Adopt an Exponential IT Mindset

Adopt an Exponential IT Mindset

Thrive through the next paradigm shift

Executive Summary

For more than 40 years, information technology has significantly transformed businesses, from the computerization of operations to the digital transformation of business models. As technological disruption accelerates exponentially, a world of exponential business opportunity is within reach.

Newly emerging technologies such as generative AI, quantum computing, 5G cellular networks, and next-generation robotics are enabling autonomous business capabilities.

The role of IT has evolved throughout the past couple generations to enable business transformations. In the autonomization era, it will have to evolve again. IT will have a new mission, an adapted governance structure, innovative capabilities, and an advanced partnership model.

CIOs embracing exponential IT require a new mindset. Their IT practices will need to progress to the top of the maturity ladder as they make business outcomes their own.

Over the past two generations, we have witnessed major technology-driven business transformations

1980s

Computerization

The use of computer devices, networks, and applications became widespread in the enterprise. The focus was on improving the efficiency of back-office tasks.

2000s

Digitalization

As the world became connected through the internet, new digitally enabled business models emerged in the enterprise. Orders were now being received online, and many products and services were partially or fully digitized for online fulfillment.

Recent pandemic measures contributed to a marked acceleration in the digitalization of organizations

The massive disruption resulting from pandemic measures led businesses to shift to more digital interactions with customers.

The global average share of customer interactions that are digital went from 36% to 58% in less than a year.*

Moreover, companies across business areas have accelerated the digitization of their offerings.

The global average share of partially or fully digitized products went from 35% to 55% in the same period.*

The adoption of digitalized business models has accelerated during the pandemic. Post-pandemic, it is unlikely for adoption to recede.

With more business applications ported to the cloud and more data available online, “digital-first” organizations started to envisage a next wave of automation.

*Source: “How COVID-19 has pushed companies over the technology tipping point—and transformed business forever,” McKinsey & Company, 2020

A majority of IT leaders plan to use artificial intelligence within their organizations in 2023

In August 2022, Info-Tech surveyed 506 IT leaders and asked which tasks would involve AI in their organizations in 2023.

We found that 63% of IT leaders plan to use AI within their organizations to automate repetitive, low-level tasks by the end of 2023.

With the release of the ChatGPT prototype in November 2022, setting a record for the fastest user growth (reaching 100 million active users just two months after launch), we foresee that AI adoption will accelerate significantly and its use will extend to more complex tasks.

Newly emerging technologies and business realities are ushering in the next business transformation

1980s

Computerization

2000s

Digitalization

2020s

Autonomization

As digitalization accelerates, a post-pandemic world with a largely online workforce and digitally transformed enterprise business models now enters an era where more business capabilities become autonomous, with humans at the center of a loop* that is gradually becoming larger.

Deep Learning, Quantum Computing, 5G Networks, Robotics

* Download Info-Tech’s CIO Trend Report 2019 – Become a Leader in the Loop

The role of IT needs to evolve as it did through the previous two generations

The autonomization era brings enormous opportunity for organizations, coupled with enormous risk

While some analysts have been quick to announce the demise of the IT department and the transition of the role of IT to the business, the budgets that CIOs control have continued to rise steadily over time.

In a high-risk, high-reward endeavor to make business processes autonomous, the role of IT will continue to be pivotal, because while everyone in the organization will rush to seize the value opportunity, the technology risk will be left for IT to manage.

Exponential IT represents a necessary change in a CIO’s focus to lead through the next paradigm shift

EXPONENTIAL RISK

Autonomous processes will integrate with human-led processes, creating risks to business continuity, information security, and quality of delivery. Supplier power will exacerbate business risks.

EXPONENTIAL REWARD

The efficiency gains and new value chains created through artificial intelligence, robotics, and additive manufacturing will be very significant. Most of this value will be realized through the augmentation of human labor.

EXPONENTIAL DEMAND

Autonomous solutions for productivity and back-office applications will eventually become commoditized and provided by a handful of large vendors. There will, however, be a proliferation of in-house algorithms and workflows to autonomize the middle and front office, offered by a busy landscape of industry-centric capability vendors.

EXPONENTIAL IT

Exponential IT involves IT leading the cognitive reengineering of the organization with evolved practices for:

• IT governance
• Asset management
• Vendor management
• Data management
• Business continuity management
• Information security management

To succeed, IT will have to adopt different priorities in its mission, governance, capabilities, and partnerships

Digitalization

A Connected World

Progressive IT

• Mission

  Enable the digital transformation of the business

• Governance

  Service metrics, security perimeters, business intelligence, compliance management

• Capabilities

  Service management, business analysis, application portfolio management, data management

• Partnerships

  Management of technology service agreements

Autonomization

An Exponential World

Exponential IT

• Mission

  Lead the business through autonomization.

• Governance

  Outcome-based metrics, zero trust, ESG reporting, digital trust

• Capabilities

  Experience management, business advisory, enterprise innovation, data differentiation

• Partnerships

  Management of business capability agreements

Fortune favors the bold: The CIO now has an opportunity to cement their role as business leader

Research has shown that companies that are more digitally mature have higher growth than the industry average. In these companies, the CIO is part of the executive management team.

And while the role of the CIO is generally tied to their mandate within the organization, we have seen their role progress from doer to leader as IT climbs the maturity ladder.

As companies strive to succeed in the next phase of technology-driven transformation, CIOs have an opportunity to demonstrate their business leadership. To do so, they will have to provide exceptionally mature services while owning business targets.