IT Strategy

More than 3 in 5 executives say fear is blocking their organizations' innovation efforts, according to a Miro report published Wednesday. The company surveyed 1,792 executives in July.

Specifically, leaders are concerned about making bad investments or choosing the wrong projects as they steer enterprise innovation. Nearly one-third have concerns about hurting their careers or reputations if projects fail.

As adoption of emerging technologies progresses, the majority of leaders say their company is afraid to prioritize breakthrough innovations. More than 4 in 10 see these breakthrough innovations as the biggest threat from competitors. 

As generative AI interest skyrocketed in recent months, enterprise leaders grappled to fit the emerging technology into their innovation plans.

While generative AI investments represent a top priority for executives, concerns remain related to finding measurable value in new technology investments, as well as the cost of deployment, according to PwC data. Executives are mainly worried about potential inaccuracies and associated cybersecurity risks, another study from McKinsey found.

Executives have acutely felt the effects of generative AI due to the speed at which the technology has developed, said Bryan Wise, CIO at 6sense. But, as with any new technology, adoption rates vary.

"You always are going to have your leading edge companies … you're going to have your wait-and-see group and you're going to have the laggards," said Wise.

IT leaders worried about the pace of innovation can find relief in the facts, Wise said.

"You've got to eliminate the fear, uncertainty and doubt, and you really need to go in with the objective data points that you have at your hands to unpack what that fear may be," said Wise. 

Top business challenges that hinder innovation can come from different parts of the organization, according to the Miro report. Technologic, organizational and strategic barriers are among the most common factors.

"If you don't embrace the change, you will be a laggard," Wise said. "Because this change is happening with or without you."

If CIOs want innovation, they must create time and space for experimentation while making sure the day-to-day tasks are taken care of.

Innovation, after all, does not thrive in monotonous environments. 

“I always talk about spending 10% of our time, and really setting that time aside, to look up and out into what's really going on in the industry,” Stephen Franchetti, CIO at Samsara, said. “Regardless of what role you're in, if you're a Salesforce admin, an integration engineer or if you're a director for corporate or financial systems, it's your responsibility to really understand what ‘good’ looks like within your world.”

Experimentation doesn’t always look like white lab coats and test tubes in a lab. For CIOs, it can mean getting your hands dirty by going out and connecting with end users to better understand areas of improvement or experimenting with new technology and tools. 

When it comes to emerging technologies, such as generative AI tools, Justin Skinner, CIO at SmileDirectClub, suggests tech leaders sign up for free trials or betas. 

“Write and play around with it,” Skinner said. “Try to find a use case in your current working day.”

Rewarding experimentation and innovation is key to fostering an environment and culture conducive to better problem-solving, according to Skinner. 

Nearly 2 in 5 senior IT leaders say cultural misalignments or disconnects between IT operations and development teams play a role in blocking innovation, according to a Foundry survey of 400 senior IT decision-makers commissioned by Insight Enterprises.

To get good acceleration and ownership from team members, CIOs must celebrate people coming up with their own ideas on how to tackle a problem, Skinner said. 

“As the team’s leader, [you need to be] involved enough to know what’s really going on,” Skinner said. 

Technology leaders have to contend with the value experimentation can bring and the potential risks it can present. If CIOs fail to experiment, they may find digital transformation stunted and goals unfulfilled. But failing to acknowledge and adjust to business risks can lead to a CIO’s allocated budget withering away.

It’s a delicate balance CIOs know all too well. 

Whether the IT team is embarking on a new project or optimizing existing systems, CIOs need to stay focused on where there is potential to bring value to the business. 

“You need to really fall in love with that problem, and not just the technology,” Murat Genc, global data, technology and transformation officer at Whirlpool, said during a CIO Dive webinar in March. “You need to make sure you're building the right thing, not just building it in the right way.” 

While it’s critical for teams not to get distracted by the newest technology for the sake of adoption, it’s also important to give IT employees the opportunity to experiment. 

“Typically IT employees get focused on the problem du jour or the project that takes up most of their time, and that's probably appropriate,” Franchetti said. “But bringing that external knowledge, that kind of outside view in your interaction with the business starts to really up the conversation and the value that you can add to the organization, and ultimately gets us to a better solution.”

Companies are still struggling to bring cloud investments in line with business goals even after migration efforts conclude, according to an HCLTech report published Tuesday. The tech company had FT Longitude survey 500 business and IT leaders in March.

When organizations neglect to tie cloud deployments to business outcomes, migrations fail to return measurable value and workloads may end up back on-prem, the report found. Nearly one-quarter of respondents said their organization will repatriate apps and workloads to traditional data centers in the next three years.

Nearly three quarters of respondents said their organization is only just beginning to unlock the potential of cloud, and nearly one-third of respondents acknowledged poor alignment between business and IT departments hinders progress.

Cloud isn’t a panacea for all that ails IT. Scalable infrastructure, on-demand compute and a menu of additional tools and services stoked enterprise appetite for the technology. Most executives are pleased with the results.

Indeed, 9 in 10 respondents said cloud was pivotal in enabling rapid responses to critical business events, including cyberattacks, geopolitical instability and changes in customer preferences. More than three-quarters credited cloud with helping their company mitigate supply chain disruptions and minimizing the impact of inflation.

Yet, as cloud matures, a gap has emerged between what organizations believe the technology is capable of and the impact deployments have had on their business.

Business and technology leaders alike have learned that returns on cloud investments are not automatic — success in cloud is predicated on integrating business and technology strategies.

More than half of respondents, 59%, acknowledged that senior leaders in their organization don’t appreciate the degree to which business strategy drives successful cloud journeys, and 56% said senior leaders don’t take enough interest in cloud technologies.

The disconnect is reflected in a breach between IT and business leader perception. While more than 9 in 10 IT leaders surveyed said knowledge of cloud capabilities existed throughout their organization, fewer than 4 in 5 business leaders agreed.  

Misalignments among organizational leaders are exacerbated by the complexities of controlling cost in an on-demand tech ecosystem. Inefficiencies pile up when companies leave existing cloud credits unused as new migrations commence.

Difficulty sourcing cloud technicians and engineering talent amid the migration rush has left some companies pining for the days of the trusty on-prem data center.

“Repatriation usually happens as a result of workloads being migrated or lifted and shifted to the cloud without optimizing them,” Mike Kail, CTO at cloud software company PrimaryIO, said in the report. “You have to optimize your applications and workloads to get the full benefit [of cloud].”

Technology leaders are torn between the impulse to innovate through new technologies and the need to optimize existing IT, according to a Monday report from Lenovo. The tech company surveyed nearly 700 CIOs in March.

Nearly half of respondents said they would prioritize innovation over optimizing the current tech stack, the survey found. While shoring up cybersecurity was the leading concern for just over half of respondents, more than 2 in 5 reported “urgent pressure” to deploy AI and ML capabilities.

CIOs were also nearly evenly split in their approach to modernizing their tech stack. Just over half said they’d replace at least half of their current IT assets. The other half would keep all or most of those assets in place.

Companies have learned to lean on technology to drive business outcomes, improve efficiency and grow revenue. Investing in the right kinds of integrated technologies — cloud, cybersecurity and data systems, to name three — can even boost market valuation, according to a recent Deloitte study.

But the enterprise embrace of modernization can put CIOs in a tricky spot. Weighing the cost and value of new deployments against the perils of piling up technical debt within existing infrastructure is a delicate operation.

One-third of CIOs surveyed acknowledged their organization’s IT lacks resilience, a state that often derives from a failure to optimize, leading to technical debt.

“In business terms, we call it ‘the increased cost of complexity,’” Aamer Baig, senior partner at McKinsey, said at last month’s MIT Sloan CIO Symposium.

“In non-technical terms, it’s 'spaghetti code' leading to spaghetti-sprawl solutions,” Baig said, citing temporary IT fixes that become permanent, poorly written code embedded in overlooked applications and software in need of updates.

Balancing IT’s needs with internal pressure to onboard new technologies is difficult under the best of circumstances. Economic uncertainty has added to the challenge. While analysts agree enterprise tech budgets will continue to grow, inflation and high labor costs in a tight market for talent are limiting factors.

Nearly 3 in 5 CIOs expect their IT budgets to grow by 10% or less in the next 12 months, which may provide some spending flexibility if current inflation rates hold.

The long-term solution involves integrating optimization into digital transformation so that innovation can keep up with continued attention to existing infrastructure, according to Manju Naglapur, SVP and general manager of cloud, applications and infrastructure solutions at IT services and consulting firm Unisys. 

Modernization and optimization are parallel activities, Naglapur said.

David Linthicum, Deloitte’s chief cloud strategy officer, sees new technology as integral to optimization.

“The reason people are leveraging generative AI, for example, is because they see the ability to optimize building boats or manufacturing cars or whatever their business is,” Linthicum said. “It’s technology that's going to allow them to take the business to the next level.”

Ballooning data costs afflict most companies, according to a Wakefield Research survey of 200 DevOps and Site Reliability Engineering professionals commissioned by Edge Delta. The firm also surveyed 300 observability, Kubernetes and CX application professionals for the study.

Nearly all respondents said their organization encountered data cost overruns at least a few times per year and over half experienced overages or unexpected spending spikes monthly.

Despite the business value of analytics, organizations often have to purge data. Nearly all respondents admitted their organization discards data to cut costs and more than 4 in 5 said they commonly limit log ingestion for the same purpose. Nearly one-third acknowledged data is discarded randomly by their company.

Data is the lifeblood of business, but too much of even a good thing can be toxic.

Nearly 4 in 5 respondents admitted disputes arose within their company over data ingestion and the same number said they’re paying too much for observability solutions even after imposing limitations.

The scope of the problem is reflected in the rate of data estate expansion.

Log data for the average company has expanded by a factor of five in the last three years, the report found. More than one-third of respondents said their company generates up to 1TB of data daily. An additional 37% generate more than 1TB each day.

As mining tools improved, sources proliferated and cloud unlocked a practically bottomless well of storage, enterprises turned to observability solutions and FinOps practices to rationalize usage and reduce cost.

“The area that businesses were most focused was on how to drive more value from data.” Naveen Zutshi, CIO at data software company Databricks, told CIO Dive earlier this year. “Now, they are struggling with operational complexity.”

Data analysts, data engineers and data scientists each use discrete tools and different production pathways, Zutshi said, which can lead to a disconnected data ecosystem. Tagging by function ties ownership to workgroups and gives IT leaders more clarity into spending, he said.

While greater visibility into data operations helps organizations determine who’s using what and how much it costs, observability solutions bring additional headaches. More than 9 in 10 respondents said their leadership team is concerned about rising observability costs and anticipates greater spending scrutiny by their organization over the next year.

Ultimately, solutions require investments, too, and more than 4 in 5 respondents said ROI on observability platforms has not kept pace with spending.

IT asset managers are shifting their attention from data center and desktop software to cloud-based SaaS solutions, according to Flexera’s State of ITAM report, released Tuesday.

Nearly three-quarters of IT professionals responsible for enterprise software use and compliance expect increased scrutiny of SaaS solutions in the next three years, the software company’s survey of 500 IT asset managers found. More than two-thirds are eying public cloud as a source of software spending waste, the report found.

As companies push to optimize IT investments, curbing waste remains a problem. Roughly one-third of enterprise spend across desktop, data center, SaaS and “as a Service” infrastructure is wasted, respondents estimated.

Unnecessary, redundant and uncatalogued tech assets are the bane of enterprise budget hawks. As organizations migrate workloads out of on-prem data centers, tracking down sources of overspending is leading IT asset managers to cloud.

Identifying overlapping software and finding ways to squeeze more out of license use rights were priorities for 2 in 5 respondents.

While tracking on-prem software usage remained the most common responsibility of asset management teams, cited by 7 in 10 respondents, the proliferation of cloud services is driving a realignment in priorities.

Teams are moving rapidly to reign in cloud-based software bloat. Nearly half of respondents expressed concerns about containerized applications deployed in hybrid ecosystems, up from just 28% in last year’s survey. The number of respondents focused on cloud-based software grew by 10 percentage points year over year, to 52%.

The move is a practical and predictable response to an industrywide shift to SaaS and a broad drive to optimize cloud spend, a trend mirrored by changes in organizational accountability structures.

Most of the organizations surveyed — nearly 3 in 5 — have established a central cloud management team. Including an asset management professional on the cloud team has become the norm, according to Flexera.

As cloud cost control strategies are standardized under the banner of FinOps, asset managers are taking note. One-quarter of asset management teams already report interacting heavily with FinOps teams, a category that was new to this year’s survey.

Despite concerns over data governance and privacy, more than two-thirds of executives say the benefits of implementing generative AI outweigh the potential risks, according to a Gartner report published Wednesday. 

Seven in 10 executives say their companies are investigating or exploring generative AI, while 19% have advanced pilots or are in production. The firm surveyed more than 2,500 executives during a webinar series in March and April.

While the cost-cutting and efficiency upsides to generative AI have made headlines, the top driver for enterprise adoption is customer experience, according to 38% of respondents. Just 17% are deploying the technology focused on cost optimization. 

Providers of core technology services have quickly responded with new features and services as enterprise demand for generative AI increases. 

The three major hyperscale cloud providers — led by Microsoft, an early adopter of the technology thanks to its investment in OpenAI — have each launched features to accelerate the delivery and support of generative AI capabilities.

And though economic concerns persist, cost optimization was not among the top drivers of generative AI adoption, according to the survey.

CEOs and shareholders aren't solely focused on the cost line, said Frances Karamouzis, distinguished VP analyst at Gartner. They're looking for growth opportunities, "on creating new customers, new products, new services," she said.

Risk remains top of mind for some leaders, especially those in highly-regulated business verticals.

Despite broad exploration, a small number of executives — 5% — believe risks still outweigh the potential benefits, according to the Gartner survey. 

Potential risks to consider include security, liability and customer protection, as well as reputational loss. Additionally, leaders contend with ethical, social and labor issues as they weigh the merits of generative AI.

But a low barrier of entry to generative AI services encouraged low-stakes experimental projects according to Karamouzis. The challenge is to prioritize and vet potential use cases, with risk tolerance in mind.

Projects picked for development should be specific to the enterprise and sector, said Karamouzis. Enterprise leaders should take a portfolio-based approach, where they can carry out concurrent projects rather than a single initiative according to their appetite for risk.

Seven in 10 executives believe generative AI in the enterprise could introduce new security exposure to company data, according to a Salesforce survey. Some industry leaders even expect threat actors could weaponize ChatGPT to carry out cyberattacks.