IDC Outlook 2014: Top trends for New Zealand CIOs

Analyst firm lists the issues and developments that are expected to have the most significant impact on the local ICT market in the next 12 months.

According to IDC New Zealand's
Outlook 2014 report, the “third platform” - the intersection of the four technology pillars of big data, mobility, social and cloud - is becoming more prominent in organisations, as are the opportunities and challenges that come with these trends

IDC further notes the most important development is the executive level’s understanding of the new technology paradigm.

“The CEO now must be able to have a technology-based conversation at the same level of ease that they have with the CFO regarding financial reports,” says Louise Francis, research manager, IDC NZ and one of the authors of the report.

Related: CIO Agenda: Innovate and transform on the 'third platform'

“Historically, technology has had to align with the business, but this statement no longer holds true. Given the nature of technology being a threat and an opportunity, organisations need to align to innovate and reinvent themselves by leveraging the 'third platform'.

“At an executive level, technology must be a consideration if not centre point in the establishment of strategy with the context of network engagement and information management. Structure is still important, but the consideration regarding how an organisation engages internally and externally is far more dynamic than that,” she says.

The CEO now must be comfortable to have a technology-based conversation at the same level of ease that they have with the CFO regarding financial reports.

Louise Francis, IDC NZ

The “third platform” plays a key role in the top 10 trends IDC says are expected to have the most significant impact on the local market in the upcoming year.

Prediction 1: Intelligent industries and new sources of competitive advantage will arise from the intersections of the four pillars of the “third platform”

IDC expects the most dramatic value migration driven by the third platform will not be within IT, but in virtually every industry. By 2018, it predict one-third of the top 20 market share leaders in most industries will be significantly disrupted by new competitors (and "reinvented" incumbents) that use the third platform to create new offerings, new business models, and new cost structures to drive revenue growth and value.

Organisations, it says, must have a strategic and holistic approach to the four technology pillars rather than having a “siloed” approach at each component of the third platform.

Prediction 2: Third platform innovation will push the CIO community three ways - up, down, or out

The acceleration of competition on the third platform will increase demands and pressures for CIOs and their departments to become the innovation engine within their organisation, notes IDC. IDC sees 2014 as a crucial year for CIOs to transition from the ‘old school’ chief infrastructure officer to the future role of chief innovation officer, or as one CIO stated, the "change and innovation officer”.

IDC expects to see the emergence of three camps of CIOs: Those who do not have the skill and capability to transition successfully, those that are reluctant to even try a transition, and those that will succeed in the transition.

Prediction 3: A new wave of customer centricity budgets focusing on context driven, convenient, and collaborative engagement

IDC believes there are three components that need to be fulfilled for an organisation to be truly customer centric and provide real customer value:

Context and consistency: Does your organisation engage with your customer in a context aware and relevant manner? With the rich array of analytical and engagement tools now accessible to companies, there is no excuse to continue to mass customer strategies.

Convenience and customer value: Organisations can provide various channels for customers, but it is important these channels provide value. “How much effort does the customer have to invest in to engage with your organisation?”

Collaboration and communication: IDC says social collaboration tools enhanced employee collaboration and information sharing, but are “massively underexploited”.

Prediction 4: Scalability will become an area differentiation for IT vendors as the market becomes saturated

To be more strategic, agile, and engaged, the CIO of the “third platform” will seek a greater engagement with third party service providers. IDC notes the challenge will be to create a compelling enough reason for more CIOs to relinquish control and embrace the new model.

Prediction 5: The Internet of Things (IoT) will drive the development of scalable commercial models

IDC predicts the technology and services revenue, as well as the installed base of the Internet of Things, will accelerate in New Zealand in 2014. This trend is largely driven by intelligent systems that will be installed and collecting data — across both consumer and enterprise applications. ITSPs (including mobile network operators) have an invaluable and almost unlimited opportunity in providing connection services for IoT. However, these ITSPs will be looking for other opportunities as well to build up the intrinsic value of their offering.

Agriculture is one sector where IoT can have an impact. For instance, sensor-based wireless used to track health and fertility in cows already exist in New Zealand and will become "mandatory" for success.

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