It's that time of year when business and IT pundits alike peer into their crystal balls, and tell you what's ahead for 2012 and beyond. But the number of predictions and the resulting advice that emerge each year can be overwhelming at best, and confusing at worst. This year we're going to try to do the heavy lifting for you. Rather than create yet another list of predictions, we've decided to integrate our predictions with those from leading media, analyst, research, and consulting firms-including Gartner, Aberdeen, Forrester, McKinsey, and major IT trade publications. We want to put key information about major trends at your fingertips, and help you start thinking about what your organization needs to do to prepare.
When you boil things down, you end up with three megatrends that will fundamentally change how SMEs do business next year and beyond. They will influence how you invest in technologies that keep you ahead of the competition and create business value. And they are driving issues that will challenge your organization and your industry.
Megatrend #1: Universal ConnectivityTrend summary: If your fleet vehicles, employees, mobile phones, ERP systems and customers aren't already connected electronically, they will take another quantum leap towards that end in 2012. Ubiquitous connectivity is forcing significant change in business processes in the front office as well as the back.
Everything a business process contends with will have an IP address, and that process will be able to account for all customer, partner, and employee touch points in real time. SMEs that embrace this new connectivity model can drive massive value for their businesses. But beware: buying new technology for technology's sake will exacerbate your current challenges if you don't have a sound strategy and an experienced execution team in place.
Key issues for your business
• Managing customer relationships. The universal connectivity trend creates equal amounts of danger and opportunity for your service department. The danger lies in the sheer number of ways your customers want to connect with your business, and maintaining cohesion and service levels across all channels-including physical store, field service, phone, email, SMS, company web site, Internet search, third-party review sites, and more. But these complexities also create opportunities, especially if you are among the first in your market to harness the power of multi-channel interactions with customers. Each channel can mean more customer insights, more sales opportunities, and more ways to build stronger relationships.
• Employee productivity and the consumerization of IT. Just as universal connectivity compels you to embrace customers across all the communication channels they wish to use, it's important to consider employees as well. They're bringing personal tablets and smartphones into work every day, which provide a relatively low-cost opportunity to increase productivity if your IT strategy embraces consumerization. In addition to supporting personal devices paid for by employees (cost reductions, anyone?), you should also evaluate the productivity technologies you invest in and provide on a regular basis.
• Application development and integration. Integrating your information systems is no longer an option. It's a requirement in the age of universal connectivity. This means you must have contemporary application development methods to ensure all IT assets added in the future will integrate well with what you have today and create tomorrow. It also means it might be time to devise a strategy to deal with your legacy (i.e., siloed) systems. If you determine there is critical information in older systems that are not efficiently connected to your real-time enterprise, it might be time for a strategic IT makeover.
• Security and governance. Universal connectivity means greater security risk. It used to be enough to install firewalls on your routers and anti-virus on your email server. But today, you need a "defense-in-depth" strategy that authenticates users, protects data at rest and data in motion, and protects every in-house and remote computing endpoint that connects customers and employees. And this is in addition to protecting every core IT asset in your enterprise.
Trend summary: Ubiquitous connectivity creates many new challenges. One of them is the emergence of "Big Data," which can be summarized as the exponential increase in data volumes produced by your company, your customers, your employees, your partners, and the business environment around you. You will either sink or swim in it, depending on your approach.
There are internal and external implications brought forth by the age of Big Data. A recent story in an IT trade publication reported on a mid-sized energy plant in Europe that installed new monitoring systems. These systems drove an increase from 500,000 to 20 million pieces of data per hour. The increased volume maxed out the company's databases and stressed the servers, which started to shut down. Only when they figured out how to manage the new data was management able to drive efficiencies in practically every part of the plant.
That's just one example of a Big Data scenario, but they are practically limitless. Aberdeen Group writes: "As data volume increases and the decision windows shrink, it is becoming increasingly important to derive business value from all available data.' Billions of connected devices and people will give more and more information on their location, status, and behavior than ever before. Data volumes are doubling every 18 months as a result of greater access to customer data from public, proprietary and purchased sources; plus new information gathered from web communities and newly deployed smart assets.
Key issues for your business
• Having enough computing power to process data. Databases, servers, and core enterprise software applications are the first IT assets to buckle if they don't support Big Data. It's crucial to assess your IT infrastructure before you decide to increase data volume. If not addressed in advance, critical internal and customer-facing business processes are in jeopardy.
• Establishing one version of the truth. Equally critical as computing power is the ability to integrate multiple data feeds and reconcile them for accuracy, and to do so quickly and efficiently. This effort is most easily managed with a single business management platform rather than continuing with an IT architecture that has multiple peer systems.
• Business intelligence or business negligence. Big Data is ending the era where managers can manually aggregate departmental data, and make gut decisions about information-driven areas of the business. Business intelligence software will be a welcome-indeed, indispensable-addition to the decision making process in 2012, because it can harness large volumes of data in ways that humans simply can't. And then it helps executives turn that data into actionable information that drives better business decisions.
Trend summary: The shift from on-site computing to services provided by IT infrastructure specialists is growing at an astounding rate. Gartner predicted in October that by the end of 2012, approximately 20 percent of enterprises will not have a physical IT infrastructure, but instead will outsource all related services.
Over the past few years, SMEs have been slow to invest in cloud computing. After all, they're still trying to make sense of it, and many cloud solutions haven't been targeted enough to motivate many to make the switch. This scenario is changing fast, making cloud computing's biggest benefits-lower costs, higher flexibility, and greater scalability-more attainable. But cloud computing means many things to many people. It's critical your company determines what it means on your terms, and the value it can bring to your operations.
Key issues for your business
• Compliance and regulatory issues. In some ways, there's no difference in your company's responsibility to maintain compliance for in-house or cloud-based information systems. However, the legal and regulatory organizations are catching up to the latest cloud innovations, and have set different precedents and expectations for them. And many cloud services providers are not equipped to support some or all regulatory and compliance requirements. Consequently, it's critical your internal teams and vendors stay abreast of compliance and regulatory requirements, and diligent about such capabilities.
• Determining costs and benefits for YOUR company. Reading the headlines today, you might assume every company's IT infrastructure will be 100 percent cloud-based within a few years, and awash in the benefits. But a recent survey of SAP's SME customers tells us this is not the case. The median companies are doing pilots or just launching their first major projects, to prove the real costs and benefits. Until then, they're not "all in' to the cloud.
• Integration strategy for cloud and on-premise systems. If you're like most SMEs, you won't move from an all-on-premise to an all-cloud environment overnight, if ever. Your computing environment will be heterogeneous for years to come. But the cloud will play an increasing role in certain strategic areas, such as financial management, business intelligence, collaboration and office applications. It's important, therefore, to define a strategy and implementation process that works for your organization, with the appropriate timeline, milestones, and ROI targets.
• The changing requirements for IT expertise and support. Even though cost savings is one of the chief incentives for moving to the cloud, it's more important than ever to invest in qualified internal and external personnel to manage not your initial cloud migrations and ongoing care and feeding of the environment.
If there was ever a year to bring in some fresh insights to examine your current IT strategy, it's 2012. That's because your businesses' success has never been as dependent on IT as today. What's more, the megatrend opportunities that are before us now-universal connectivity, Big Data, and cloud computing-are rich and complex. They are best addressed in teams, with partners and experts who have already met the challenges you face many times over.
