The Intelligent Business

Executive summary

Digital transformation is at a turning point. Sure, businesses have been augmenting their infrastructures with advanced data management solutions, emerging technologies, and the next generation of networks. But only a few companies (8% of those surveyed) are successfully using infrastructure to connect data from edge to edge—across their endpoints, networks, and cloud services. We call these companies the Committed Investors.

Committed Investors are making bold moves when it comes to investing in infrastructure—a strategy that might sound counterintuitive against the headlines of hot technologies. These moves are helping to improve their customers’ experiences, shorten innovation cycles, and boost operational efficiency.

The research in this report is based on a survey of 795 non-IT executives in Asia Pacific, EMEA, and North America, from the retail, manufacturing, transportation, healthcare, and financial services industries.

Invest heavily now— or pay the price later

Upward trajectory

Investments in technology infrastructure are expected to shoot up.

The majority of businesses are committed to upgrading their technology infrastructures and are investing to propel their transformation programs.

For instance, 71% of respondents have increased their technology infrastructure spending over the past 12 months; it’s projected that 98% will increase their spending over the next year. 8 in 10 are also investing in technology infrastructure to keep pace with evolving customer expectations.

This increased investment appears to translate into improved outcomes across the business. Over the same time frame, more than 75% of respondents report ‘improvement’ or ‘significant improvement’ in areas including customer experience, time to act on new opportunities, and operational efficiency.

Priority check on tech

Executives agree that next-generation technology infrastructure will fuel competitive edge.

However, several internal barriers suggest that many business leaders are struggling to make long-term strategic decisions. For example, more than 1 in 5 are fearful that they do not have the knowledge they need to scrutinize their IT function’s approach and strategy, while one-third are struggling with competing visions about future technology infrastructure. Finally, 1 in 5 businesses feel that their IT departments are holding them back from transforming despite having a vision in place.

Investment roadblocks

Top barriers to agreeing on investment strategy for technology infrastructure.

Perception vs. reality: The perfect (data) storm

Businesses are confident that their current technology infrastructure will deliver on key data priorities, including better customer experience (81%), sales and marketing analytics (75%), and business intelligence (73%).

Confidence levels riding high

Business leaders say their technology infrastructure will deliver the performance needed to achieve strategic priorities.

But there is a problem. When it asked respondents about their biggest sources of frustration when they use data within their organizations, the survey revealed a contradiction. Businesses might be confident about their technology infrastructure, but they have serious reservations about their existing data management capabilities.

Risky business: Will pride come before a fall?

This contradiction suggests businesses are overconfident about their data capabilities and are failing to extract worthwhile insights. It means business leaders must take another look at their data management processes to be satisfied they are robust enough.

“The problem is enterprise is not looking at the big picture about data first,” says WaveGuide’s Nelson K. Stacks. “They’re not asking, ‘How do we get there?’ They aren’t thinking up front about how they will pull data out or how they will analyze it.”

Celanese Corporation’s Senior Director, Randall Skattum, puts it this way: “Without a clear strategy of what it is that you want to accomplish with your data, it just becomes a whole bunch of ‘stuff.’ It’s like those files in the filing cabinet that no one ever looks at.”

Follow a strategy, not the herd

Closer analysis of Hesitant Investors reveals that this cognitive dissonance is even starker at the lower end of the investment spectrum. The survey shows that they are prioritizing IoT over big data and analytics: over the past 12 months, 59% have focused on IoT, while just 35% have focused on big data and analytics.

These statistics reveal a threat to the Hesitant Investors on 2 fronts. First, they can expect a vast increase in data supplied by the rollout of IoT, but risk being unable to analyze it because they are not investing sufficiently in big data and analytics.

Second, it looks like Hesitant Investors are playing catch-up, investing in “hot technology” as dictated by industry peer pressure, rather than focusing initially on the technology and infrastructure they need to drive forward their own particular transformation strategies.

Over the edge

Having a herd-like mentality can result in far-reaching consequences. Hesitant Investors will be unable to connect data from edge to edge because their infrastructures will have been designed to only address specific company pain points—with any technology deployed on an ad-hoc basis. Success depends instead on a holistic, company-wide infrastructure strategy.

For example, over the past 12 months, 24% of Committed Investors have prioritized IoT, while 27% have focused on big data and analytics, which suggests that when data starts flooding in, Committed Investors will have the balanced infrastructure they need to effectively manage and analyze those new datasets.

Investment priorities

Are businesses prepared for an influx of data?

The survey shows there is investment across all emerging technologies, but that levels could be too low to make a positive impact; this is especially true of open architecture (OA). Businesses should prioritize OA as the number-1 component of any future-facing infrastructure. Spending in this area, however, is barely higher than it is on artificial/ virtual reality (AR/VR). ANZ’s Michael McNamara explains why: “Instead of going with proprietary architectures, we’re embracing open standards by adopting platforms that can be effectively plugged together in a modular fashion. This allows you to change your architecture to keep pace in the current environment and to enable new and emerging technologies as they emerge.”

This OA-driven approach will allow ANZ to sequence its infrastructure’s implementation based on the company’s business priorities. As the survey reveals, that kind of flexibility will be crucial to business leaders. For instance, 8 in 10 organizations across the total sample are investing in technology infrastructure to keep pace with evolving customer expectations (particularly in EMEA and North America). OA is crucial for sharing data within ecosystems that will enable organizations to better understand their customers.

But the survey shows the significance of OA is remarkably under-appreciated within each vertical. Because of this blind spot, operations could suffer as infrastructure becomes inflexible and monolithic instead of agile and microservice-driven.

Cybersecurity: The good, the bad— and the ugly

Businesses are listening to technology specialists and their concerns about cybersecurity, and are investing substantially in security measures. They must be careful, however, not to let their concerns influence their transformation strategies. By allowing excessive caution to lead the way, they may see nimbler competitors take the lead.

Deeper analysis of the Committed Investors and Hesitant Investors reveals valuable insights for businesses that are struggling to move beyond the demands of implementing robust cybersecurity.

Unlike Hesitant Investors, whose focus on data compliance and improving cybersecurity trumps all other strategic priorities, Committed Investors are plotting a successful course by spreading out their investments in technologies in a more balanced way.

Though Committed Investors are likely to have deeper pockets and a cybersecurity strategy that has been embedded for longer, smaller businesses could still benefit from adopting this systematic way of thinking. In doing so, it would help ensure their technology investments—whatever the size—work to build a business that is both secure and well positioned to maximize growth opportunities.

Organizations struggling to adopt this kind of evenhanded approach should engage a reputable third-party security provider. Together, they can create a cost-efficient and centralized security strategy to support business operations instead of hindering them.

This approach also helps enable the business to focus on new technologies and innovation while the provider manages the ongoing cybersecurity strategy. If organizations choose not to reach out for support, their fears about being left behind by faster-moving competitors could become a reality.

Infrastructure: Right path, wrong approach

Business is at a turning point. There is clear evidence that most business leaders are investing in future-facing technology infrastructures, but the survey reveals that many risk mishandling the transition—or they are already.

What is the right way to handle infrastructure transformation?