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Tech Trends 2016 Innovating in the digital eraDeloitte Consulting LLP’s Technology Consulting practice is dedicated to helping our clients build tomorrow by solving today’s complex business problems involving strategy, procurement, design, delivery, and assurance of technology solutions. Our service areas include analytics and information management, delivery, cyber risk services, and technical strategy and architecture, as well as the spectrum of digital strategy, design, and development services oer ff ed by Deloitte Digital. Learn more about our Technology Consulting practice on www.deloitte.com. Contents Introduction 2 Right-speed IT 4 Augmented and virtual reality go to work 20 Internet of Things: From sensing to doing 34 Reimagining core systems 48 Autonomic platforms 64 Blockchain: Democratized trust 80 Industrialized analytics 96 Social impact of exponential technologies 112 Authors, contributors, and special thanks 126Tech Trends 2016: Innovating in the digital era Introduction In a business climate driven by powerful digital forces, disruption, and rapid-fire innovation, every company is now a technology company. Whereas technology was traditionally confined largely to operations and execution, its digital expression now informs all aspects of business, from ideation to delivery. We witness daily how it drives product design, upends venerable business models, and rewires competition. e a Th scendance of exponential technologies to a place of strategic primacy has occurred within a turbulent context. Globalization is driving borderless growth across established and emerging markets. Barriers to entry are being lowered, if not demolished. In this climate, new entrants focused on niches, specific functions, and overlooked domains can make meaningful impacts on a global stage traditionally dominated by the world’s biggest players. At the same time, customers are demanding evolved methods of engagement that are personalized, contextual, and tailored for individual usability and utility. Likewise, the very nature of employment is evolving as new skill sets become bargaining chips. Talent scarcity complicates efforts to rethink operating and delivery models across functions and domains. To help make sense of it all, we present Deloitte’s seventh Technology Trends report, our annual in-depth examination of eight trends that are likely to disrupt businesses in the next 18–24 months. From blockchain and augmented reality to the Internet of Things and the socially responsible applications of technology, these trends embody the macro forces fueling innovation: digital, analytics, cloud, and the changing role of IT within the enterprise. We balance our coverage of each trend by also considering the implications of cyber risk in the areas of security, privacy, regulatory mandates, and compliance. We intentionally examine cyber risk not as a separate topic, but as an enterprise discipline embedded in the planning, design, and realization of each individual trend. e t Th heme of this year’s report is innovating in the digital era , which is inspired by the opportunities today’s CIOs—across industries, geographies, and company sizes—have to shape tomorrow for every corner of their organizations by transforming “business as usual.” These leaders are in a rare position to imagine a future, and then harness innovation to build it responsibly from the realities of today. 2Introduction Tech Trends features perspectives from client executives, industry and academic luminaries, and our global network of Deloitte professionals, all exploring major trends that are helping organizations innovate in the digital era. We also examine the roadmaps and investment priorities of start-ups, venture capitalists, and leading technology vendors. As you read the following chapters, we challenge you to think beyond the “what” of digital innovation—the shiny objects, applications, and capabilities—to the “so what”—how you will harness emerging trends, innovation, and disruption to create real business value. Viewing the horizon through this paradigm, recognize that the precision to which we’ve all become accustomed may no longer be a given; in the age of digital innovation, we are exploring largely uncharted territory. Moreover, any digital transformation journey should also address the more practical realities of today—reimagining core systems, industrializing analytics capabilities, building autonomic platforms—which are by no means trivial. Over the next 18–24 months, the only constant may be the specter of constant change. Amid this turmoil, organizations that can confidently and purposefully harness technology trends will find great opportunities to refocus, to revitalize, or even to inspire. Think beyond incremental adoption patterns. Look not only for ways to do familiar things differently, but also to do fundamentally different things. Launch new processes, products, and services, and seek out new ways to compete. No matter what the scope, the time for you to act is now. Build tomorrow, starting today. Bill Briggs Janet Foutty Craig Hodgetts Chief technology officer Chief executive officer and US national managing Deloitte Consulting LLP chairman director—Technology wbriggsdeloitte.com Deloitte Consulting LLP Deloitte Consulting LLP Twitter: wbdthree jfouttydeloitte.com chodgettsdeloitte.com Twitter: janetfoutty Twitter: craig_hodgetts 3 Right-speed IT Right-speed IT Living between black and white Many IT organizations are progressing beyond the traditional single-speed delivery models that work well for high-torque enterprise operations but not for high-speed innovation. While some do have needs at both ends of the speed spectrum, they often find that bridging the gap between the two is difficult. A growing number of CIOs are building capabilities that link the two edge points or operate along the continuum, with targeted investments in process, technology, and talent to reengineer the business of IT, enabling delivery at the right speed for the business. A long-standing phenomenon has garnered is oen f ft ramed between waterfall and agile much mindshare in recent years: the essential delivery methods, as if agile techniques were tension between stability and agility in IT. On the mythical savior of digital innovation and one side are the predictability and controls growth, yet inappropriate for larger enterprise- necessary to manage risk while delivering delivery models. For most organizations, large-scale enterprise IT with reliability, speeding up the development process is only 1 scalability, security, and other “ilities.” On part of the equation to accelerate time to value. the other is the push to drive discovery and Leading organizations are building on the experimentation around new features, tools, simple two-speed IT mindset and recognizing and technologies. Popular memes have they must be able to support a continuum of oversimplified the conflict between these speeds in order to dial in the right approach extremes, suggesting a bifurcated, either/or for a specific initiative, with the underlying proposition, while oer ff ing little guidance on disciplines, capabilities, platforms, and talents managing the unavoidable gap between the to appropriately support the actual breadth two priorities. of business needs. The speed of IT should be er Th e are also several unfortunate as fast as possible, balancing business value, misconceptions linked to the bimodal theory. risks, and technical feasibility. Critically, the First, there’s the fallacy that the pivot point is approach must handle the governance around solely around speed, trading “high torque” for the appropriate speed as well as the inevitable scale versus “high speed” for responsiveness. collision between teams and efforts running This paints traditional enterprise delivery at different speeds. This transmission turns out with the plodding caricature that plagues to be the essential ingredient missing in other many IT departments. Second, the debate constructs. It helps identify the appropriate 5                       Tech Trends 2016: Innovating in the digital era treatment for a given initiative, assists in showdown. Delivery is an important finding solutions, and navigates what controls ingredient, but upstream capabilities are are required. actually just as important when codifying Right-speed IT must address three broad right-speed IT. categories: procedural, architectural, and Consider how building reach and rigor organizational. Let’s move beyond rhetoric and in the following IT capabilities may help dig into each area. organizations reach the right speed for the job at hand: Procedure beyond process • Finance management: Budgeting, Many IT transformation prescriptions prioritization, allocations, and accounting portray delivery methodology as the hero of treatments all need more flexibility than the story. For this reason, bimodal is oen ft annual appropriations, rigid planning misinterpreted as a waterfall-versus-agile cycles, and depreciation schedules do. Figure 1. Right-speed IT operating model dashboard Finding a balance between high-torque enterprise IT and high-speed innovation IT can allow companies to optimize technology operations. CIOs can calibrate the interrelated core capabilities below to find a point along the spectrum between the two models that meets the needs of a given program, project, or product.                                                Making decisions about technology Defining culture, responsibilities, Determining how software investments and new sources of roles, and approval workflows, developers and IT operations business based on the marketplace, coordinating management methods, teams integrate, collaborate, internal development capacity, and optimizing employee skill base automate, and deliver solutions and financial and human capital and productivity through training through standards, processes, commitment levels and recruiting and methodologies 6                      Right-speed IT Failure to address the differences in given project or product. Offer the team time-consuming finance management guardrails as they combine governance, processes as part of an overall right- controls, delivery model, enabling speeding initiative is a missed opportunity. processes, and stage gates to balance Addressing these differences can increase business impact, technical vision, and risk. efficiencies upstream in finance and downstream in IT processes. • Stakeholder communications and expectation management: Don’t hold • Procurement and sourcing: Similarly, back for a large periodic release. Instead, multi-month RFP processes, drawn-out increase the number of releases or user vendor assessments, and sourcing strategies previews to demonstrate progress. Gamify focused on cost takeout are sometimes testing and reward members of the user appropriate. But they also are not the community for providing feedback. Even only game in town. Codify paths to adopt if these releases are not destined to be put open-source solutions such as platforms, into production immediately, providing libraries, and code-bases that could users and stakeholders with evidence of jump-start efforts across the continuum. tangible progress can make the process Consider alternative talent pools, from seem quicker. crowdsourcing to code-a-thons to academia to externships. The underlying building • DevOps: Try to determine the granularity blocks need to be available so you can of control points, formality of reviews, and shift gears to accommodate the needs of the appropriate level of automation that individual initiatives. will be needed for the effort. Right-speed IT efforts oen co ft incide with investments 2 • Vendor and contract management: in autonomic platforms that can help Revisit nondisclosures, intellectual move more of IT’s underlying workload property protection clauses, and to labor-free, seamless tasks (or at least traditional segmentation of provider introduce automation to eliminate waste tiers. Consider creating new categories in the end-to-end lifecycle). The scope of engagement that can be deployed could include environment management, against efforts beyond simple fixed-scope requirements management, testing and traditional service-level agreements. automation (regression and beyond), Encourage value-based arrangements and configuration, build, and release where vendors are compensated based management. Importantly, that also on outcomes, potentially along with includes the ability to roll back deployed co-investment scenarios involving solutions from production. joint solution development and go-to- market arrangements beyond traditional Architecture is destiny supplier/vendor or contractor/consultant Right-speed IT should also be informed relationships. Revisit nondisclosures, by overarching principles and programs that intellectual property protection clauses, and form the underpinnings of responsive, fungible traditional segmentation of provider tiers IT capabilities. These are, aer a ft ll, the same that may unnecessarily constrain potential principles and programs that will also inform partnering arrangements. future architectures and applications. As such, it is important to create an engineering culture • Solution shaping: Beyond determining in IT and a product management mind-set: the recommended end-to-end architecture, Both can help IT leaders balance tradeoffs ascertain the appropriate speed for a 7Tech Trends 2016: Innovating in the digital era of opposing constraints and find the best Organizational realities 3 solutions for problems at hand. Specifically, e t Th hird right-speed category involves consider focusing on three main domains: talent and organizational constructs. As design, master data and integration, and sometimes happens, getting the procedural and building to run. architectural aspects right might be the easy 4 part. Indeed, it’s oen t ft he people side that can • Design as a discipline: Emphasize user be more unpredictable and harder to influence. engagement and a persona-based approach Changing IT’s reputation as a static, sluggish to project delivery. Regardless of speed or organization to one that delivers solutions mode, solutions should approach problems dynamically and at the right speed requires a from the user down, respecting but not purposeful focus on four key areas: being constrained by systems and data implications. Detailed behavior studies, • Mind-set/culture: Author Nilofer Merchant journey maps, user personas, storyboards, wrote, “Culture drives innovation and wireframes, prototypes, and other whatever else you are trying to accomplish techniques for creating intuitive, simple within a company—innovation, execution, designs may not be appropriate for every whatever it’s going to be. And that then initiative. But by placing some techniques drives results . . . It’s the people, the and associated artifacts into your arsenal, leadership, and the ideas that are ultimately usability will be part of the DNA of 5 driving the numbers and the results.” When future projects. it comes to successfully increasing the speed of the processes your IT organization • Master data and integration: Individual uses to deliver solutions, instilling an projects should be expected to reuse engineering culture that emphasizes both underlying services and data. Likewise, accountability and flexibility is critical. Your designing new capabilities specifically employees’ mind-sets will drive them to for eventual reuse can help expand the learn new ways of working and delivering library of APIs and extend the reach of data business value. management efforts. Though expectations will vary based on the size and mode of • Leadership: Culture starts with leaders, the project, adherence to existing data and it is shaped by your leaders’ actions and and interface standards should be a decisions. In right-speeding IT, the leaders universal mandate. will define and reinforce the mind-set needed to make the right decisions about • Building to run: Embed tools geared where on the “right-speeding continuum” toward ongoing monitoring and a specific initiative should fall. Leaders will maintenance of solutions. Instrumentation, mentor their people to work differently management consoles and script, and and more flexibly to both provide the hooks for in-line monitoring of system and right project controls and deliver faster. higher-level business performance should If you don’t have leaders who understand be considered. Coverage and granularity of the right-speeding strategy and goals, controls need to be able to scale up or down and if your leaders are not driving and depending on the mode of delivery. But a supporting your people, it is unlikely you playbook of potential options, supported by will be successful in changing how IT shared libraries and code snippets, will help delivers solutions. make adoption systematic. • Talent: Recognize that different personalities and skill sets will be better 8 Right-speed IT suited for different modes of right- workers are no strangers to highly matrixed speed IT. Blanket assumptions around environments. Orienting evaluations generational dispositions are not enough and formal feedback around project here. Rather, this situation requires a objectives can help remove confusion deeper understanding of your talent pool— and align everyone working together each individual’s capabilities, passions, around common goals. Use departmental aspirations, work styles, and attitudes. assignments to build scale and common Rotational assignments that transition standards, methods, and tools. At the workers through project and delivery types same time, eliminate barriers that could can help broaden employee skill sets. But prevent individuals from making the best recognize that some of your people will decisions, taking action immediately, and be best served by being given relatively driving project goals. Another component static assignments. That’s OK, assuming of right-speed IT involves holding daily there is enough demand for those types stand-up or triage meetings in which of assignments in your overall portfolio. department and domain leads converge not Develop learning and development merely to hear pending design decisions programs to help acclimate the workforce or project issues, but to take immediate around right-speed IT nuances, as well action on them. This cadence alone can as to nurture new capability building and help eliminate bottlenecks and alleviate knowledge transfer across the organization. employee frustration. Consider partnering with outside entities that have experience and expertise in • Incentives: What gets measured gets aspirational delivery modes. For example, done. Rethink metrics and measurements veteran Scrum masters or UX engineers are across the board, from project tracking invaluable as you shift to agile development to individual performance management. or user-centric design patterns. Create explicit goals that teams can rally behind, ideally linked to product • Organizational structure: With their accomplishments or business outcomes reporting models and career incentives versus tactical behaviors that address empty split between the P&Ls and their jobs, IT organizational constructs. 9Tech Trends 2016: Innovating in the digital era Lessons from the front lines Working within the new model, teams Thinking is believing comprising existing and new talent along During HP’s historic 2015 split into two with a functional expert—typically a system companies, Neeraj Tolmare led the end-to- architect who knows a specific space—are end separation of more than 1,500 of the assigned to work in pockets of fast-paced company’s global applications. To complete development throughout the enterprise. In this gargantuan task within an accelerated six- an effort to find the right mix of skills and month time frame, Tolmare’s teams worked at abilities for each type of project and to expose different speeds, following guidelines tailored developers to different methods and tactics, the to their individual tasks. In this model, some company also regularly moves talent around, teams completed tasks in a matter of hours, assigning individuals to work on various while others worked for days, using a variety teams. “Sometimes team members struggle of techniques and approaches, to accomplish with the idea that a project is no longer strictly more complex goals. “It took teams a couple waterfall or agile, but a combination of the of months to become comfortable working at two,” says Tolmare, “but over time we’re seeing varying speeds, but eventually most did,” he them adjust their thinking, and work very says. “e Th y all understood there would be no 6 differently than they have in the past.” Day 2 unless we all got to Day 1.” Tolmare is now driving efforts to transform Collaborating at the right speed the digital imprint of HP Inc.—the post- division entity that sells PCs and printers. For integrated technology solutions Part of this broad-ranging initiative involves provider CDW, finding the “right speed” for its reinventing the way the company develops IT organization within a dynamic environment technology products. “Our existing model is more than a trend—it is a tested strategy for was too rigid; it could take us six months to success in a sector defined by near-constant engineer and launch a solution,” says Tolmare, disruption. CDW has deployed a model in who serves as HP Inc.’s vice president and head which IT collaborates with the business to of Digital Transformation & IT Applications, develop solutions that meet its customers’ Global eCommerce, P&L Management. “We evolving needs—with each team working at realized that if technologists are going to a tempo that fits each project’s specific goals have a seat at the table and participate fully in and circumstances. Some teams sprint, others strategic decision-making, we would need to walk at a measured pace, but each is guided by create a flexible, fluid product development a solution framework defined not by the speed model that would empower them to respond to of the delivery model, but by approaches to the dynamic needs of the business.” architecture, security, controls, deployment, e de Th velopment model Tolmare and his and associated metrics. colleagues are creating is designed to “infuse This collaborative development strategy new thinking” into development teams has not only helped CDW turn technology accustomed to working primarily within into a competitive advantage; it has informed standard systems development lifecycle IT’s approach to meeting its mission, says (SDLC) models. To support the model, the Jon Stevens, CDW’s senior vice president company is reskilling existing talent by helping of operations and chief information officer. them to grow and diversify their individual “For IT to be truly agile and responsive, our skillsets, as well as to become familiar with development teams tailor their efforts to meet agile techniques. 10 Right-speed IT the distinctive needs of each business group. In always thinking about how technology can 7 this environment, one size does not fit all.” drive innovation and competitive advantage.” For example, CDW’s e-commerce group has organized its teams into product groups Super-regional transformation that work in a way that reflects its approach to Since its founding in 1921, State Auto business: iterative, innovative, and fast-moving. Insurance Companies has embraced the Each team includes a business leader, product independent agency system as the best way managers, and a technology leader who, to meet policyholder needs. To this day, together, continually build upon successes or independent agents within the regional fail fast and move on to the next idea. Team underwriter’s network strive to provide highly members work closely with the DevOps personalized service to customers who, in team, which shepherds new products and 8 many instances, are friends and neighbors. enhancements through security and regression a Th t legacy is actively being transformed by testing, and then onto a release platform. technology. The company is building a more Meanwhile, other parts of the CDW IT competitive cost structure, launching analytics- organization approach development differently. informed products, shifting to digital customer Teams supporting finance, for example, follow engagement, and revamping the sales process. a different methodology and governance According to State Auto CIO Greg Tacchetti, model that allow them to move at an “er Th e’s not a single thing we’re not changing.” appropriate pace for maintaining compliance Importantly, Tacchetti is charged not only within systems that must meet specific with transforming IT, but also with developing regulatory requirements. overall business strategy. To this end, he is Regardless of approach, all IT efforts share working with product teams to define the core business value drivers: revenue, lower product roadmap and make sure they have the SG&A, higher gross prot, g fi reat customer right architecture to support it. experience, and co-worker engagement. And IT is being transformed along several regardless of the development methodology dimensions. A modular architecture or processes followed, IT engages with other standardizes interfaces and data definitions. groups—business, audit, and security, for Tacchetti is aligning programs to reduce example—so stakeholders are in lockstep redundant effort and divergent investments and there are no surprises. These groups are across business lines. He’s also carving out not looked at as separate departments with sandboxes, tools, and platforms to allow the process-laden boxes to check. Instead, they are business to experiment and spin up new embedded across the lifecycle—from ideation environments to vet ideas—scaling those that through ongoing operations. show promise, and decommissioning those e t Th echniques CDW’s IT organization that do not. deploys to help the company achieve results Also, as part of the larger transformation continually evolve as new technologies emerge effort, Tacchetti is crafting a long-term plan and market dynamics shift. Yet amid this to build a multi-modal IT organization. change, the philosophy underpinning CDW’s His vision is for an IT organization that collaborative, flexible approach to IT remains can work across the enterprise, not only as constant. “It’s ultimately about the partnerships technologists, but also as business strategists you build with the business and with your who can create the systems architecture external partners,” Stevens says. “Not too long and revamped business processes needed to ago the question was, ‘How do you get a seat at increase efficiencies, lower costs of system the table?’ Now, it’s about working as a team, ownership, and make State Auto’s oer ff ings 11Tech Trends 2016: Innovating in the digital era more prot fi able. A key part of that change is a fivefold increase in the number of release a focus on design and usability—creating an opportunities year over year—a staggering emphasis on end-user experience and journey achievement, albeit one Diaz and his team maps. This focus extends throughout IT’s value view as “still not good enough.” chain: program design, product design, project As part of the continuous delivery program, design, development, and post-go-live. Case in the company consolidated its fragmented point: State Auto is in the midst of a platform approaches to agile development. Six quarters transformation effort that is scheduled to go ago, 62 percent of projects were delivered using live later this year. Its scope is much more than traditional waterfall methodologies. As of the replacing the core policy engine; the platform last fiscal quarter, over 82 percent of projects will serve as the backbone for new products were developed using agile; the remainder and capabilities, including customer self- were developed using hybrid techniques service and an overhauled CSR experience. that condense and accelerate the traditional Tacchetti envisions the day when 12-month enterprise application development cycle. projects are a thing of the past. “A year “We’ve learned some great lessons, and we from now, I want to be talking about rapid have made great strides shifting our culture experimentation and agile techniques. We’ve to a mindset of innovation, visualization, and started conversations about weekly releases,” he rapid feedback. Faster IT requires a culture says. With its focus on speed and strategy, State of increased accountability to quality while Auto’s IT organization is on a journey to help focusing on developer productivity with drive and realize the business agenda—not just technology and automation,” says Diaz. 9 execute on defined requirements. Cisco continues to invest in architecture and is working to extend its cloud footprint by digitizing its foundational platforms for Architecture-led, source control, build, review, and deployment. services everything e co Th mpany is also investing heavily to Cisco’s reputation for technology weave APIs into the network, and to deploy innovation applies to its internal IT containers and middleware components organization, which is on an ambitious to abstract, encapsulate, and execute on its transformation journey to digitize IT and overall vision. drive faster delivery of business outcomes. Importantly, Cisco has created a continuous At the same time, Cisco IT must continue delivery model on this digital foundation. to improve operational excellence, security, “Right-speed IT is about applying the amount compliance, resiliency, and quality. Clearly, of rigor and diligence that is appropriate for this is an ambitious effort that defies simple each business application,” says Diaz. For transformation models. example, high levels of rigor are needed when For Guillermo Diaz, Jr., senior vice working with ERP, whereas less complex president and CIO of Cisco Systems, “er Th e’s applications may not require the same level only one right speed for IT: faster and more of intensity. “We’ve implemented the digital secure.” To meet Diaz’s expectation on this architecture that makes it possible for us to front, Cisco has transformed key capabilities, move at the speed of the business while also beginning with release management. working appropriately with each business Historically, system changes were limited to applications and ensuring security,” says Diaz. four major and twelve smaller releases per year. Diaz reports that since embarking on this By creating a continuous delivery mind-set, transformation journey, Cisco’s IT organization adopting agile methodology, and automating has seen a 97 percent increase in project the development process, Cisco has realized velocity, a 92 percent improvement in quality, 12 Right-speed IT and, notably, a 79 percent increase in timely the cost of ensuring our business is secure,” he closure of security vulnerabilities. “We wanted says. “Our ultimate vision is to enable business 10 to drive agility, simplicity, and speed, but not at value faster.” 13Tech Trends 2016: Innovating in the digital era MY TAKE MARCY KLEVORN Vice president and CIO Ford Motor Company Ford Motor Company is building on its 112-year-old available for an hour every day for a triage meeting. legacy, driving new offerings in connectivity, mobility, During this hour, project teams can raise problems autonomous vehicles, and the customer experience, and work through them with the management team. along with big data and analytics. With technology- Increasingly, senior business leaders take part in these based innovation fueling investments in new products, proceedings as well. What’s more, team interaction services, and customer engagement models, IT is and collaboration are replacing traditional siloed evolving to embrace emerging technologies that could mind-sets and formal processes for issue tracking potentially disrupt the way we design and manufacture and remediation. products or understand and engage customers. That means investing in our 11,000-person IT “...No one-size-fits-all; your organization to better support the kind of nimble, company’s culture influences the accelerated product exploration and development we need to lead in our current disruptive technological speed and reach of change.“ climate. We recognized early on that a continuum of delivery models was needed, so we simplified the story to think about IT delivery in two modes. Enterprise It is important not to underestimate the impact all of mode covers mature core businesses where risk needs this can have on traditional IT talent models. Will you to be fiercely managed—the processes for how we risk losing long-time IT employees? Maybe. Will you design, manufacture, and service our vehicles. The find it challenging to recruit individuals with needed emerging mode (“Mode 2”) encompasses areas where development skills in a market where competition for we are learning, experimenting, and iterating with talent is heating up? Probably. Given the scale and new technologies. complexity of Ford’s IT ecosystem, these two prospects occasionally keep me awake at night. But we’re making We determine the right mode of delivery by risk, not progress. We’ve made key external hires and entered speed. We strive to deliver every project as quickly as is into new partnerships in order to acquire specific skills appropriate, following the same overarching process. If and experiences. We have also made a commitment to projects meet certain conditions, they can take “happy reskill our employees, creating a program called “Power paths”—an accelerated process that abbreviates certain Up” that offers opportunities to learn new skills and requirements and controls. Our modes don’t translate recharge existing ones. We rotate our people between into waterfall versus agile delineations. While Mode 2 emerging and enterprise projects—we can’t have two projects largely use agile, they often have interfaces different classes of citizens in IT, and we are very careful into core systems, which requires taking a hybrid not to disenfranchise our base. approach. And more than half of enterprise-mode projects are now delivered with agile. Finally, I believe IT works best when driven by core principles. At Ford, vertically focused development Although our transformation journey is unfolding, we sometimes had the unintended effect of emphasizing can share a few lessons we’ve learned so far. First, no corporate needs—which is inconsistent with our one-size-fits-all; your company’s culture influences company’s guiding principle of placing customers the speed and reach of change. Regardless of mode, at the center of everything we do. In our bimodal we depend on team members to exercise their approach, development is horizontal, driven foremost own judgment. We have a program affectionately by the impact any new product will have on the called “You Drive” in which we empower team customer. It is an ambitious vision, but we are learning members to speak out and share ideas for improving and making progress each day. project outcomes. We are also constantly looking for new ways of working. For example, our senior IT managers are 14 Right-speed IT CYBER IMPLICATIONS A sophisticated understanding of risk can prove IT to establish operational baselines. Then, from invaluable as CIOs build new IT delivery models and a cybersecurity standpoint, determine what assign optimum development speeds for new initiatives. “normal” looks like for user behavior, server loads, With detailed knowledge of security, privacy, risk, and data exchange, access, and external connectivity. compliance, CIOs can weave these disciplines into Understanding what normal is can help IT identify the fabric of all development and operations. This elevated risk situations when they occur and is a lofty goal, even in the most cyber-focused of react accordingly. IT organizations. But it can be achieved by making • Resilient: Is your environment safe enough to restore “secure by design” a part of any broader right-speed normal operations following an attack? If the answer IT transformation. is “no,” you have a problem. If the answer is “I Cybersecurity can’t just be focused on compliance don’t know,” you have a bigger problem. Proactively and executed using dated controls and one-size-fits- create plans for recovering from various attack all stage gates. Right-speed IT requires scenarios, test them often, and be sure to agility up, down, and across project incorporate lessons learned back into lifecycles—from ideation to your operational plans to further budgeting and from planning to accelerate detection and reduce delivery. Security and privacy impact in the future. concerns can undermine any According to Deloitte’s 2015 initiative, particularly those global CIO survey, only 18 focused on new business percent of CIOs surveyed opportunities or built on see cybersecurity as a top emerging technologies. business priority. Yet, by But cybersecurity does the same token, 58 percent not have to impede of respondents said the innovation. Indeed, leading investments they are making organizations are involving now in cybersecurity and data progressive cyber professionals privacy will have a significant throughout the development impact on the business within process to evolve designs and 11 the next two years. The CIO’s approaches in ways that help challenge is to convince the entire balance functionality, time to value, and enterprise—from IT, to the business, and then underlying security, privacy, regulatory, and rippling out to the C-suite—that “secure by design” compliance needs. At the same time, right-speed should be treated by the business as a business priority. concepts can be applied to cybersecurity efforts by introducing shared platforms or tools that make it This forward-looking approach to the cyber risk agenda possible to leverage, self-assess, escalate, and certify can be a fantastic component of the CIO’s legacy. The against protocols and control points. board and the C-suite have cyber implications on their minds. Progressively building cybersecurity responses IT organizations can transition to a secure-by-design into reconstituted IT delivery and operating models mind-set in three stages: should be a part of how right-speed IT initiatives are positioned. • Secure: Start with tactical steps to create highly virtualized, templated stacks. This establishes a sound, When it comes to cybersecurity, there is no “going back standards-based way to build cybersecurity into the to normal,” no matter how much we wish we could. fabric of the IT environment, with infrastructure The question becomes how organizations can best automatically inheriting patches, configurations, and understand risk, control for it to the extent possible, cyber-solution elements. and then prepare for and respond to the inevitable. • Vigilant: Build a cohesive monitoring/threat intelligence platform that makes it possible for 15Tech Trends 2016: Innovating in the digital era Where do you start? Pieces of right-speed IT are likely already incremental enhancements to existing in play in many organizations. Once there, the oer ff ings. To foster a culture of innovation, trick becomes bundling individual initiatives consider creating a cadence of product into a more prescriptive whole, and evolving roadmap briefings with established vendor in-flight bimodal programs to include nuanced partners, as well as discovery sessions with capabilities across more than a dualistic venture capital firms, start-ups, incubators, spectrum. Consider how the following lessons and local academic hubs. Incent teams learned by early adopters might help you on to explore emerging technologies and both fronts: file patents. All of these steps can make “innovating” a key requirement of each • Balance sheet of IT: Do you have visibility person’s job. into the various assets that make up IT? What about programs and projects • Marketing: IT is historically awful at underway and the backlog of business self-promotion. Right-speed IT can help needs? Beyond basic inventories, is there CIOs shift their organization’s mind-set strategic dispositioning of IT’s balance sheet about IT and how it engages the other according to value, committed resources, groups. To help stakeholders both inside and risk? Do you have a service catalog that and outside of IT embrace this perspective, delineates the capabilities being delivered consider launching a full-fledged marketing throughout IT—what they are, key campaign to bolster IT’s reputation and measurements, and how to engage? These drive awareness of the changes afoot. and other foundational elements of any IT Implement dashboards and provide full department are critical to the success of any transparency into not only the service right-speed IT initiative. The balance sheet catalog, but also IT’s progress addressing and service-catalog constructs provide a the business’ goals. Use KPIs focused on backdrop for allocating specific projects and business impact at the shareholder-value programs to appropriate delivery models. level to effectively track project health and expected return on spend. • Cool kids syndrome: Bimodal constructs oen cr ft eate a “haves” and “have nots” • Informal collaboration: Unplanned and caste system that divides IT workers by impromptu interactions between team area of focus and work mode. Right-speed members can bring together different IT sidesteps this outcome by creating perspectives and shine new light on rotational constructs and oer ff ing a wide problems and possible solutions. Invest in range of speed, platform, and delivery collaboration tools that make it possible for methodology combinations. Even so, be project teams to share ideas, brainstorm 12 up front with your employees about the new ones, and tap into collective wisdom. skills that will be prized in the future. As • Hold the line: Determine the appropriate part of that same discussion, oer w ff orkers speed for any given project, and enforce opportunities to learn new skills and strict compliance with your decision. In the develop expertise. Also, accept that not early stages, it is easy to let project speeds everyone can or will want to be a part of the uc fl tuate based on paths of least resistance right-speed journey. or institutional inertia. Don’t let teams • Distributed innovation: Everyone should follow their instincts. Hold employees innovate, not simply to create breakthrough accountable for following the new IT new products or services, but also to drive delivery model at all times. continuous improvement of delivery or 16 Right-speed IT Bottom line Right-speed IT is an acknowledgement that IT departments need more ammunition to organize, interact, and deliver value to the business. Bimodal constructs oen s ft trike a chord with their 13 simplistic framing. But projects oen r ft equire additional gears that meet their specific needs and cadences. With investments in foundational and flexible procedural, architectural, and organizational domains, right-speed IT can help turn simplistic models and philosophical discussions into concrete value. 17Tech Trends 2016: Innovating in the digital era Authors Mark White, Products & Solutions Ideation and Strategy principal, Deloitte Consulting LLP Mark White has served as US, global, and federal Consulting chief technology officer. His clients include organizations in federal, financial services, high-tech, telecom, and other industries. He delivers critical business solutions in areas including solutions architecture, data analytics, IT operations, and infrastructure design. He is a frequent speaker at global conferences and is regularly quoted in the media discussing the impact of technology on business and government. Judy Pennington, Organization Transformation & Talent director, Deloitte Consulting LLP Judy Pennington has more than 25 years of experience working at the intersection of people and technology. Pennington helps IT clients assess their operating model, organization structure, processes, and workforce, assisting them in designing solutions to increase efficiencies and employee engagement. She focuses on IT talent management strategy/ implementation, workforce planning, IT governance, organization structure/strategy, learning strategy, and outsourcing. Tom Galizia, US Technology Strategy & Architecture leader, Deloitte Consulting LLP Tom Galizia focuses on new, enabling information technology capabilities that can help organizations effectively navigate changing market dynamics, deliver business strategy and transformation, and drive efficient IT operations. Galizia has 20 years of experience working across many industries. He specializes in industry-specific solutions, emerging market growth, M&A diligence and integration, service delivery, global supply chain, and leasing. Mike Habeck, US IT Business Management practice leader, Deloitte Consulting LLP Mike Habeck has over 20 years of experience, both as a consultant and in executive roles, in delivering solutions intended to optimize and transform IT technology and operations. His deep insights and understanding of technology, operations, and strategy help clients envision how technology strategy, infrastructure, and IT service delivery models can help them achieve their business goals. 18