The State Of Digital Business Transformation, 2018

These and many fascinating insights are from the IDG’s 2018 State of Digital Business Transformation (12 pp., PDF, no opt-in). The study’s goals are to gain a better understanding of how organizations are evolving to a digital business model in regards to how they are revising technology strategies, changing organizational structures and processes, and innovating to provide a unique customer experience. Respondents were selected from CIO, Computerworld, CSO, InfoWorld, ITworld and Network World tech buyer audiences. The majority of respondents are IT executives and professionals. Please see page 10 of the study for additional details regarding the methodology. “Technology has been a driving force in business transformation for years, but the pace at which new technologies are launching has reached its fastest speed. Now is the time to create efficiencies and differentiate through the customer experience,” said Brian Glynn, chief revenue officer, IDG Communications, Inc.

Key takeaways from the study include the following:

  • 89% of enterprises have plans to adopt or have already adopted a digital-first business strategy with Services (95%), Financial Services (93%) and Healthcare (92%) leading all industries. Education, high-tech, manufacturing, retail, and government are also quickly adopting digital-first strategies to improve process efficiencies and meet and exceed customer expectations.

Digital-First-By-Industry

  • Big Data/Analytics (58%), mobile technologies (59%), private cloud (53%), public cloud (45%) and APIs and embeddable technologies (40%) are the top five technologies already implemented. Additional technologies currently in production include Application Performance Monitoring (APM) (18%), microservices and containers (15%), Software-defined storage (SDS) (14%) and Software-defined networking (SDN) (14%). Artificial Intelligence (39%), machine learning (34%), and the Internet of Things (31%) are the top three technologies enterprises are researching today.

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  • Big Data/Analytics, mobile technologies, and private cloud contribute most to an organization’s revenue growth. IDG analyzed which technologies are contributing most and least or revenue growth. With 49% of enterprises saying excelling at managing business performance through data availability and visibility is what defines their digital business, it’s understandable why Big Data/Analytics is perceived by 70% of IT executives as contributing to revenue growth.

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  • 61% of enterprises say IoT plays a role in their digital business strategies with manufacturing and high-tech leading all other industries. Just 39% of small & medium businesses (SMBs) say IoT plays a role in their digital business strategies today. Finance and government industries are the least likely to adopt IoT as part of their digital business strategies due to legacy systems being very difficult to change or integrate with and security concerns.

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  • 73% of manufacturing executives or IT decision makers (ITDM) says IoT plays a role in their digital business strategy, with 69% saying IoT is used to monitor equipment and machinery today. 24% of manufacturing IT executives interviewed say IoT is in production in a business unit or division. Creating a business case in manufacturing for IoT begins by looking at how quality, time-to-market and production performance can be improved. The manufacturing metric Overall Equipment Effectiveness (OEE) is one of the primary catalysts driving real-time monitoring including IoT adoption across manufacturing today.

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  • Start-ups can increase revenue by 34% relying on digital-first strategies, with all enterprises increasing revenue by 23% with new product and service offerings being the largest contributor to revenue growth across all companies. 30% of all enterprises interviewed by IDG say that new product and service offerings are the primary sources of revenue growth for their companies, followed by adding new capabilities inside the company and improving sales capacity to cross-sell and upsell. 22% say that their improved ability to integrate and analyze company, customer and external data is contributing to increased revenue. 22% also credit digital business strategies with the ability to increase product and service delivery speeds. New partnerships, global or regional expansion and M&A (merger & acquisition) activity are the remaining factors driving revenue growth. Multiple responses were allowed to the original survey.

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  • Enterprises’ definition of a digital business varies from enabling worker productivity to meeting customer experiences. 52% of enterprises say enabling worker productivity through tools such as mobile, data access, and AI-assisted processes are the essence of their digital business strategy. 49% say better managing business performance through data availability, and visibility is what defines their digital business, and 46% say meeting customer experience expectations using digital technologies is the center of their digital business.

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  • 62% say delivering an excellent customer experience as measured by customer satisfaction scores defines success as a digital-first business. The intensity to gain high customer satisfaction scores in retail is high, with 79% saying this is by far their most important benchmark of a successful digital-first business. 70% of manufacturers define the digital-first business strategies as successful when they improve process efficiency through automation. 53% of services companies and 51% of finance companies define digital-first business success by their ability to accelerate time-to-market.

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Contributor: Louis Columbus – Source

How fintech and neo banks are using IT

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Most people see fintech startups and neo banks are something run by young, terribly hip people of the kind you see on the TV drama ‘Silicon Valley’. That is only part of the truth; the people behind them are achieving success because they embrace the technology that allows them to understand their customers’ needs and have the flexibility to develop rapidly-evolving products.

They have an advantage over the traditional banks, because the banks have IT systems that are old, slow and complex. The newcomers are not encumbered with the same problem.

The Financial Times said about the banks’ IT: “The cost of maintaining these often ageing and unwieldy systems eats up three-quarters of banks’ IT spending, according to Celent. That leaves only a quarter to spend on innovations to keep up with the rapidly emerging threat from the many technology groups and start-ups trying to steal market share in areas such as payments.”

By contrast, the neo banks ands fintech startups are up-to-date with infrastructure and have a huge competitive advantage as a result. While banks are forced to fund costly projects to create IT solutions that will integrate with their ageing infrastructure, the fintechs can invest in whatever technology they need to drive growth, knowing it will integrate with their existing IT systems.

The newcomers also have better customer insights, because they have made to their business to get to know the consumer better than the banks do. They are using data analytics tools to collect data from research and surveys, social media, and their existing customers using online and mobile applications. And they use CRM systems to personalise their product offers. PwC’s Global Fintech report reveals 75% of financial services leaders think fintech’s biggest impact will come from its increased focus on the customer.

Finally, fintech startups and neo banks make grater use of Cloud tools and this enables them to deploy apps at greater speed and they can scale up or down to meet customer demand.

Will a customer prefer to get a loan from a fintech that can complete the process and transaction in 15 minutes or go to a traditional bank where it may takes days or weeks? The answer is logically that they will go to the fintech. And will the banks try to catch up with the IT innovations and speed up their systems? That remains to be seen.

 

 

A decentralised business is better for you

The background of a magnificent city

Let’s start by looking at Equifax. This is a U.S. company, and one of only three, that provides credit reporting on American citizens. Last year there was a massive security breach, which meant that the personal information of at least 143 million was in the wrong hands.

The problem here is that your personal data is centralised when these big credit-rating companies have it, and that means it can be manipulated; by them or by other parties through theft.

If Equifax stored consumer data on a blockchain-based system, the information would not only be better protected, the company itself wouldn’t be able to mess around with it in any way.

The blockchain uses cryptographic hash functions that both encrypt your data and track historical changes to it. Therefore, at any point in time, if any piece of your data is tampered with, you personally will be able to immediately see where and when the information was changed.

However, security isn’t the only advantage decentralised storage of data can bring. The communities using decentralised ledgers are incentivised to show more respect and this contributes to more efficient operations.

The incentive of having a stake in the business

Some platforms, especially those decentralised ones that have utility tokens, engender a sense of community, because every person involved has something to gain by making sure the platform runs for the benefit of all. It also means that they literally have a stake in the company just through token ownership. Also, all the community members can see how a platform uses their personal information and the steps taken to protect it.

There will always be bad actors in any company, and sharing economies are no different, although you’d think that in this particular sector, people are less likely to take advantage of other community members, but we’d be naïve to believe everyone really gets the idea of ‘sharing’. However, in decentralised communities, any bad actors are actively disincentivised, because if things go well, the stakeholders all benefit. If a bad actor contributes to making the company less successful, then they are shooting themselves in the foot.

If you take the example of Uber, which is s centralised company; none of the Uber drivers have a stake in it. They have no incentive to act in a way that makes the company more successful, because all the benefits of success go to the founders and shareholders. If Uber was a decentralised business, with drivers having some form of stake in it, it would be a very different story.

We may see an increasing demand for companies to adopt a decentralised approach, because ultimately it benefits the consumer, and they could be the driving force that increases the use of a new decentralised business model.

 

 

 

Fundstrat bullish about Bitcoin for 2019

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Fundstrat Global Advisors, co-founded by Tom Lee, has just published a report claiming that Bitcoin prices will reach $36,000 by the end of 2019. How has it arrived at such a bold prediction? Fundstrat says the answer is mining costs.

Fundstrat’s Quantamental Strategist, Sam Doctor, analysed the relationship between Bitcoin mining costs and price, to come up with the prediction that the price range will fall somewhere between $20,000 and $64,000 next year.

He based his calculations on a Bitcoin Price to Mining Breakeven Cost Metric, known as P/BE, which he claims has “proven a reliable long-term support level.”

A statement from Tom Lee, published on Twitter, said: “We expect the mining economy to grow over the next several years, and project a BTC price of ~$36,000 by year end 2019 based on the historical average 1.8x P/BE multiple.”

The Twitter statement also points out that the rise in electricity costs is slowing and use of power is becoming more efficient as larger rigs with a higher hash power per watt, are now appearing. Plus, mining operations are getting bigger, bringing the benefits of scalability to the scenario.

However, he did point out that there was one risk to the prediction: “a material shift in the trajectory of hash power could change the P/BE support level of BTC price.”

It is interesting that Tom Lee’s personal prediction for BTC was $25,000 by the end of 2018 and both Lee and Fundstrat have been bullish about BTC this year. They also issued a statement in April, saying that 82% of institutional investors believe the price had now bottomed out.

If you own BTC and both Fundstrat and Lee are correct than it will be worth holding on to them for some time to come.