In their 2014 CIO Agenda report Gartner describes how ‘Taming the Digital Dragon’ (12 page PDF) is key to digital transformation strategies, with the hybrid cloud platform model as the enabling technology blueprint and business model.
As their ‘We are here’ arrow describes, Gartner proposes we are at the transition point from a second to a third generation of IT, the shift from IT industrialization to digitization, where the key skills of a CIO are business models and digital leadership, rather than just IT service management aka a shift from the CIO to the CDO – chief digital officer.
This corresponds with the view of Mike Rosen of IDC, who describes platforms as a third generation.
As Gartner concludes: “CIOs now face the challenge of straddling the second era of enterprise IT and a new, third “digitalisation” era — moving from running IT like a business within a business, into a period characterised by deep innovation beyond process optimisation, exploitation of a broader universe of digital technology and information, more-integrated business and IT innovation, and a need for much faster and more agile capability.”
Gartner principally characterizes this heightened capability in terms of competitive threat and advantage: “All industries in all geographies are being radically reshaped by digital disruption — a “digital dragon” that is potentially very powerful if tamed but a destructive force if not. It’s a CIO’s dream come true, and also a career-changing leadership challenge.”
They describe it as a dragon because it so effectively destroys the competition in its field, through a massive scale of technology leverage such as Netflix, Airbnb and Uber, with brands like Kodak or the Blockbuster video rental chain examples of those being destroyed by failing to adapt to this digital disruption.
These ‘digital unicorn’ startup firms have generated billions in shareholder value in only a few short years specifically through this principle, achieving inventory levels of the world’s largest players simply through smart use of IT.
To replicate this level of IT-driven success experts recommend CIO’s embrace the threat as a career opportunity, such as Harvard urging CIOs to take a leadership role, and also to become ‘digital mentors.’
Research and insights from Deloitte and Gartner show that the demand for implementation of new digital capabilities will ultimately mean a large and sustained market for digital transformation skills, with considerable recognition and reward for those CIOs synonymous with advanced, successful digital programs.
Hybrid cloud business model
This article provides the introduction for our new eBook: Enterprise Cloud – Data Centre and Application Modernisation Blueprint.
Utilising design models like hybrid cloud is central to the scope of this paper: the overall goal is to provide enterprise decision makers with the full spectrum of topics they need to address that scale of cloud adoption, and these high level strategy frameworks are ideal to set the scene.
Gartner describes how hybrid cloud enables increased adoption of public and private IaaS, PaaS, SaaS and BPaaS, making a ‘Bi-modal IT’ framework possible, made up of three core foundations:
- Moving to a more loosely coupled “postmodern-ERP” paradigm – More federated ERP, multi-enterprise solutions, cloud components, mobile support, embedded analytics.
- Creating the information architecture ad capabilities to exploit big data – Handled through in-memory databases, advanced analytics, unstructured and multimedia data.
- SME innovation ecosystem – Augmenting conventional sourcing with more innovation, including sourcing from, and partnering with, smaller and less mature enterprises, in key categories of partners: mobile, design, etc.
Their central thesis is that the hybrid cloud model is key to the CIO strategy to ‘renovate the IT core’, modernizing the legacy estate to enable new digital strategies and thus provide the tool set for meeting the challenge of digital native competitors.