Raising the game · Raising the game: The IBM Business Tech Trends Study. Game on . Our 2012 study, Fast track to the future, underscored the momentum building around these then-emerging

Raising the gameThe IBM Business Tech Trends Study

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Raising the game: The IBM Business Tech Trends Study

The future has arrived. Big data and analytics, cloud, mobile, and social are now mainstream, driving strategic opportunities for the enterprise. How are leading companies staying out ahead when everybody is jumping into the fray? It turns out Pacesetters have three key characteristics that give them an edge: partnering is in their DNA, analytics is their fuel, and combining these four technologies is their breakaway move.

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About the study

This is the fourth study in the Tech Trends series. To gain a current global snapshot of how organizations are using big data and analytics, cloud, mobile, and social technologies, the IBM Center for Applied Insights conducted a survey of 1,447 decision makers. Twenty-one percent of respondents are C-level executives. Of the remainder, 40 percent represent IT management and 39 percent business management, comprising vice presidents, directors, and managers. These participants span 15 industries and 13 countries.5 Fifty-two percent work in organizations of 1,000 or more employees and 48 percent are from companies with fewer employees.

Last year, mobile data traffic was almost 18 times the amount of traffic across the whole Internet a little over a decade ago.1 Use of social networking sites has risen 800 percent among online American adults since 2005, reaching 73 percent in 2013.2 During the past two years, the world generated a zettabyte of data, more information than we humans created in all of history.3 And in 2013, worldwide spending on public cloud IT services was estimated at $47 billion.4

The future everyone’s been expecting has now arrived. Big data and analytics, cloud computing, mobile technology, and social business are all in mainstream use – at enterprises of virtually every size.

So what happens to the companies that were previously gaining competitive advantages from the early adoption of these technologies? How do they keep their edge? Or do they?

In our 2012 study, we called these enterprises Pacesetters. They were on the fast track. And despite the crowded playing field evident in this year’s study, this segment is still outperforming.

Like elite athletes, they didn’t get distracted when other companies entered the field. They relied on good genes, with a clear predisposition to partner. They trained themselves to depend on the right fuel – analytical insights that are integral to their decisions. And they learned how to combine these four technologies, allowing them to craft innovative moves that put more distance between them and their competitors.

Tweet this Pacesetters are raising the game: they’ve got the right DNA, right fuel, right breakaway move.

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Raising the game: The IBM Business Tech Trends Study

Game on

Our 2012 study, Fast track to the future, underscored the momentum building around these then-emerging trends. At the time, only about half of the respondents had adopted analytics and mobile. Social and cloud, meantime, were deployed by even fewer (34 percent and 39 percent respectively). Fast-forward two years and most piloting stages are long gone. Adoption is the norm. Each of these four technologies has now been deployed by at least 70 percent of enterprises. Significant deployments of cloud and social have almost tripled in just two years.

Now firmly established, big data and analytics, cloud, mobile and social are more crucial than ever to how business gets done. Nearly three-fourths of decision makers report that these technologies are strategically important to their organizations, up from two-thirds in 2012. They’re helping organizations stand out within fiercely competitive industries, gin up novel products and services, craft new business models, and pinpoint which markets to attack.

Just as telling, this juggernaut shows no sign of slowing. Three-fourths of enterprises plan to ratchet up their investments in big data and analytics, cloud, and mobile, while 66 percent intend to spend more on social business. While reaping the benefits of their past investments, companies plan to keep forging ahead full steam.

Tech adoption: A crowded playing field

Cloud

Big Data & Analytics

Mobile

Social

No plans to adopt

Adopting within 24 months

Pilot stage Limited deployment

Significant deployment

3%7%

35%40%

4% 6%

14%16%

26%

35%40%

19%

5%

17%

8%

20%

36%42%

14%

15%6% 9%

11%

23%26%

19%

38%32%

21%

25%

23%

2014

2012

15%

3%

15%

23%

10%19% 17%

31%

32%

39%

Deployment gains since 2012

92%

59%

106%

Tweet this Big data and analytics, cloud, mobile and social are each now used by 7 in 10 enterprises.

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Tech adoption: A crowded playing field

Cloud

Big Data & Analytics

Mobile

Social

No plans to adopt

Adopting within 24 months

Pilot stage Limited deployment

Significant deployment

3%7%

35%40%

4% 6%

14%16%

26%

35%40%

19%

5%

17%

8%

20%

36%42%

14%

15%6% 9%

11%

23%26%

19%

38%32%

21%

25%

23%

2014

2012

15%

3%

15%

23%

10%19% 17%

31%

32%

39%

Deployment gains since 2012

92%

59%

106%

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Raising the game: The IBM Business Tech Trends Study

Pacesetters score big

To understand the approaches organizations are taking to these technologies, we revisited the segments we identified two years ago:6

Pacesetters believe that these technologies are critical to their business success and adopt them ahead of rivals.

Followers agree that these technologies are strategically important but generally trail Pacesetters in adoption.

Dabblers are behind, or at best, on par with competitors in terms of adoption, and their use of these technologies tends to be less strategic.

Strikingly, it appears that Pacesetters are maintaining their edge, even as the four pivotal technologies have gone mainstream. About nine in ten of the Pacesetters say they are gaining competitive advantage from big data and analytics, cloud, mobile and social. That compares to just four in ten Dabblers and seven in ten Followers. Just as crucially, Pacesetters report they are better at achieving key business objectives with these technologies than the rest of the field.

These differences show up across a range of business objectives. Sixty-three percent of Pacesetters say they are achieving their objective of accelerating product and service innovation through mobile, nearly six times more than Dabblers. Pacesetters are also turning to the cloud to improve customer service, with almost 70 percent reporting that they’ve met that objective. And Pacesetters report success in using social business, analytical insights, and the cloud to improve communication and collaboration with customers, employees and partners five to seven times more often than Dabblers.

Their secret playbookOn an increasingly competitive playing field, what sets Pacesetters apart? Compared to Dabblers and Followers, Pacesetters are more likely to exhibit three characteristics that help them get more out of these transformative technologies. They’re partnering broadly and creatively, driving business decisions with analytics, and combining the four technologies.

2012 20% 55% 25%

Pacesetter ranks have grown by seven points

Pacesetters Followers

2014 27% 54% 19%

Dabblers

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Pacesetters’ scoreboardPacesetters are more likely than Dabblers to achieve their objectives with these technologies

Big

Da

ta &

An

aly

tics

Clo

udM

obile

Soci

al

Enhance communication& collaboration

65% vs. 9%

Accelerate innovationof products & services

57% vs. 10%

Improve customerexperience

63% vs. 11%

Increase workforceefficiency

61% vs. 6%

Enhance communication& collaboration

65% vs. 13%

Improve customerexperience

68% vs. 18%

Accelerate innovationof products & services

63% vs. 11%

Improve customerexperience

59% vs. 12%

Sharpen insights &decision making

58% vs. 18%

Enhance communication& collaboration

72% vs. 13%

Improve customerexperience

54% vs. 9%

Expand into new segments & markets

64% vs. 21%

Achieving goals: Pacesetters vs. Dabblers

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Raising the game: The IBM Business Tech Trends Study

Partnering innovatively

The City of Honolulu wanted to improve government transparency and efficiency while also increasing civic involvement. Through cloud, the city opened up access to years’ worth of municipal data and provided a development platform that allows citizens and partners to create and deploy new applications to improve the city’s quality of life. Creations include a bus schedule app with real-time arrival data and an app that lets citizens report locations and share photos of broken street lights, aban-doned vehicles and other problems. This crowdsourced approach helps the city not only better engage its citizens but also improve the efficiency of its own operations.8

Partnering is in their DNA

Partnering is integral to how Pacesetters plan and execute. Across every type of external partner and for every type of activity we examined, Pacesetters partner more. They also partner more creatively, recruiting less-traditional partners for their efforts.

Take skills acquisition. While 40 percent of companies still have moderate to major skills gaps, Pacesetters are busy plugging their skills gaps by partnering with external developers. However, they’re not just using tried-and-true professional developers – nearly 80 percent of Pacesetters are also turning to citizen developers.7 Compared to Dabblers, Pacesetters are twice as likely to enlist citizen developers for skills transfer and training. This fits right in with the Pacesetters’ experimental nature: Nearly 60 percent of Pacesetters proactively develop skills, experimenting even before a clear business need emerges (only 8 percent of Dabblers can say the same).

However, Pacesetters’ partnering isn’t just about skills; it’s much deeper and more pervasive. They’re engaging less-conventional partners like citizen developers, clients, start-ups and academia to help drive innovation. They’re twice as likely to enlist academia to help with product development, and 70 percent more likely to use start-ups for project execution. And they’re remarkably inclusive when it comes to steering their IT direction – Pacesetters are about 2.5 times more likely than Dabblers to turn to academia, clients, start-ups and even citizen developers for help with IT decisions.

Eighty percent of Pacesetters use citizen developers. Who codes for you?

This creative partnering strategy seems to be working. According to the results Pacesetters are reporting, they’re more than five times as likely to significantly accelerate innovation of products and services with cloud, analytics, mobile technology and social business.

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Watch to learn more http://www.youtube.com/watch?v=8I9_zWKs_yA

Skills transfer/ training

Project execution

Productdevelopment

IT directions/decisions

Professional developers

Citizen developers Academia Start-ups Clients

Pace

sett

ers

Skills transfer/ training

Project execution

Productdevelopment

IT directions/decisions

Da

bb

lers

5 10 15 20 25 30 35 40 45

Percent using a given partner for an activity

2.6x as likely to engage Start-ups for steering IT direction

2.0x as likely to engage Citizen Developers for training

Pacesetters partner more ...

...and more creatively

Partnering is in their DNA

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Raising the game: The IBM Business Tech Trends Study

Analytics is their fuel

Pacesetters are turning into insight-driven enterprises.

They started by laying a strong analytical foundation. They built up mature big data and analytics capabilities and cultivated analytical skills throughout their organizations.

But it’s not enough to just stock up on analytical talent. After all, insights that sit on the shelf are useless. The hallmark of an analytically fueled organization is having a culture that’s inclined to act on analytical results and insights. And nearly 70 percent of Pacesetters say analytics are integral to how their organizations make decisions.

At the same time, Pacesetters are serious about building even greater analytical sophistication so they can remain on the cutting edge. During the next two years, 60 percent – versus 29 percent of Dabblers – plan to increase investments in analytics by 10 percent or more. And they aren’t just focused on data generated by their existing transactional systems. They’re expanding their use of analytics in the newer spaces of social and mobile.

There’s one area where even Pacesetters have room for improvement. Only one-third of Pacesetters (and a mere 5 percent of Dabblers) have crafted a comprehensive, enterprise-wide analytics strategy. As competition continues to heat up and analytics impacts business strategy even more, a mature strategy can be essential for staying ahead.

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Analytics for early detection, better prevention

Though heart failure afflicts more than five million U.S. adults and costs US$32 billion annually, early detection and prevention is difficult. Virginia health system Carilion Clinic is applying natural language processing technology to analyze “unstructured” data in electronic medical records, such as doctors’ notes and discharge papers. This data can provide a more complete understanding of patients but often goes unanalyzed. Carilion is also using predictive modeling to identify at-risk patients. Carilion reported that with the help of this sophisticated analytical approach, the pilot project identified 8,500 patients at risk of developing heart failure, with an 85 percent accuracy rate. Through analytics, Carilion is laying the groundwork for targeted interventions that can help prevent more severe and costly medical complications.9

Nearly two-thirds of Pacesetters are increasing big data & analytics investment by double digits.

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7 in 10 say data-driven insights are integral to their organization's decision-making process

60% plan to increase investment in Big Data & Analytics 10% or more over the next 2 years

80% or more plan to increase use of social media and mobile analytics over the next 2 years

89% have mature Big Data & Analytics capabilities

74% have most of the Big Data & Analytics skills needed

Today

Tomorrow

Pacesetters run on insights

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Raising the game: The IBM Business Tech Trends Study

Integration is their breakaway move

Each of these technologies on its own is powerful. But Pacesetters are aiming to deliver an even bigger punch by combining them.

For example, social media has reset our expectations as consumers, employees, and business partners, and companies have ratcheted up investments in response. Pacesetters, though, are already onto the next level. They’re weaving together mobile and social to further expand the reach of their networks and strengthen connections. Pacesetters are dishing up social tools on mobile five times more than Dabblers.

But bolstering engagement via social tools and mobile technology is just one piece of the puzzle. Pacesetters are intent on building strategic advantages from the data coming their way. They’re six times more likely to use analytics to drive functionality on mobile applications or provide workers with insights when and where decisions are made. And they’re equally ahead on using analytics to mine social data, for example, to better understand markets and customer needs.

Among Pacesetters, cloud computing often underpins the deployment of other technologies. It can play a critical role in how they manage today’s deluge of data and scale their technology operations and initiatives. Compared to Dabblers, Pacesetters are four to seven times more likely to use cloud to help deliver the other three technologies. Cloud technologies can help them deploy mobile and social offerings more quickly and broadly, better manage the data they’re generating, and gather information from a wider array of sources. Cloud also lets them tap into high-performance computing capacity for more sophisticated analytics.

Combining technologies for smarter energy operations

Bharat Light and Power (BLP) is one of India’s largest clean energy companies. To generate more green power and improve efficiency, BLP is combining cloud, analytics and mobile technologies. BLP built a cloud infrastructure to help better manage its wind farms and make use of the immense amount of data produced by its power generation sources. The company applies analytics to help generate insights from this data, such as pinpointing equipment or utilization issues. BLP expects proactive servicing to boost turbine availability by 3 to 4 percent and cut infrastructure provisioning more than 90 percent. The company plans to engage citizens via mobile and social — informing them about their power usage and better understanding their energy demand. 10

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Pacesetters are four to seven times more likely to integrate these technologies.

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Inside the integration playbook

6x more likely to use social media analytics

6x more likely to use mobile analytics

Cloud at the core

57% of Pacesetters use Big Data & Analytics on the Cloud

53% of Pacesetters use Social Business on the Cloud

55% of Pacesetters use Mobile on the Cloud

6x

4x

7x

5x more likely to deliver social business via mobile

Pacesetters vs. Dabblers

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Raising the game: The IBM Business Tech Trends Study

Staying on the leading edge demands more than adoption–it requires a strategic, collaborative approach

Broaden your idea of partnering–who you

engage and when

Act on insight, not instinct

Combine technologies to amplify results

• Plug skill gaps creatively. Have you considered using academics, start-ups or clients to train your staff? Are you using crowdsourcing or engaging citizen developers for expertise and speed?

• Treat innovation as a team sport. What about bringing in clients or academia to help with product development? Have you consulted clients or start-ups when making strategic IT decisions?

• Collaborate better. Are you using social business tools to engage partners? Cloud to scale your collaborations? Analytics to better understand your ecosystem?

• Get equipped for advanced analytics. Are you taking the plunge into new data sources like unstructured data (e.g., social media)? Building more sophisticated capabilities (e.g., predictive and prescriptive analytics)?

• Train your team. Does your organization have the right mix of technical and business skills to use your analytical toolset and interpret results?

• Act on insight. Has your organizational culture embraced use of evidence-based insights – rather than gut instinct – for decision making?

• Engage easily. Are you making social business capabilities available via mobile (to employees, partners, clients)?

• Make your mobile apps smarter. How can you blend the intelligence of big data and analytics with the convenience of mobile to create innovation for your customers and employees?

• Combine strategically. How can cloud speed and scale your other technology initiatives? Can integrating technologies help you create new products or even new business models?

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About the authorsSandy Carter is IBM General Manager Ecosystem Development, responsible for IBM’s worldwide focus on building key ecosystems around core growth areas such as Cloud, Mobile, Social, Analytics, and Cognitive Computing. Author of three books, including best-seller Get Bold, she has been named “Top 10 in Social Media” in the Forbes Global Top 40 in Marketing, “Ten Most Powerful Women in Tech,” and one of M2M’s (Internet of Things) most powerful women in technology. Sandy can be reached at [email protected], via Twitter @sandy_carter, or through her blog socialbusinesssandy.com.

Susanne Hupfer, Ph.D. is a consultant with the IBM Center for Applied Insights, where she conducts fact-based research for innovation leaders. Her recent work includes the IBM Under cloud cover and Champions of Software as a Service (SaaS) studies. Previously, she worked in IBM Research, helping to direct the IBM Center for Social Business. Prior to joining IBM, she co-founded a technology start-up that developed software to help users seamlessly manage their electronic information in the cloud. She holds nine patents and a doctorate in computer science from Yale University. You can contact Susanne at [email protected] or on Twitter @cybersooz. Also check out her posts on the Center’s blog.

ContributorsMeeyoung Yoon Bill Day Angie Casey Caroline Day Laura Fonda Balaji Sreedhar Julie Yamamoto

About the IBM Center for Applied Insights

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Notes and sources1 “Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2013–2018.” Cisco. February 5, 2014. http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/white_paper_c11-520862.html

2 “Social Media Update 2013.” Pew Research Internet Project. December 30, 2013. http://www.pewinternet.org/2013/12/30/social-media-update-2013/; Olenski, Steve. “Social Media Usage Up 800% For U.S. Online Adults In Just 8 Years.” Forbes CMO Network blog. September 6, 2013. http://www.forbes.com/sites/steveolenski/2013/09/06/social-media-usage-up-800-for-us-online-adults-in-just-8-years/

3 Shaw, Jonathan. “Why ‘Big Data’ Is a Big Deal.” Harvard Magazine. March-April 2014. http://harvardmagazine.com/2014/03/why-big-data-is-a-big-deal

4 “IDC Forecasts Worldwide Public IT Cloud Services Spending to Reach Nearly $108 Billion by 2017 as Focus Shifts from Savings to Innovation.” IDC. September 3, 2013. http://www.idc.com/getdoc.jsp?containerId=prUS24298013

5 The growth markets studied include the BRIC countries (Brazil, Russia, India, China), Mexico, and South Africa. Mature market countries studied include Germany, France, Italy, Japan, Spain, United Kingdom, and United States. To smooth any geographic distortion, responses were weighted based on 2012 GDP data from The World Bank: data.worldbank.org/indicator/NY.GDP.MKTP.CD

6 As in 2012, we segmented respondents into three types of organizations based on how they rated the technologies’ strategic importance to their businesses and their pace of adoption relative to competitors.

7 By citizen developer, we mean an end user or hobbyist programmer who creates new business applications as a side venture outside of their normal work responsibilities.

8 “The City and County of Honolulu creates a customized cloud.” IBM. September 2012. http://www-01.ibm.com/common/ssi/cgi-bin/ssialias?infotype=PM&subtype=AB&htmlfid=ZSC03142USEN

9 “IBM Predictive Analytics to Detect Patients at Risk for Heart Failure.” IBM. February 19, 2014. http://www-03.ibm.com/press/us/en/pressrelease/43231.wss

10 “Bharat Light and Power and IBM Collaborate to Drive Business Growth and Build Smarter Operations.” IBM. November 19, 2013. http://www-03.ibm.com/press/us/en/pressrelease/42524.wss