapting to Disruption

  1. 1. Megatrends and Data Adapting to Disruption By Tech Research Asia Sponsored by NetApp Australia
  2. 2. Executive Summary Are Australian and New Zealand organisations ready to leverage data to deal with megatrend disruption? This Tech Research Asia (TRA) insights paper – sponsored by NetApp Australia – introduces the results of a survey of 468 ANZ business and IT leaders. It delivers an analysis of the top megatrends likely to cause disruption, how organisations are using data, and the potential role for the concept of a data fabric. A checklist of strategic questions is also offered to help your efforts to adapt. Key Findings • One in two business and IT leaders in Australia and New Zealand perceive the potential for significant long-term disruption to their organisation as a result of megatrends. The top three are: Economic Change; Technology Innovation and the Internet; and Changing Consumer Expectations and Behaviour. • Less than 25% of ANZ organisations surveyed are already directly using data to prepare for the changes these trends will bring. Most note ongoing challenges with leveraging data for success including timeliness of access, and issues with generating insights. • Better use of data is perceived to provide benefits of 18% to 32% in a range of variables, including both financial and operational areas. Recommendations • Build the concept of a data fabric into your strategic planning as you move to a hybrid technology and service environment in order to optimise your ability to leverage data. • Use the checklist contained in this insights paper to help you establish a strategic technology plan for managing and leveraging your data to adapt to the megatrend disruptions specific to your business. The Dashboard Topic: The top megatrends Australian and New Zealand business and IT leaders believe will disrupt their organisations and how they are using data to prepare. Organisations: All Industries: All Countries: Australia and New Zealand Key Results: Of ANZ business and IT leaders have a cloud strategy and almost one in two expect to use a data fabric in future to help manage data in a hybrid environment. Future: Adapting to megatrend disruption will be imperative for all ANZ organisations. Turning data into actionable knowledge will be key to these efforts. In turn, this requires having an optimal data management solution for hybrid technology and service environments. 60% + 2 3
  3. 3. 0 20 40 60 80 100 120 10 - Very highly disruptive to my organisation 9 8 7 6 Source: TRA (N=234) Totalrespondents Introduction We all have near-term goals and pressures to get things done by this week, month, quarter, or even by year’s end. That’s just a natural characteristic of doing business, and there are few that can escape this reality. Indeed, we are often consumed by reaching our most immediate targets. But across Australia and New Zealand there are also several longer-term megatrends that will considerably impact the operations of a range of organisations. These are not your run of the mill technology-industry fads that tend to come and go at the whims of marketing budgets or media attention spans. And they run deeper than the average quarterly or year-on-year trends that many organisations fixate on. They are fundamental structural changes happening on a wide scale that are often beyond the control or influence of any individual or sole organisation. In many ways, they are what will define our collective futures. This TRA insights paper outlines the top megatrends that 468 ANZ business and IT leaders identified during an online survey conducted in April-May, 2015. It also investigates how data management and data fabrics will play a role in helping organisations succeed as the impacts of change are felt. The Top Megatrends: Disrupting ANZ Organisations TRA asked ANZ business and IT leaders to tell us what they perceive to be the most disruptive megatrends that they will face in the long term (more than five years from now). Research participants were asked to rate 17 trends on a scale of 1 to 10, with 1 indicating no disruption is expected and 10 being “very highly disruptive”. The aggregated list below shows what your ANZ peers perceive to be the top 10 megatrends (based on survey respondents that selected a rating of “6” or higher): 1. Economic Change 2. Technology Innovation and the Internet 3. Changing Consumer Expectations and Behaviours 4. Population Growth 5. Ageing Population 6. Cyber Attacks 7. Rise of Asian Economies 8. Political or social change/ disruption 9. Global warming 10. Access to and quality of education These results echo the findings of other research in the scientific and academic domains, including that from the CSIRO in Australia. In both Australia and New Zealand there has been persistent and widespread discussion about the changing nature of economies, how consumer behaviour is adjusting, and the role technology innovation can play. Below we provide summary information on the top three trends. ANZ IT Leader Megatrend Ratings 4 5
  4. 4. 1. Economic Change Selected by 46% of CIOs and 49.6% of CxOs as being disruptive. Economies are always changing. However, in both Australia and New Zealand – as with much of the rest of the world – it is fair to say there are some significant structural economic changes unfolding that will impact performance over the long term. Both the Reserve Bank of Australia and the Reserve Bank of New Zealand – along with most economists – have noted the long-term impacts of factors like the end of the mining boom, China’s rise and recent troubles, house prices, changes in consumer preferences, commodity price fluctuations and demand, and slow global growth to name but a small selection of variables at play. While the policy settings and strategies employed to adapt are different between both countries, across ANZ there has been a similar discussion taking place about how to best adapt to a clearly changing and more global economic environment. Further, considering the impact any significant changes in the economy can have on individual organisations it is therefore not surprising this is considered the most potentially disruptive megatrend across ANZ. Yet, not only is the question whether the steps being taken today are in the right direction to deal with this megatrend, but it is also whether we have the agility to change course in time should further disruption occur or our current bearing prove off-course. 2. Technology Innovation and the Internet Selected by 44% of CIOs and 47% of CxOs as being disruptive. It is often said that one of the few constants in the world of technology is “change” and that the pace of change is increasing exponentially. One only needs to look at the rise of smartphones and mobile apps as an example. The theory of “Disruptive Innovation” posited by Clayton Christensen is arguably the poster child for this adage and has been widely adopted and adapted. While the theory is contested by some, there are many examples of how technology and the Internet can fundamentally change industries. From email and the birth of the World Wide Web to e-commerce, social media and the sharing economy, there is no shortage of tales of disruptive success and woe across industries. This is as true in ANZ as it is in all developed economies. Many organisations from outside the ICT industry have already acknowledged the potential for disruption and have invested in their own innovation capabilities. TRA expects more and more organisations from all types of industries will adopt a strategic mindset that posits their business as being founded in technology in future – making the majority of organisations a “technology organisation” and more job roles, “technology roles”. They won’t necessarily be defined and described by technology industry terminology, but technology will be at their core. This will happen in order to determine their own fortunes as a direct result of the potential for technological innovation to change the way they operate. 6 7
  5. 5. 3. Changing Consumer Expectations and Behaviours Selected by 32.5% of CIOs and 40% of CxOs as being disruptive. Today’s consumer is more empowered with information and choice than at any other time in the past in ANZ. They can make informed decisions and change who they engage or spend their money with ease. Add to this fact that people are living longer, are arguably more affluent, and are used to immediate gratification and you have a potent recipe for fundamental changes in expectations and behaviour. Yet, the disruption this megatrend is already wielding in the form of newer channels of digital engagement, is not entirely replacing traditional means of communication and trade. Many consumers in ANZ expect to continue being offered high levels of service through in-person or analogue channels. TRA expects this to continue to be the case: the new consumer will expect to be offered all the best ways of engagement from the past along with all of the new ways, including platforms that are yet to be envisaged. It is here that ANZ organisations will need to be able to adapt to succeed. While the scope of this paper prevents us from investigating all of the trends more thoroughly, it is clear that a significant portion of ANZ business and IT leaders are aware of the potential disruption they face. However, we encourage all ANZ business and IT leaders to invest the time and resources to undertake further reading to understand the long-term trends that will impact their organisations. It’s important to note that certain trends bore greater impact depending on industry based on the survey results: • Only in the financial and insurance services industry were IT and business leaders aligned on the top three disruptive megatrends (economic change, technology innovation and the internet, and changing consumer expectations and behaviours); • Federal government organisations were concerned about cyber attacks; • Local government respondents identified disruption from the ageing population; • Utilities provider business leaders were concerned about global warming; • CxOs at construction firms pointed to the rise of Asian economies as potentially disruptive; and • Mining industry IT leaders nominated a squeeze on natural resources. 0 20 40 60 80 100 120 140 10 - Very highly disruptive to my organisation 9 8 7 6 Source: TRA (N = 234) Totalrespondents ANZ Business Leader Megatrend Ratings ???? 8 9
  6. 6. We also found that: It is never easy to be able to put aside the required time and talent to investigate issues that might not be acutely influential on short-term goals. However, this is more often said in hindsight by those who regret not being prepared or able to adapt. The prudent approach is to make the time and establish a long-term strategy. TRA recommends that you evaluate your capabilities for leveraging data and the performance of the underlying infrastructure as both of these factors will impact your ability to adapt. Data Today and Tomorrow: Optimising for Success It is increasingly clear to many that the ability to effectively mitigate the downsides of megatrend disruption and grasp the positives will be heavily informed by how well we use the data available to us. For example, better data will help policy makers and financial investors to understand the broader impacts on any given industry from structural economic change. A deeper understanding of how demographics are changing and the correlated implications this has for the delivery of healthcare services and economic policy may assist local governments and healthcare providers prepare for the future. There are many more possible examples applicable to a range of industries and issues. Yet, despite the noise around data analytics permeating from many corners of the ANZ market, there appears a long way to go: less than a quarter of organisations are already using data to prepare to adapt to megatrend disruption. As part of the survey process, TRA also asked a number of questions about how respondents are capturing, storing, and using data. We found that: 24% of ANZ business leaders and 20% of IT leaders say they are using data to prepare for the disruption of megatrends today 10 11 The 3 industries that perceive the highest threat of disruption as a result of megatrends are: • For IT leaders: #1 Mining #2 Agriculture, Forestry and Fishing #3 Federal Government • For business leaders: #1 Healthcare and social services #2 Local government #3 Financial and Insurance Services The 3 industries least likely to perceive a threat from disruption as a result of megatrends are: • For IT leaders: #1 Arts and recreation services #2 Construction #3 Accommodation and Food services • For business leaders: #1 Construction #2 Manufacturing #3 Information, media and telecommunications
  7. 7. Q. What challenges do you have with leveraging the data you have captured or have access to? • 4 in 10 CIOs, and 6 in 10 CxOs say they are not sure how much data their organisation is storing today. Two thirds of respondents expect an increase in the amount of data they store in future. However, TRA would have expected a higher percentage. • Business leaders are more likely to indicate they use the data they capture in more ways than IT leaders, except when it comes to reselling data and using data for experimental analysis. Governance and compliance, improving customer experience, traditional BI, RD, and improving operational or supply chain efficiency are the most common ways data is used. • IT Leaders are more likely to indicate they have achieved benefits in financial areas as their top three outcomes than business leaders from using data. CxOs meanwhile rate operational improvements, better customer engagement, and lower costs as their top three outcomes. For both CIOs and CxOs the average level of improvement from using data (as a perceived percentage compared to past results) ranges from 18% to 32%. • However, there are a wide range of common challenges with using data noted by survey respondents. Securing data, finding cost-effective storage, and timeliness of access to data are the top issues indicated. TRA believes that part of the challenge – and also the opportunity – with using data lies in establishing effective management of what is increasingly becoming a standard model for ANZ organisations: a hybrid technology and service environment. 19.23 19.23 19.23 20.09 22.65 23.08 27.35 28.21 28.63 36.32 41.45 20.09 22.65 27.78 24.36 32.91 30.34 32.48 31.62 29.91 33.33 35.04 0 10 20 30 40 50 Not sure how to appropriately analyse the data We're concerned about lack of data portability across providers Our internal data management skills are not strong enough We struggle to act on the insights generated from data capture and analysis Ensuring we adhere to relevant compliance regulatory requirements We struggle to find people with the skills to analyse the data Creating valuable insights from the data Timeliness of access to data Lack of appropriate analytical tools Cost-effective storage of data Securing our data CxO CIO % Source: TRA (N=468) 12 13
  8. 8. Data Fabrics: Managing a hybrid technology and service environment Across ANZ there is an unmistakeable shift occurring in how organisations procure and manage IT infrastructure. This change has implications for how well any given entity is able to leverage data. In short, many organisations are moving away from a predominantly on-premises model, where infrastructure and applications were located in an organisation’s own data centre(s) or that of a colocation or service provider facility and managed internally. This trend has amplified in the last two to three years and follows on from a period of data centre and technology silo consolidation driven heavily by the adoption of x86 server virtualisation among other factors. Today, however, the majority of ANZ organisations are adopting cloud computing. Many now have, or are moving to, a hybrid environment that increases the number of services being consumed (and typically reduces the infrastructure technologies being managed). The contemporary IT environment can often involve a mix of on-premises infrastructure and managed services or outsourcing, Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). As part of TRA’s survey, we asked ANZ business and IT leaders to describe their cloud computing strategy. The majority already have one in place, or are looking to develop one in future. It is important to note that this refers to “strategy” and doesn’t necessarily reflect the hybrid reality of many organisations’ IT environments. There are ultimately many drivers for adopting the “as-a-service” approach that cloud computing embodies along with many benefits and challenges. In TRA’s view one of the most powerful reasons for adopting a hybrid cloud approach is because, done right, it can hand a degree of agility and flexibility back to the organisation. This is especially true if you are able to achieve application and data portability across providers. Not only can an organisation achieve faster speed to market (or innovation), scalability, and ultimately better performance by locating applications and data on the most optimal infrastructure, but they can also place pressure on providers to deliver more value as there is a far lower barrier to changing to a competitor than in the past. According to the survey results, eight in 10 organisations believe that data and/or applications portability is somewhat relevant to highly relevant to their cloud strategy; for both data and applications, 22% to 25% of CIOs and CxOs consider portability to be “highly relevant”. A critical capability for success in this kind of data and application portable hybrid environment is having the right level of visibility and control. While there are many ways to achieve this, one of the more notable to consider is that of a “data fabric”. While one in two survey respondents said they expect to invest in a data fabric within 18 months, TRA believes there is still some misunderstanding about the concept. Source: TRA 2015, (N=468) We don't have one 18% Not doing cloud 15% Want one but not planned 17% Moving to, or in public cloud 21% Moving to or in private cloud 18% Moving to or in hybrid cloud 9% Other 2% IT Leaders We don't have one 12% Not doing cloud 13% Want one but not planned 14% Moving to, or in public cloud 17% Moving to or in private cloud 27% Moving to or in hybrid cloud 11% Other 6% Business Leaders Q. How would you describe your organisation’s cloud strategy? 14 15
  9. 9. Different from other types of “fabrics” a “data fabric” can be defined as a technology-enabled strategy for obtaining a unified view of your data so you can store, access, protect, share, analyse and archive it in a consistent and predictable way across multiple internal and external data centres including public cloud computing services [see graphic below for a visual representation]. Some of the important components of a data fabric include: • Data management (including namespace management, data security, authentication and access control, locking, snapshots/versioning/ cloning, disaster protection/failover/failback and audit/compliance), • Data transport (data replication, data tiering, data migration) • Data services (data protection, multi-protocol data access, monitoring, billing, chargeback, analytics, application integration, governance, risk and compliance management) • Data storage, backup, and recovery • Distributed applications and database applications If your organisation is faced with megatrend disruption, then using data to generate knowledge that can help the organisation adapt and respond effectively will be important. By association this means making sure you are able to optimally manage this data in a hybrid technology and service environment. A data fabric approach is one strategy to evaluate in order to achieve this goal. TRA offers the following checklist of strategy questions to help your organisation commence its own journey to prepare to adapt to megatrend disruption: On megatrends: Have you established a multi-stakeholder team to research and evaluate the potential disruption your organisation might face from long-term megatrends? Do you have a well-articulated strategy for dealing with megatrends that is understood and embraced by the broader organisation? Do you have the right talent inside your organisation or do you need to bring on board partners or recruit in order to adapt to megatrend disruption? Has sufficient funding been allocated towards projects related to the strategy? Does your organisation have the capabilities required to execute on the strategy or do you need to consider acquiring them? Do you have the leadership required to steer the organisation through megatrend disruption? On your use of data: Are your stakeholders fully aware of both the internal and external data that is available to them? Are they able to securely access data in a timely manner to make decisions or generate new business? Do you ensure training for data analytics? What steps do you take to ensure data and related tools are used appropriately? How are you measuring the success of using data? Do you have a team established for investigating how the organisation might use data in different or new ways to generate value? Have you explored the option of using or providing open data? What data do you need more of, or to improve, in order to adapt to megatrend disruption? On your infrastructure and data fabrics: Are you adopting a hybrid cloud and infrastructure environment? If so, do you have a strategic plan in place for ensuring you are able to achieve seamless portability of applications and data? Do you have checks and balances in place to ensure your software licensing remains compliant in a hybrid model? Have you investigated the concept of a data fabric and the relevant suppliers? Could this help you: 1) react more quickly?; 2) Make better quality decisions?; and 3) Secure your data better? Do you have an ongoing strategy for ensuring your IT environment is able to remain agile and modernised in order to support the use of data in any projects related to megatrend strategies? A Checklist for ANZ Business and IT Leaders: Megatrends, Data Management, and Data Fabrics Source: TRA 2015 AData FabricVision 16 17 A Data Fabric Vision
  10. 10. Methodology Tech Research Asia was commissioned by NetApp Australia to undertake an online survey of IT and business leaders in Australia and New Zealand organisations with more than 100 employees in April-May 2015. Survey respondents had to have an intimate understanding of their organisation’s IT strategy in order to qualify for participation. A total of 468 organisations participated with 90 in New Zealand and the remainder (378) in Australia. The demographic breakdown of the survey sample is shown below: 18 19
  11. 11. This report was commissioned by NetApp Australia. For more information on how NetApp helps businesses of all sizes please get in contact. Copyright And Quotation Policy: The Tech Research Asia Name And Published Materials Are Subject To Trademark And Copyright Protection, Regardless Of Source. Use Of This Research And Content For An Organisation’s Internal Purposes Is Acceptable Given Appropriate Attribution To Tech Research Asia. For Further Information On Acquiring Rights To Use Tech Research Asia Research And Content Please Contact Us Via Our Website -- Http://Techresearch.asia/Contact -- Or Directly. Disclaimer: You Accept All Risks And Responsibility For Losses, Damages, Costs And Other Consequences Resulting Directly Or Indirectly From Using This Research Document And Any Information Or Material Available From It. To The Maximum Permitted By Law, Tech Research Asia Excludes All Liability To Any Person Arising Directly Or Indirectly From Using This Research And Content And Any Information Or Material Available From It. This Report Is Provided For Information Purposes Only. It Is Not A Complete Analysis Of Every Material Fact Respecting Any Technology, Company, Industry, Security Or Investment. Opinions Expressed Are Subject To Change Without Notice. Statements Of Fact Have Been Obtained From Sources Considered Reliable But No Representation Is Made By Tech Research Asia Or Any Of Its Affiliates As To Their Completeness Or Accuracy.

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