2018 Digital Trends in IT Digital Intelligence BriefingDigital Intelligence Briefing: 2018 Digital Trends in IT 2 Digital Intelligence Briefing: 2018 Digital Trends in IT 1. Foreword by Adobe. 2. Executive summary . 3. The need for scalable, enterprise digital experience platforms . 4. The internal focus: digital transformation and workflows . 5. Managing the existential threat and embracing the opportunities . 6. Actionable tips to help future-proof your IT function . 7. Appendix: respondent profiles . 3 461115 21 23Digital Intelligence Briefing: 2018 Digital Trends in IT 3 This is the second year running that we have produced an IT-focused edition of the Digital Trends report in partnership with Econsultancy, focusing on the challenges and opportunities that are shaping the role of the modern-day CIO and CTO. The IT department continues to be at the forefront of initiatives by companies to put customers at the heart of their operations, with the need for an integrated experience increasingly being seen as an essential commercial requirement. A new version of this report gives us a great opportunity to look at how the priorities and headaches for IT executives have changed in emphasis over the past year. The challenge of integrating legacy systems with new technology is now seen as the most significant obstacle to driving digital transformation. But while this is an ongoing challenge, it is also clear that companies remain committed to creating digital platforms that can scale and meet increasingly complex requirements. It is encouraging to see that an extensible digital platform is now the number-one priority for enterprise companies. Our research shows that companies are right to focus on their technology infrastructure. An important takeaway from the main 2018 Digital Trends report is that, in the context of marketing and customer experience solutions, the best-performing companies are significantly more likely than their less successful peers to have invested in an integrated, cloud-based technology stack. Over the last few years we have observed that many companies have ended up with fragmented point solutions to manage areas such as web content management, digital communications and analytics, resulting in a decreased ability to provide the best possible experience based on a single view of the customer. Here at Adobe we are passionate in our belief that commercial success is inextricably linked with being able to connect with your customers in a consistent way across every device. If you can create seamless and amazing experiences, youll build lasting customer loyalty. We hope this report provides you with some insightful data points and analysis which will be useful to you individually and to your organisation, whether small or large. Foreword by Adobe Cynthia Stoddard SVP & CIO AdobeDigital Intelligence Briefing: 2018 Digital Trends in IT 4 Executive summary IT executives preoccupied by need to keep up with customer expectations The high proportion (39%) of IT respondents that cite keeping up with changing customer expectations and behaviour as one of their top external challenges demonstrates the increased customer centricity of a new breed of CIO. IT executives at larger organisations those with more than £150m in annual sales are particularly conscious of the challenges that come with doing business in the age of the customer, citing this as their biggest external challenge. They are significantly more likely than their peers at smaller organisations to be kept awake at night thinking about meeting customer expectations (48% versus 40%). Security is still the biggest headache for IT professionals As was the case last year, security is the main preoccupation for IT executives in terms of external threats, with respondents most likely to cite the threat of security breaches and cyber-risk threats as a challenge (42% compared to 41% in 2017). Security of business and customer data (44%) is also the top priority for the year ahead, ahead of the implementation of extensible digital platforms (43%) and improving digital workflows (38%). Legacy systems are the greatest obstacle to digital transformation The most significant in-company barrier to driving digital transformation is the integration of legacy systems with new technology, cited as a top-three challenge by 45% of respondents, up from 41% last year. Respondents at larger companies are very much preoccupied by three key internal challenges, namely departmental silos / bureaucratic processes (60%), difficulties integrating legacy systems with new tools/ technologies (55%) and lack of shared vision as to what digital transformation means (52%). For smaller companies, the pain appears to be more evenly spread across the full spectrum of headaches that can hinder digital transformation. Enterprise CIOs identify requirement for extensible digital platforms Extensible digital platforms are the top priority for IT executives at larger organisations, with well over half (57%) ranking this as a top-three priority for 2018. This compares to 42% for security of data, and the same percentage for joining up data to achieve a single view of the customer. An integrated and scalable technology platform for marketing and customer experience incorporating digital communications and state-of-the-art content management is becoming a hygiene factor for businesses that want to compete in a world where the customers expectation for personalised and relevant communications across different touchpoints and channels is greater than ever. The 2018 Digital Trends in IT report is based on a sample of almost 400 senior IT leaders (manager level or above 1 ) who were among around 13,000 digital professionals taking part in the annual Digital Trends survey carried out at the end of 2017 and start of 2018. The research, conducted by Econsultancy in partnership with Adobe, explores the digitally- driven opportunities and challenges facing organisations from the perspective of IT professionals, looking at both internal business factors and external technological and consumer trends. 1. The 371 IT respondents who took part in the 2018 Digital Trends survey were among a total of nearly 13,000 marketing, creative and technology professionals in the digital industry from all sectors who participated, from countries across EMEA, North America and Asia Pacific.Digital Intelligence Briefing: 2018 Digital Trends in IT 5 Companies struggle to master workflow capabilities Fewer organisations than last year are taking a range of initiatives to improve workflows against the backdrop of tighter security and compliance requirements that companies are typically working towards. Just under half (48%) of respondents say they are switching to paperless, digital end-to-end workflows, compared to exactly half last year. The proportion of companies moving an increasing portion of the technology stack to integrated cloud solutions has jumped from 36% to 40%. While process and technology play a pivotal role in supporting digital transformation initiatives, there are other capabilities that need to be working in harmony in order to effect significant and positive digital change. In respect of data, there has been a marginal increase in the proportion of IT professionals that believe they have access to and control of user data . However, in all other areas including culture, skills and strategy there has been a decline in the proportion of companies that believe they have the required capabilities. IT executives focus on real-time personalised experiences, AI and the Internet of Things as exciting opportunities IT professionals are most likely to see the delivery of personalised experiences in real time as the most exciting prospect in three years time, ahead of other technological innovations such as the Internet of Things, artificial intelligence, virtual or augmented reality, voice interfaces and payment technologies. IT executives at larger companies are more focused on AI than their counterparts at smaller organisations. They are almost twice as likely as peers at smaller organisations to cite utilising artificial intelligence / bots to drive campaigns and experience as an exciting prospect (27% versus 14%). IT executives are almost twice as likely as decision- makers working outside IT to see IoT as the most exciting prospect (20%, compared to 11% of non-IT respondents).FIGURE 1: WHICH THREE PRIORITIES ARE KEY TO THE SUCCESS OF YOUR ORGANISATION IN 2018? 6% 20% 20% 25% 27% 32% 38% 43% 44% None of the above Digital training programmes for employees Utilising articial intelligence / bots to improve customer experience or workows Ensuring the right skills are in place e.g. digital analytics talent Joining up data to achieve a single view of the customer Facilitating mobile working by optimising the mobile experience Improving digital workows e.g. via cloud-based tools Implementing an extensible digital platform for experience delivery Security of business and customer data Respondents: 264 Methodology note: Trending information comparing 2018 and 2017 data is not provided because this years list of priorities has been significantly updated. Digital Intelligence Briefing: 2018 Digital Trends in IT 6 Figure 1 provides a snapshot of organisational priorities for the year ahead through the lens of information technology professionals. It is no surprise to see that security of business and customer data (44%) is the top priority for the year ahead, given the ongoing importance of guarding against the kind of malicious activities that continue to inflict severe commercial damage on organisations across a range of sectors. On the same theme, as we shall see later in the report (Section 5), the threat of security breaches and cyber-risk threats is cited as the challenge most likely to be keeping IT professionals awake at night. Throughout 2018 and beyond, security will continue to be top-of-mind for Chief Information Officers (CIOs) and Chief Technology Officers (CTOs), as they strive to ensure that information assets and technology are adequately protected from malevolent forces. For many companies, responsibility for protection will fall to a dedicated Chief Information Security Officer, or CISO, an acronym that has dryly been referred to by some as Career is Seriously Over for those who see this role as a poisoned chalice 2 . As seen in Figure 1, the second and third highest priorities are implementing an extensible digital platform for experience delivery (43%) and improving digital workflows e.g. via cloud-based tools (38%). The subject of workflows will be covered in more detail in the next section of the report. 3. The need for scalable, enterprise digital experience platforms 2. forbes/sites/forbestechcouncil/2018/01/09/the-evolving-role-of-the-cio-in-2018 Security of business and customer data is the top priority for information technology professionals in 2018.FIGURE 2: WHICH THREE PRIORITIES ARE KEY TO THE SUCCESS OF YOUR ORGANISATION IN 2018? (BY COMPANY SIZE) 5% 28% 18% 25% 34% 43% 24% 46% 37% 3% 10% 25% 28% 30% 40% 42% 42% 57% None of the above Digital training programmes for employees Utilising articial intelligence / bots to improve customer experience or workows Ensuring the right skills are in place e.g. digital analytics talent Facilitating mobile working by optimising the mobile experience Improving digital workows e.g. via cloud-based tools Joining up data to achieve a single view of the customer Security of business and customer data Implementing an extensible digital platform for experience delivery Organisations with annual revenues of more than £150m Organisations with annual revenues of up to £150m Respondents: 264 Digital Intelligence Briefing: 2018 Digital Trends in IT 7 EXTENSIBLE DIGITAL PLATFORMS For evidence that digital technology is no longer the preserve of the marketing department but rather a fundamental infrastructure that impacts the whole organisation, look no further than Figure 2. Extensible digital platforms are the top priority for organisations with annual revenues in excess of £150m, with well over half (57%) ranking this as a top-three priority for 2018 compared to 42% for security of data, and the same percentage for joining up data to achieve a single view of the customer. An integrated and scalable technology platform for marketing and customer experience incorporating digital communications and state-of-the- art content management is becoming a hygiene factor for businesses that want to compete in a world where the customers expectation for personalised and relevant communications across different touchpoints and channels is greater than ever. According to Gartner, a digital marketing hub 3“provides marketers and applications with standardised access to audience profile data, content, workflow elements, messaging and common analytic functions for orchestrating and optimising multichannel campaigns, conversations, experiences and data collection across online and offline channels, both manually and programmatically. It typically includes a bundle of native marketing applications and capabilities, but it is extensible through published services with which certified partners can integrate. ” 3. gartner/doc/3606024/magic-quadrant-digital-marketing-hubsFIGURE 3: WHAT BEST DESCRIBES YOUR ORGANISATIONS APPROACH TO MARKETING AND CUSTOMER EXPERIENCE TECHNOLOGY? (TOP-PERFORMING COMPANIES VS. THE MAINSTREAM) 25% 34% 26% 15% 9% 27% 46% 18% We have a highly integrated, cloud-based technology stack We have a somewhat integrated, cloud-based technology stack We have a fragmented approach with inconsistent integration between technologies We have little or no cloud- based technology Top-performing companies Mainstream Respondents: 3,181 Methodology note: This chart is based on data from all client-side respondents who took part in the 2018 Digital Trends survey, and not just IT professionals. Top-performing companies are those that exceeded their top 2017 business goal by a significant margin, and who also significantly outperformed their competitors. Digital Intelligence Briefing: 2018 Digital Trends in IT 8 While marketing technology catering for the specific needs and workflows of marketers