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1. Digital transformation insights from over 2,200 IT leaders and CIOs research Stateof IT 2016 2. 2State of IT 751 250 752 502 Salesforce Research surveyed more than…
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  • 1. Digital transformation insights from over 2,200 IT leaders and CIOs research Stateof IT 2016
  • 2. 2State of IT 751 250 752 502 Salesforce Research surveyed more than 2,200 global IT leaders and CIOs to discover: • The evolving role of IT in business today • How high-performing IT organizations are mastering digital transformation • Areas where IT teams are investing to lead innovation in 2016 and beyond1 Throughout the report, data is examined relative to performance to identify patterns for overall success. We define high-performing teams as those whose IT leaders rate their company’s business performance as excellent or above average and rate their company as excellent compared to its competitors. The terminology “app” or “application” is used to define a digital (Internet-enabled) product, service, or solution created by or for an enterprise.2 We also define “tech practice” as the organizational unit(s) within the company that are responsible for delivering, supporting, and identifying business solutions using technology/IT. About This Report 1 Conducted at the end of 2015, this survey generated responses from 2,255 global CIOs and IT leaders from the U.S., Canada, Brazil, Australia, Japan, France, the U.K., and Germany. This report is limited to companies who reported developing some or all enterprise applications in-house. It does not include respondents who outsource all development to service providers or partners. Due to rounding, not all percentage totals in this report equal 100%. All comparison calculations are made from total numbers (not rounded numbers). 2 An app may be accessed via a desktop or mobile interface, and is either internally facing (to employees or partners) or externally facing (to consumers).
  • 3. 3State of IT Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Strategy Under Siege: Digital Shakes Up Traditional IT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 The Skills Gap Widens: IT Leaders Bank on Training and Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Technology Shifts: The Cloud and Emerging Tech Lead the Way . . . . . . . . . . . . . . . . . . . . . . . . . 15 Last Look: Innovation without Boundaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Table of Contents Salesforce Research provides data-driven insights to help businesses transform how they drive customer success. Browse all reports at salesforce.com/research.
  • 4. 4State of IT 4 IT has come a long way since the days of operating solely as a support arm for the business. Today’s IT teams are leaping to the forefront of company strategy by leading innovation to stay ahead of the digital era and evolving customer expectations. With new expectations comes a fundamental change in the way leadership views, structures, and runs IT organizations. In this report, we examine these shifts across three key areas —business strategy, people, and technology. Strategy Under Siege: Digital Shakes Up Traditional IT (see page 8) IT leaders are reshaping how they operate. Successful IT teams must now be proactive, aligned with customer needs, and on top of digital trends like mobile. This shift is most visible in the rise of the chief digital officer, a position that has emerged to address the need for a digitally driven, innovative, and customer-focused leadership role in IT. Sixty percent of companies currently employ a chief digital officer. 01 The Skills Gap Widens: IT Leaders Bank on Training and Tools (see page 11) As customer and employee expectations change, so do the necessary skills and talents needed to exceed them. There is a widening skills gap between demand and talent, compounded by changing budget needs. Four out of the top 10 pain points that IT leaders face are related to the skills gap. Successful companies are using training and better tools to bridge the divide. 02 Technology Shifts: The Cloud and Emerging Tech Lead the Way (see page 15) Training and tools are a part of the approach to closing the skills gap — the other part is the technology itself. IT leaders are leveraging new tech solutions to manage the backend while freeing up their teams to focus on innovation and delivering business results. IT leaders across all performance levels list cloud migration as their top priority. 03 Executive Summary The State of IT
  • 5. 5State of IT The way people interact with the companies around them has dramatically changed. Customers and employees alike have grown to expect companies to deliver easy, personalized, and on-demand experiences that evolve along with their needs. As businesses rush to keep up with the changing market, IT’s scope of responsibility is rapidly expanding. Beyond managing technical operations, IT teams are becoming increasingly central to every facet of the business. of IT teams are currently developing apps for customers, partners, and employees. App Development Scope Expands for IT Teams App development is central to IT strategy. Here is the breakdown of apps currently being developed, by type. 25% 42% 34% Customer/commercial apps Partner-productivity apps Employee-productivity apps Introduction Today’s IT: The Business of Innovation 79%
  • 6. 6State of IT While IT’s impact has grown well beyond “keeping the lights on,” teams still need to maintain core operations. IT leaders are expected to deliver on cutting-edge, customer-driven applications on top of everyday functions. Key business needs such as worker productivity, data visibility, and automating business processes still top the charts as the building blocks for growth. Core IT Stays in Focus IT leaders are expected to innovate on customer-facing apps while still delivering on typical internal needs. Here we see the top outcomes that IT teams strive to achieve; centered around solving core needs such as worker productivity, data visibility, and process automation. “At the end of the day, Brown-Forman sells and markets spirits and wine. That’s what we do. If we can use our IT dollars to assist that work in any way possible, rather than just keeping the lights on, we should continue to do so.” — Toby Lester, VP of Technology Architecture Innovation 55%increase worker productivity 47%increase data visibility across the business 42%automate business processes Introduction Today’s IT: The Business of Innovation IT LEADER perspective
  • 7. 7State of IT Digital Trends Redefine IT InvestmentsIT leaders are becoming more focused on innovative, digitally driven tech and the security that goes along with it. The top three areas for increased spending are mobile apps, cloud migration, and cybersecurity/incident response. Despite IT’s shift to a strategic business driver, budgets have not kept pace with the demand. Across teams at all performance levels, budget is consistently cited as the number one pain point. Sixty-eight percent of IT teams report spending more on mobile apps, cloud migration, and cybersecurity/incident response over the next two years. At the same time, 63% plan to increase spend in customer-facing apps. Here are the top five investment areas.* Introduction Today’s IT: The Business of Innovation Mobile applications 68% Cybersecurity, incident response 68% Cloud migration (storage, compute) 68% Customer-facing apps 63% Productivity applications 62% Percentage Increasing Spend over the Next 2 Years * This chart shows only the top five. For the complete list, see page 24.
  • 8. 8State of IT High performers Moderate performers Underperformers Top IT Teams Embrace Digital and Tech Trends High performers are 3.7x more likely than underperformers to say they are excellent or above average at staying ahead of technology trends. They are also 4.2x more likely to say the same about implementing digital transformation across their company. The radical shift in the way IT operates within a company — acting as innovation leaders and digital experts — has forced leadership to rethink their IT strategies. The most successful IT teams are pushing the envelope and planning for customer-facing app development as consumers grow to expect modern and mobile technology. Top teams in the digital age are not afraid to take risks — they are actively testing, adopting, and mastering new technologies as they emerge. Ability to stay ahead of technology trends 95% 26% 70% Ability to implement digital transformation across their company 91% 22% 75% Ability to digitally engage at scale 91% 19% 73% High Performers vs. Underperformers Percentage Rating Their Ability as Excellent or above Average 3.7x more likely to excel at staying ahead of tech trends 4.2x more likely to excel at implementing digital transformation 4.8x more likely to excel at digitally engaging at scale Strategy Under Siege: Digital Shakes Up Traditional IT01
  • 9. 9State of IT Moderate performers Underperformers High performersHigh performers Underperformers Moderate performers 10% 40% 60% 70% 30% 20% 50% 10% 40% 60% 70% 30% 20% 50% Top Teams Double Down on Customer and Mobile App Spend Customer needs and mobile access are becoming central to IT apps. Seventy-six percent of high-performing IT teams report increasing spend in customer-facing and mobile apps. The movement toward a more customer-centric mindset in IT is reflected in spending, particularly among high performers. Top companies are accelerating their plans to meet the demands of mobile and connected customers. Nearly 90% of new apps launching in the next 12–18 months will be created with a mobile-first mindset. Customer-Facing Applications Mobile Applications High Performers vs. Underperformers High Performers vs. Underperformers 42% 76% 66% 54% 76% 71% 1.8x more likely to be increasing spend in customer-facing apps 1.4x more likely to be increasing spend in mobile apps Strategy Under Siege: Digital Shakes Up Traditional IT01 Percentage of IT Leaders Planning to Increase Spend over the Next 2 Years
  • 10. 10State of IT The Age of the Chief Digital Officer Sixty percent of companies surveyed already employ a chief digital officer — a leadership role that was scarcely heard of a decade ago. A new emphasis on the customer and digital trends brings the need for new perspectives and skill sets. CIOs now need to be visionaries for not just their departments, but the company as a whole. A recent role, the chief digital officer (CDO), has become a must-have in many organizations. CDOs usually have a marketing background, consumer knowledge, and a hyperfocus on digital trends. The role has become more prominent as employees and customers alike expect consumer-friendly tech. In fact, 60% of companies currently employ a chief digital officer. “Any company that doesn’t use technology to redefine themselves and keep up with the times is bound to go obsolete. One sign of that is the growing blurring of the distinction between the CMO and the CIO. Any IT leader today has to be able to straddle that divide and be able to talk the business language, and vice versa.” — Sineesh Keshav, VP of IT Application Development 60%of companies currently employ a chief digital officer Strategy Under Siege: Digital Shakes Up Traditional IT01 IT LEADER perspective
  • 11. 11State of IT In order to stay ahead of digital transformation and innovate as quickly as possible, new skills are vital. There is a widening gap between demand for new types of apps and talent, made more severe by growing budget demands. Almost three-quarters of IT leaders say talent/IT skills development and training will be absolutely critical or very important for their team in the next five to eight years. However, four out of the top 10 obstacles cited revolve around the growing skills gap. The Skills Gap Widens: IT Leaders Bank on Training and Tools02 Budgetary constraints Organizational alignment Emerging tech/trends make it difficult to keep skills current Support of legacy systems Security issues Lack of skilled administrators Lack of skilled developers Upgrade management Lack of resources for IT skills development Creating a connected customer experience IT Leaders Mind the Skills Gap Four out of the top 10 pain points that IT leaders face are related to the skills gap. One-third of IT teams struggle to keep skills current with emerging tech.* 43% 26% 33% 25% 40% 26% 32% 24% 31% 24% * This chart shows only the top 10. For the complete list, see page 38. Skills-gap related pain points Other top pain points
  • 12. 12State of IT The Race to Create Causes the Skills Gap to Widen The top three areas where companies report a needed skills gap are data engineering, IT security, and app development. As companies race to keep up with app demand and innovate on advancing technologies, the need for talent increases. More than half of IT leaders are experiencing a skills gap in data engineering, IT security, and application development. Application development IT security Data engineering 56% 51% 52% “As we continue to grow fast, we need to drive efficiency, scalability, and sustainability. But as the saying goes, ‘The cobbler’s children have no shoes.’ Like many technology companies, however fast we recruit engineers, there is an endless backlog of customer- and production-facing projects that take priority over developing new internal business applications. ... So after suffering this resourcing challenge for many years, we finally accepted that it would never change — we needed an alternative approach.” — Paul Clarke, Director of Technology The Skills Gap Widens: IT Leaders Bank on Training and Tools02 Percentage Citing a Needed Skills Gap IT LEADER perspective
  • 13. 13State of IT Top Performers Are Prioritizing Training and Development Training and development have become a main focus as IT leaders work to close the skills gap. Ninety-six percent of high performers invest in training for technical staff. IT leaders understand the importance of ramping up training and development as they work to close the skills gap. Eighty percent of IT leaders say their company’s leadership cares about training and development for technical staff — and many are demonstrating that with increased investments. Top performers are raising the stakes by ramping up their training budgets. Meanwhile, only 55% of underperformers are investing in training and development. of underperforming teams say they aren’t currently addressing the IT skills gap at all. 96% 90% The Skills Gap Widens: IT Leaders Bank on Training and Tools02 55% High performers Moderate performers Underperformers Percentage Investing in Training for Technical Staff 19%
  • 14. 14State of IT “When we first launched our cloud strategy, we had a buzzword that said ‘SaaS first, cloud first,’ and I think that actually scared a lot of people. So we took a step back and tried a little different approach to educate people and show them how many of their skills are very transportable to a cloud environment. There’s a lot of new cool stuff they can learn. We’ve had lunch and learns, breakfast workshops, and actually launched some training called Cloud 101 to teach what cloud was and what cloud wasn’t. Today, NetApp IT as an organization has truly embraced the cloud.” — Cynthia Stoddard, CIO SVP Top Performers Feel Valued by Leadership High performers are 4.3x more likely than underperformers to strongly agree that leadership places a high value on the tech practice. It’s important that leadership champions training and development for IT efforts to be successful. Sixty-six percent of high performers strongly agree they feel valued by their leadership, while only 15% of underperformers feel the same. 14The State of IT Spotlight Leadership Support Inspires Success High Performers vs. Underperformers 4.3xmore likely to strongly agree leadership highly values the tech practice 40% 60% 30% 20% 50% 10% High performers Moderate performers Underperformers 66% 43% 15% IT LEADER perspective
  • 15. 15State of IT Technology Shifts: The Cloud and Emerging Tech Lead the Way03 Speed Wins the Race: Top Performers Develop Apps Faster Seventy-two percent of high-performing companies can develop an app in three months or less, while only 46% of underperformers can do the same. Here we see the difference in app development time as divided by performance level. IT teams need to move faster than ever to propel their business into the digital era. Training and development are only part of the skills-gap story. Embracing new technologies is an equally important aspect of accelerating innovation. The strengthening of the cloud and emergence of rapid app development platforms, for example, are enabling successful IT teams to free up talent for business transformation. Underperformers Moderate performers High performers 72% 65% 46% 17% 21% 30% 12% 14% 24% 3 months or less 4–6 months 7+ months
  • 16. 16State of IT Complexity Grows as Integrations Multiply Two-thirds of IT leaders say they are integrating with 11 or more systems. As the complexity of integrations increase, cloud migration becomes a priority for tech practices. While IT teams strive to increase their pace, the proliferation of apps and integrations can be a bump in the road. Nearly one-third of IT leaders say their tech practice supports between 11 and 50 apps. Beyond that, two-thirds of teams are integrating with 11 or more systems. As app development becomes more rigorous and integrations become more complex, companies are using the cloud to support fast-paced development. Nearly two-thirds (63%) of companies who operate in the cloud can develop an app in three months or less. of those developing in the cloud say they are working primarily on projects that will transform their business. Technology Shifts: The Cloud and Emerging Tech Lead the Way03 26% 1–10 integrations 36% 11–25 integrations 37% More than 25 integrations 80%
  • 17. 17State of IT Cloud Migration Is the Top Priority for IT Leaders IT leaders list cloud migration as their top priority. Seventy percent rated cloud migration as absolutely critical or very important over the next five to eight years. Since deploying in the cloud can relieve large staffing needs — allowing for faster innovation — companies are making cloud migration a priority. Nearly two-thirds of companies that operate in the cloud rate their ability to digitally scale as above average. Cloud services allow companies to off-load data management, operating system development, and even design, so they can produce higher quality apps as fast as consumers expect them. of cloud-enabled companies say their executive team is leading the business in a digital transformation. Rated Absolutely Critical/Very Important over the Next 5–8 Years 67% 44% Big data/data warehousing 64% 37%Data localization, archival, and retention 72% 46%Talent/IT skills development and training 70% 47% Cloud migration 69% 44% Disaster recovery/high availability 60% 34% Predictive analytics 58% 35% Internet of Things (IoT) 69% 45% Cloud access security brokers/tech 63% 39% Software as a service (SaaS) 66% 43% Mobile device management Top Ranked Priorities over the Next 2 Years* * This chart shows only the top 10. For the complete list, see page 35. Technology Shifts: The Cloud and Emerging Tech Lead the Way03 73%
  • 18. 18State of IT High Performers vs. Underperformers 1.9xmore likely to trust storing core infrastructure data on a public cloud 40% 60% 30% 20% 50% 10% Top Teams Rely
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