New Research Report Spotlights Advanced Analytics for Digital Business

What is Happening?

In a Digital Business world, analytics is the lifeblood of the enterprise. Profit line managers use it to meet objectives, while finance use it to help manage the business. Wall Street demands it to make money from it. While money is the language of business, analytics is its handmaiden. The practical contributions of traditional statistical analytics and data modeling are seen in econometrics, scientific modeling, landing a man on the moon, six sigma, lean manufacturing, and are used in every industry and operating function, including sales, marketing, finance, talent management, sourcing and procurement, customer service, productions, logistics and product service among others. However, the uses of traditional computational analytics to support business operations are nothing compared with the competitive advantages from the uses of advanced predictive analytics, machine learning and intelligent machines.

As a new Leadership Report published for clients of our Business IT Strategy & Transformation research View indicates, we are on the cusp of a revolution in analytics that will have a far-reaching impact on businesses, governments and our daily lives. Advanced analytics with the digitization of our world will forever change the face of work, business models, and industrial markets as known today. The new advanced analytics – including data mining, machine learning, big data analytics and machine intelligence – while built on a foundation of statistical analytics, differs from it considerably. The new advanced analytics are not limited to numbers; but work on any data. The new advanced analytics are not limited to delivering fact-based descriptions; but go on to predict, prescribe, reason, and behave; in short, like an intelligent and sensing businessperson. Continue reading New Research Report Spotlights Advanced Analytics for Digital Business

Office 365 Migration is Inevitable, and Complex

Migration to Office 365 is inevitable for virtually all organizations for several reasons, including the instant availability of new features, simplification of the IT environment, and elimination of the technical debt of extensive customization. However, as outlined in a new Leadership Insight published for clients of our Sourcing Strategies subscription research and advisory View, it should not be viewed as a cost-saving measure. Moving to the cloud involves both legal and technical complications, particularly for companies that have complex SharePoint implementations with large numbers of mission-critical workflows, interfaces, and workarounds.

The main drivers for this move include internal pressure to reduce maintenance costs and Microsoft’s Cloud-first strategy, which means that all upgrades to Office and SharePoint will appear in the cloud first and on-premises much later, if at all. The online versions of Exchange and SharePoint will be the vanguard of Microsoft’s product strategy. Continue reading Office 365 Migration is Inevitable, and Complex

A Disconnect at IBM Connect 2016

What is Happening?

Typically, the vendor/provider events that we attend and participate are easy to characterize. The message that the host wants or needs to deliver is crafted and delivered directly, clearly, and through multiple avenues on multiple fronts. The annual IBM Connect event (née Lotusphere) is usually such an event, and it is usually very easy to see/hear and follow a well-articulated, well-supported core message across all aspects of the event, from keynote to sessions to meals to hallway conversations.

This year was different. Not because IBM failed at articulating its message, but because IBM and the audience, including its partners and enterprise clients/users, were experiencing disconnects between a Connections future and the Notes reality.

On one hand, IBM showcased an emergent IT of useful, collaborative, interconnected, productive and communicative entities, linked and enabled by its Connections “social business” platform and Verse email/collaboration-as-a-service. Inspiring case studies were woven into the keynote sessions; announcements of new and improved features and interconnectivity were demonstrated, and their intent clearly explained.

On the other hand, IBM, its partners, and its customers, all expressed uncertainty regarding what was happening right now with social business in general and with Connections/Verse, and why. IBM partners at the event all supported IBM’s goals and positioning, but the vast majority did not themselves offer collaborative tools or services; they focus instead on enhancing and extending Notes platform capabilities. And outside of those selected to present on Connections or Verse, customers were much more focused on wringing the most possible utility out of legacy Lotus-based solutions. Continue reading A Disconnect at IBM Connect 2016

FASB Reshapes Cloud Capitalization

What is Happening?

In December of 2015, new guidance from the U.S. Financial Accounting and Standards Board (FASB) went into effect regarding how public companies should account for fees associated with Cloud computing contracts. This guidance clarified that if the arrangement does not include the transfer of a software license, fees should be treated as a service contract. Importantly, the guidance from the FASB was noteably silent on how to account for implementation fees associated with Cloud contracts, citing that initial costs incurred in service arrangements are not unique to Cloud arrangements. This new guidance, coupled with the lack of guidance on implementation costs, is creating concern that customers can no longer capitalize implementation costs associated with Cloud services.

Why is it Happening?

Adoption of cloud business solutions and cloud infrastructure is surging. However, a consistent approach to accounting for Cloud services within the enterprise has lagged, and has not been in harmony with the way the Cloud service providers account for their contracts. According to Accountingweb:

“…GAAP addresses accounting principles for cloud service providers, but there is no specific guidance for a customer’s accounting of fees paid to the provider. Stakeholders have voiced concerns that this omission often leads to unnecessary costs and complexity when evaluating the accounting for those fees, as well as some diversity in practice.”

FASB has resolved this concern with its most recent guidance, clarifying that the contract is a “hosting agreement” if customers cannot take possession of the software and if they cannot run the software on their own (or someone else’s) hardware. However, the FASB remained silent on implementation fees for hosting services. Continue reading FASB Reshapes Cloud Capitalization

Tackling Change – Digital Business Obstacles and Challenges

As Digital Business disruption continues to unfold through 2020, leveraging new enabling technologies will remain a key challenge to traditional enterprises – but it won’t be the biggest challenge. The even greater issues to tackle will be how to redefine business models, transform cultural / organizational tenets and re-skill staff to get the job done. These issues already pose huge barriers to entry for many entrenched businesses, according to a November 2015 C-level survey conducted by Saugatuck before our recent Cloud Business Summit. A new Strategic Perspective published for Saugatuck’s subscription research clients offers insights into the thinking – and worries – of business and IT leaders surveyed over the past two years.

Continue reading Tackling Change – Digital Business Obstacles and Challenges

Four Disruptive Trends in 2016 – The Normalcy of Global Disruption

In 2016, the reality of business, and therefore of business IT, is global. Digitally-driven disruptive change happens everywhere with few or no markets left untouched. With that in mind, a new Strategic Perspective published for Saugatuck’s subscription research client summarizes and present four globally disruptive forces of change that will shape IoTand reshape business IT throughout 2016. All of these are examined in greater detail across the Saugatuck subscription research group; check our Lens360 blog for highlights, and search the Saugatuck research library for in-depth analysis and guidance by topic area.

The four overarching global and inter-related disruptive IT trends examined in this new Strategic Perspective are as follows:

  1. The challenges of “Ubiquitous Intelligence” resulting from the convergence of IoT, AI, automation and robotics
  2. Intelligent super-hacking, as business process infrastructure tools are also applied to malware and intrusion
  3. Globalization and dispersed workforces, affecting employment, recruitment and innovation
  4. Asian exceptionalism and its impact upon global IT

Continue reading Four Disruptive Trends in 2016 – The Normalcy of Global Disruption

Welcome to 2016…the Beat Goes On!

The beginning of the year is a traditional time for prognostication. In a recently published Strategic Perspective Saugatuck takes a look through the looking glasses at some of the most likely significant challenges of 2016 that will influence enterprise IT directions and shaped the IT market. We labeled these as:

  • Transforming IT. Saugatuck projects that 2016 will bring a rapidly increasing percentage of traditional IT environments being transformed to reduce costs, improve service delivery, and accelerate responsiveness to new requirements. IT environment transformations will consist of two separate but interrelated sub-transformations that will both enable and require each other. Within the IT environment the two sub-transformations are IT infrastructure transformation, and IT process transformation.
  • Evolving Decisions From Intuitive to Informed or Insightful. Analytics will be integrated into a rapidly increasing number of business and IT processes in 2016. This will enable a transition from decisions based on intuition to decisions based on meaningful metrics. For an increasing number of processes, the adoption will go one step further and utilize cognitive analytics to move to decisions based on insights.
  • Transforming Applications for Digital Business. A rapidly growing number of enterprises will embark on transformations to Digital Business during 2016. As Saugatuck has previously explained, the transformation to Digital Business entails changes in key functional areas ranging from product offerings to customer relationship. And, the Digital Business transformation is enabled by and requires changes in the IT environment ranging from IT infrastructure to IT processes to application solutions.
  • Governing and Securing. As enterprises adopt Cloud-based offerings, the need for strong management practices and security increases. However, few enterprises are well equipped to deal with the new requirements. Cloud providers will find that the demand for both solutions and services will grow significantly in the coming year in the area of workload management, governance, and security.

Continue reading Welcome to 2016…the Beat Goes On!

The Privacy Con

What is Happening?

Online privacy is an ongoing concern for consumers, businesses, governments, and academia. But there is wide disagreement about its importance to consumers, the costs to businesses, and need for regulation. Academia asserts a lack of transparency amongst data collectors, while businesses say consumers approve of their actions.

Last week, Saugatuck’s Ron Exler participated in the Federal Trade CoDataPrivacy3mmission (FTC) first privacy conference, PrivacyCon, in Washington, D.C. More than 500 participants from computer science, behavioral science, law, economics, and politics participated, with sessions covering five key areas of IT privacy and security:

  1. The Current State of Online Privacy
  2. Consumers’ Privacy Expectations
  3. Big Data and Algorithms
  4. Economics of Privacy & Security
  5. Security and Usability

The net takeaway? Privacy is a con game with misunderstood effects. Continue reading The Privacy Con

IoT Key Issues and Megatrends Through 2016

Saugatuck’s continuous research and advisory work for clients will continue to scrutinize the Internet of Things (IoT) as it pertains to business users, service providers, and IT vendors. Three primary issues and megatrends will shape, and even determine, the future for these technologies: Interoperability, Data Management, and Security.

The industry underplays the significance of the challenges to expansion of the IoT. Sure, the potential upside is great: IoT technologies and services promise to significantly improve business and industrial efficiency, address some environmental worries, and be strong assets to cities. Interconnectivity will yield financial benefits, too, but big growth won’t occur without greater business involvement in standards and in prioritizing needs. Continue reading IoT Key Issues and Megatrends Through 2016

The Outcome Economy: Changing the Rules of the Outsourcing Game

ISG released its fifty-third quarterly Outsourcing Index® report last week, providing a quarterly review of the latest sourcing industry data and trends for clients, service providers, analysts and the media. For more than a decade, it has been the authoritative source for marketplace intelligence related to outsourcing transaction structures and terms, industry adoption, geographic prevalence and service provider performance.

The fourth quarter of 2015 was exceptionally strong in terms of annual contract value (ACV) growth, however, this came on the heels of a down year overall for the sourcing industry. For those of you that have not traditionally tracked this segment of the IT Services industry, there has been a long-term secular trend towards deals with smaller ACV and shorter contract terms. Overall, we’re seeing more deals getting done, but they are smaller and shorter.

What’s driving this change? Companies need flexibility. Smaller, shorter deals enable sourcing buyers to move more quickly in response to the dramatic changes that are sweeping through our increasingly connected global economy. Companies are also looking for outcome-based approaches that can directly Continue reading The Outcome Economy: Changing the Rules of the Outsourcing Game