This Editor had the opportunity to attend Directions 2016, the annual conference of top-tier industry analyst firm IDC. The overall theme of this conference, which primarily caters to information technology applications, services and integration providers, was: Digital Transformation At-Scale, and the keynote sessions delivered some important messages regarding that theme.

Overall, IDC stressed that the growth of what the analyst firm terms as Third Platform technologies, namely Cloud, Mobile, Big Data, and Analytics Driven Decision-Making, if trending far higher than previously predicted. In fact, the revised prediction delivered to the audience was that by 2018, 100 percent of leading-edge technologies and services will be deployed on some form of these Third Platform technologies. IDC’s original projection cited the year 2020 for this milestone.

Further, according to IDC, the two technologies that are fueling the accelerated uptake are applications and services supported by Internet of Things (IoT) technologies, and by Cognitive and Artificial Intelligence deep learning technologies were lots of data are analyzed for more predictive or prescriptive decision-making needs. Regarding the latter Cognitive/AI dimension, IDC predicted upwards of 50X growth by 2018.

Another key message reinforced was that larger portions of IT investment budgets remain in the control of Line-of-Business (LOB) executives and supporting teams. Bob Parker, IDC Group Vice President flatly stated that Digital Transformation is a business strategy, not a technical adoption strategy. IDC views Digital Transformation increasingly as a Board level initiative that flows down to LOB units for timeline implementation. IT is now viewed as a LOB partner in Digital Transformation, performing the roles of facilitator of innovation and technology adoption as well as that of project management.

Three areas of mastery were described by Parker:

  • Mastery of Relationships which include Reach-Relevancy- Reciprocity conversations involving customer needs, relationships and support.
  • Mastery of Operations that include Scale-Scope-Speed of customer fulfillment and service needs
  • Mastery of Information that include the Syntax-Semantics-Socialization of information

IDC Senior Vice President Vernon Taylor referred IoT as the game changer for Digital Transformation, citing that IoT will be the accelerant that will fuel all other Third Platform technologies including Cognitive and AI technology needs. In terms of market, IDC now predicts that the total available IoT market segment will surpass $1.46 trillion by 2020. To no surprise, IDC views Manufacturing industry as a large opportunity segment with Discrete Manufacturing IoT applications growing at an 11 percent compounded annual growth rate (CAGR) through 2020, and Process Manufacturing at a predicted 9 percent CAGR. According to IDC, Retail Industry IoT applications are currently leading the way on adoption curves.

Regarding IoT initiatives, IDC believes that the proof-of-concept stage has passed. Instead, IDC now provides definitions of efforts in successive process maturity categories of Experimenter, Explorer, Connector, Strategist, and Disruptor.

A final observation we wanted to share with Supply Chain Matters readers are definitions of systems maturity and purpose. Recall that several years ago, analyst firm Gartner articulated three layers of systems innovation:

Systems of Record (presumed to be legacy ERP systems)

Systems of Innovation (presumed to be best-of-breed or cloud-based point solutions)

Systems of Engagement (presumed to be extensions social based systems in the concepts of Facebook, Linked-In, Twitter and others)

At this year’s Directions, IDC is now advising IT providers to focus on “Systems of Intelligence”, system that provide the organization faster, more-informed. And more context referenced decision-making capability that brings together physical sensor, structured transactional, unstructured social and all other forms of data and information that creates higher levels of analytics-based decision-making. As an example, IDC views a System of Intelligence as a system that integrates smart things that increase the value of the business decision. Regarding Essential Guidance related to IoT, IDC recommends building IoT applications that embrace Systems of Intelligence and actively plan for both vertically as well as horizontally driven approaches.

This Editor tends to like this evolving IDC connotation regarding a focus on intelligence and more predictive decision-making.  It adds a far more meaningful context to directional setting and required capability, one that we have been articulating in our market education commentaries.

Bob Ferrari