AI PC will be the only choice of laptop available to large businesses by 2026, given its prowess to process large volumes of data within a short time.
Tesla Cuts More Than 10% Of Its Workforce
Tesla is slashing more than 10% of its global workforce, as it grapples with falling sales and an intensifying price war for electric vehicles (EVs), plus reputational damage from crashes.
The China Exodus: Survey Shows Sourcing, Manufacturing Moving Out
A Gartner Inc. survey of 260 global supply chain leaders in February and March 2020 found that 33 percent had moved sourcing and manufacturing activities out of China or plan to do so in the next two to three years. Survey results show that the COVID-19 pandemic is only one of several disruptions that have put global supply chains under pressure.
“Global supply chains were being disrupted long before COVID-19 emerged,” said Kamala Raman, senior director analyst with the Gartner Supply Chain Practice. “Already in 2018 and 2019, the U.S.-China trade war made supply chain leaders aware of the weaknesses of their globalized supply chains and question the logic of heavily outsourced, concentrated and interdependent networks. As a result, a new focus on network resilience and the idea of more regional manufacturing emerged. But this kind of change comes with a price tag.”
READ: Impact of COVID-19 On The Automotive Manufacturing Supply Chain
READ: Coronavirus Outbreak Reveals the Weakest Links In The Supply Chain
Tariff Costs are the Primary Reason to Move Supply Chains
For decades, China has been the go-to destination for high-quality, low-cost manufacturing, and it has established itself as a key source of supply for almost all major industries including retail and pharmaceutical. However, Gartner research showed that the margin between those companies planning to add jobs in China versus taking them away narrowed sharply in 2019. The primary reason is the increase in tariff costs.
“We have found that tariffs imposed by the U.S. and Chinese governments during the past years have increased supply chain costs by up to 10 percent for more than 40 percent of organizations. For just over one-quarter of respondents, the impact has been even higher,” Raman said. “Popular alternative locations are Vietnam, India, and Mexico.
The second main reason for moving sourcing and manufacturing out of China is that supply chain leaders want to make their networks more resilient.”
READ: Trade War Pushes Apple’s Manufacturing From China To Vietnam
READ: Taiwanese Companies Shift Production To Taoyuan As Trade War Heats Up
Balancing Efficiency and Resilience
Only 21 percent of survey respondents believe that they have a highly resilient network today—meaning that they have good visibility and the agility to shift sourcing, manufacturing and distribution activities around quickly. However, 55 percent expect to have a highly resilient network in the next two to three years—a reaction to disruptions such as Brexit, the trade war and COVID-19.
However, resilience has a price. Fifty-eight percent of respondents agree that more resilience also results in additional structural costs to the network.
“We are at a crossroads in the evaluation of global supply chains that pits just-in-time systems designed to improve operational efficiency against just-in-case plans that emphasize planning and preparing for a range of plausible scenarios,” Raman added. “To find balance, supply chain leaders must engage in risk management to assess their organization’s willingness to take risk onboard and decide how to quantify that risk against other network objectives such as cost effectiveness.”
Moving Closer to the Customer
One-quarter of survey respondents stated that they have already regionalised or localised manufacturing to be closer to demand. Despite the cost of adding more players to the ecosystem and increasing the overall network complexity, regional supply chains can ease delays and shortages in times of disruption—if the model is economically viable.
“Many Western organizations will have to explore new forms of automation on the factory floor to decrease the costs of near- or onshore production. Some also favour a partial option, such as manufacturing in Asia and moving only the final assembly closer to the customer,” Raman concluded.
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Future Of IT Infrastructure Is Always On, Always Available, Everywhere
As more organisations embrace digital business, infrastructure and operations (I&O) leaders will need to evolve their strategies and skills to provide an agile infrastructure for their business. In fact, Gartner, Inc. said that 75 percent of I&O leaders are not prepared with the skills, behaviours or cultural presence needed over the next two to three years. These leaders will need to embrace emerging trends in edge computing, artificial intelligence (AI) and the ever-changing cloud marketplace, which will enable global reach, solve business issues and ensure the flexibility to enter new markets quickly, anywhere, anytime.
IT departments no longer just keep the lights on, but are also strategic deliverers of services, whether sourced internally or external to the organisation. They must position specific workloads based on business, regulatory and geopolitical impacts. As organisations’ customers and suppliers grow to span the globe, I&O leaders must deliver on the idea that “infrastructure is everywhere” and consider the following four factors:
Agility Thrives On Diversity
Bob Gill, Vice President at Gartner, said the days of IT controlling everything are over. As options in technologies, partners and solutions rise, I&O leaders lose visibility, surety and control over their operations. “The cyclical, dictated factory approach in traditional IT cannot provide the agility required by today’s business,” Mr. Gill said. “The need for agility evolved faster than our ability to deliver.”
Despite agility placing among their top three priorities for 2019, I&O leaders are faced with conundrum as a diverse range of products is available to them. “The ideal situation for I&O leaders would be to coordinate the unmanageable collection of options we face today — colocation, multicloud, platform as a service (PaaS) — and get ahead of the business needs tomorrow. We must reach into our digital toolbox of possibilities and apply it to customer intimacy, product leadership and operational excellence to establish guardrails around managing the diversity of options in the long term,” Mr. Gill said.
The need for agility will only increase, so the two key tasks of I&O leaders will be to manage the sprawl of diversity in the short term and become the product manager of services needed to build business driven, agile solutions in the long term. “I&O has the governance, security and experience to lead this new charge for the business,” Mr. Gill said.
Applications Enable Change
Infrastructure can save money and enable applications, but by itself, it does not drive direct business value — applications do. Dennis Smith, Vice President at Gartner, said that there is no better time to be an application developer. “Application development offers an opportunity to jump on the express train of change to satisfy customer needs and build solutions composed of a tapestry of software components enabled through APIs,” Mr. Smith said.
Gartner research found that by 2025, 70 percent of organizations not adopting a service/product orientation will be unable to support their business, so I&O engineers must engage with consumers and software developers; integrate people, processes and technology; and deliver services and products all to support a solid infrastructure on which applications reside.
Boundaries Are Shifting
Digital business blurs the lines between the physical and the digital, leveraging new interactions and more real-time business moments. As more things become connected, the data center will no longer be the center of data. “Digital business, IoT and immersive experiences will push more and more processing to the edge,” said Tom Bittman, distinguished Vice President at Gartner.
By 2022, more than half of enterprises-generated data will be created and processed outside of data centers, and outside of cloud. Immersive technologies will help to light a fire of cultural and generational shift. People will expect more of their interactions to be immersive and real time, with fewer artificial boundaries between people and the digital world.
The need for low latency, the cost of bandwidth, privacy and regulatory changes as data becomes more intimate, and the requirement for autonomy when the internet connection goes down, are factors that will expand the boundary of enterprise infrastructures all the way to the edge.
People Are the Cornerstone
I&O leaders are struggling to deliver value faster in a complex, evolving environment, hindering the ability of organisations to learn quickly and share knowledge.
“The new I&O worker profile will embrace versatile skills and experiences rather than reward a narrow focus on one technical specialty,” said Kris van Riper, managing vice president at Gartner. “Leading companies are changing the way that they reward and develop employees to move away from rigid siloed career ladders toward more dynamic career diamonds. These new career paths may involve experiences and rotations across multiple technology domains and business units over time. Acquiring a broader understanding of the IT portfolio and business context will bring collective intelligence and thought diversity to prepare teams for the demands of digital business.”
Ultimately, preparing for I&O in the digital age comes down to encouraging different behaviors. Building competencies such as adaptability, business acumen, fusion collaboration and stakeholder partnership will allow I&O teams to better prepare for upcoming change and disruption.
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Gartner Identifies Top 10 IoT Trends For Next 5 Years
Gartner has revealed the top strategic Internet of Things (IoT) technology trends that will drive digital business innovation from 2018 through 2023.
“The IoT will continue to deliver new opportunities for digital business innovation for the next decade, many of which will be enabled by new or improved technologies,” said Nick Jones, Research Vice President at Gartner. “CIOs who master innovative IoT trends have the opportunity to lead digital innovation in their business.”
In addition, CIOs should ensure they have the necessary skills and partners to support key emerging IoT trends and technologies, as, by 2023, the average CIO will be responsible for more than three times as many endpoints as this year.
The shortlist of the 10 most strategic IoT technologies and trends that will enable new revenue streams and business models, as well as new experiences and relationships are as shown below:
Trend No. 1: Artificial Intelligence (AI)
Gartner forecasts that 14.2 billion connected things will be in use in 2019, and that the total will reach 25 billion by 2021, producing immense volume of data. “Data is the fuel that powers the IoT and the organization’s ability to derive meaning from it will define their long term success,” said Mr. Jones. “AI will be applied to a wide range of IoT information, including video, still images, speech, network traffic activity and sensor data.”
The technology landscape for AI is complex and will remain so through 2023, with many IT vendors investing heavily in AI, variants of AI coexisting, and new AI-based tolls and services emerging. Despite this complexity, it will be possible to achieve good results with AI in a wide range of IoT situations. As a result, CIOs must build an organisation with the tools and skills to exploit AI in their IoT strategy.
Trend No. 2: Social, Legal And Ethical IoT
As the IoT matures and becomes more widely deployed, a wide range of social, legal and ethical issues will grow in importance. These include ownership of data and the deductions made from it; algorithmic bias; privacy; and compliance with regulations such as the General Data Protection Regulation (GDPR).
“Successful deployment of an IoT solution demands that it’s not just technically effective but also socially acceptable,” said Mr. Jones. “CIOs must, therefore, educate themselves and their staff in this area, and consider forming groups, such as ethics councils, to review corporate strategy. CIOs should also consider having key algorithms and AI systems reviewed by external consultancies to identify potential bias.”
Trend No. 3: Infonomics And Data Broking
Last year’s Gartner survey of IoT projects showed 35 percent of respondents were selling or planning to sell data collected by their products and services. The theory of infonomics takes this monetisation of data further by seeing it as a strategic business asset to be recorded in the company accounts. By 2023, the buying and selling of IoT data will become an essential part of many IoT systems. CIOs must educate their organisations on the risks and opportunities related to data broking in order to set the IT policies required in this area and to advise other parts of the organisation.
Trend No. 4: The Shift From Intelligent Edge To Intelligent Mesh
The shift from centralised and cloud to edge architectures is well under way in the IoT space. However, this is not the end point because the neat set of layers associated with edge architecture will evolve to a more unstructured architecture comprising of a wide range of “things” and services connected in a dynamic mesh. These mesh architectures will enable more flexible, intelligent and responsive IoT systems — although often at the cost of additional complexities. CIOs must prepare for mesh architectures’ impact on IT infrastructure, skills and sourcing.
Trend No. 5: IoT Governance
As the IoT continues to expand, the need for a governance framework that ensures appropriate behaviour in the creation, storage, use and deletion of information related to IoT projects will become increasingly important. Governance ranges from simple technical tasks such as device audits and firmware updates to more complex issues such as the control of devices and the usage of the information they generate. CIOs must take on the role of educating their organisations on governance issues and in some cases invest in staff and technologies to tackle governance.
Trend No. 6: Sensor Innovation
The sensor market will evolve continuously through 2023. New sensors will enable a wider range of situations and events to be detected, current sensors will fall in price to become more affordable or will be packaged in new ways to support new applications, and new algorithms will emerge to deduce more information from current sensor technologies. CIOs should ensure their teams are monitoring sensor innovations to identify those that might assist new opportunities and business innovation.
Trend No. 7: Trusted Hardware And Operating System
Gartner surveys invariably show that security is the most significant area of technical concern for organisations deploying IoT systems. This is because organisations often don’t have control over the source and nature of the software and hardware being utilised in IoT initiatives. “However, by 2023, we expect to see the deployment of hardware and software combinations that together create more trustworthy and secure IoT systems,” said Mr. Jones. “We advise CIOs to collaborate with chief information security officers to ensure the right staff are involved in reviewing any decisions that involve purchasing IoT devices and embedded operating systems.”
Trend No. 8: Novel IoT User Experiences
The IoT user experience (UX) covers a wide range of technologies and design techniques. It will be driven by four factors: new sensors, new algorithms, new experience architectures and context, and socially aware experiences. With an increasing number of interactions occurring with things that don’t have screens and keyboards, organisations’ UX designers will be required to use new technologies and adopt new perspectives if they want to create a superior UX that reduces friction, locks in users, and encourages usage and retention.
Trend No. 9: Silicon Chip Innovation
“Currently, most IoT endpoint devices use conventional processor chips, with low-power ARM architectures being particularly popular. However, traditional instruction sets and memory architectures aren’t well-suited to all the tasks that endpoints need to perform,” said Mr. Jones. “For example, the performance of deep neural networks (DNNs) is often limited by memory bandwidth, rather than processing power.”
By 2023, it’s expected that new special-purpose chips will reduce the power consumption required to run a DNN, enabling new edge architectures and embedded DNN functions in low-power IoT endpoints. This will support new capabilities such as data analytics integrated with sensors, and speech recognition included in low cost battery-powered devices. CIOs are advised to take note of this trend as silicon chips enabling functions such as embedded AI will in turn enable organisations to create highly innovative products and services.
Trend No. 10: New Wireless Networking Technologies For IoT
IoT networking involves balancing a set of competing requirements, such as endpoint cost, power consumption, bandwidth, latency, connection density, operating cost, quality of service, and range. No single networking technology optimises all of these and new IoT networking technologies will provide CIOs with additional choice and flexibility. In particular they should explore 5G, the forthcoming generation of low earth orbit satellites, and backscatter networks.
Gartner clients can learn more in the report “Top Strategic IoT Trends and Technologies Through 2023.”
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2019 Gartner CIO Agenda Survey Reveals That India Is Entering Third IT Era
Digital business is maturing from tentative experiments to large-scale implementation across the economy. CIOs must evolve their thinking to be in tune with a new era of rapid increases at the scale of digital business and Gartner’s annual global survey of CIOs has revealed that the CIO role will remain critical to digital transformation.
The 2019 Gartner CIO Agenda survey gathered data from more than 3,000 CIO respondents in 89 countries and all major industries, representing approximately $15 trillion in revenue/public-sector budget and $284 billion in IT spending. And according to the survey, digital business reached a tipping point this year with 46 percent of Indian CIOs reporting that their organisations have changed their business models or are in the process of changing them.
“What we see here is a milestone in the transition to the third era of IT, the digital era,” said Andy Rowsell-Jones, vice president and distinguished analyst at Gartner. “Initially, CIOs were making a leap from IT-as-a-craft to IT-as-an-industrial-concern. Today, 20 years after we launched the first CIO Agenda survey, digital initiatives, along with growth, are the top priorities for CIOs in 2019. Digital has become mainstream.”
India’s IT Budget Growth Slows Down, But Remains Above the Global Average
The transformation toward digital business is supported by steady IT budget growth. Globally, CIOs expect their IT budgets to grow by 2.9 percent in 2019. This is only slightly less than the 2018 average growth rate of 3 percent. A look at the regional differences shows that the regions are moving closer together, but India still has the lead. Indian IT budgets are expected to grow by 3.9 percent in 2019, which is less than the 7.4 percent growth rate of the previous year. This slowing can be attributed to the larger macroeconomic situation concerning slow economic growth, corporate earnings and market volatility. Overall, Asia/Pacific shows an expected growth of 3.5 percent.
“Indian CIOs should use their financial resources to make 2019 a transformative year for their businesses. Stay active in the transformation discussions and invest time, money and human resources to remove any barriers to change. Organisations that fall behind in digital business now will have to deal with a serious competitive disadvantage in the future,” said Mr. Rowsell-Jones.
Disruptive Technologies Are Breaking Through
Disruptive emerging technologies will play a major role in reshaping business models as they change the economics of all organisations. Gartner asked CIOs and IT leaders which technologies they expect to be game-changers. Among Indian respondents, data and analytics was the most mentioned technology (32 percent), while artificial intelligence (AI) ranked second (30 percent).
With regards to implementation, when asked about their organisation’s plans in terms of following digital technologies and trends, we see an impressive 270 percent increase in AI adoption since 2015 in India. During the same time frame, 3D printing adoption increased by 100 percent and conversational interfaces deployment by 48 percent.
“On the surface this looks revolutionary. However, this bump in adoption may indicate irrational exuberance instead,” said Mr. Rowsell-Jones. “While CIOs can’t afford to ignore this class of technologies, they should retain a sense of proportion. For example, the latest batch of AI tools is yet to go through its Trough of Disillusionment.”
Cybersecurity Becomes an All-Company Issue
According to the survey, 94 percent of Indian CIOs expect cybersecurity threats to worsen. It is therefore necessary to create a secure base for digital business that shields both organisation and clients. The survey indicates that 62 percent of Indian CIOs said cybersecurity is their responsibility. However, on its own, the IT organisation can no longer provide cybersecurity.
The rise of social engineering attacks, such as phishing, requires a broader behavioural change from all employees. However, in only 9 percent of Indian organisations is the board of directors accountable for cybersecurity, rather than the CIO alone. Nevertheless, to improve security against cyberthreats, in all organisations, CIOs are combining measures to harden information-processing assets with efforts to influence the people that use technology.
“Last year, I said that CIOs must start scaling their digital business, and they excelled,” said Mr. Rowsell-Jones. “This year, they have to take it one step further and put their growing digital business on a stable and secure base. Success in the third era of enterprise IT hinges on a sound strategy that combines new, disruptive technologies with a rebalancing of existing investments.”
Gartner clients can learn more in the report “2019 CIO Agenda: Securing a New Foundation for Digital Business.”
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Gartner 2019 CIO Agenda Reveals Scaling Of Digitalisation In APAC
Thirty one percent of CIOs in the Asia Pacific region have evolved their digital initiatives to the scaling stage, up from 19 percent in 2018, according to a survey from Gartner, Inc. This indicates that digital business is maturing throughout the region, from tentative experiments to application at a massive scale. The major driver for scale is the intent to increase customer engagement via digital channels.
Analysts presented the Asia Pacific findings from Gartner’s annual global survey of CIOs during the Gartner Symposium/ITxpo on the Gold Coast. The 2019 Gartner CIO Agenda survey gathered data from more than 3,000 CIO respondents in 89 countries and all major industries — 671 CIOs are from 16 countries within the Asia Pacific region, representing $6.1 trillion in revenue and $73.7 billion in IT spending.
The survey results show that digital business has reached a tipping point. Forty seven percent of Asia Pacific CIOs also reported that their enterprises have already changed their business models or are in the process of changing them. Forty percent report evolving consumer demands are driving their business model change.
“The ability to support greater scale is being invested and developed in three key areas: volume, scope and agility,” said Andy Rowsell-Jones, vice president and distinguished analyst at Gartner. “All areas aim at encouraging consumers to interact with the organisation. Generally speaking, the greater the variety of interactions that are available via digital channels, the more engaged a consumer becomes and the lower the costs to serve them are.”
Mr. Rowsell-Jones recommends that CIOs throughout Asia Pacific evolve their thinking to be in tune with this new era of rapid increases in the scale of digital business.
Steady IT Budgets
The survey results indicate that transformation toward digital business is supported by steady IT budget growth. CIOs globally expect their IT budgets to grow by 2.9 percent in 2019, but Asia Pacific is the leading region with an expected 3.5 percent growth. However, this is a significant cut from the 5.1 percent projected budget increase in 2018.
Boards of directors typically also ask for a set of key performance indicators (KPIs) to measure digital transformation progress. The Gartner survey found that 81 percent of Asia/Pacific CIOs measure the return on investment (ROI) of digital.
“CIOs should use their financial resources to make 2019 a transformative year for their businesses,” said Mr. Rowsell-Jones. “Stay active in transformation discussions and invest time, money and human resources to remove any barriers to change. Enterprises that fall behind in digital business now will have to deal with a serious competitive disadvantage in the future.”
The top five areas that Asia Pacific CIOs will invest new or additional funding in 2019 are: business intelligence and data analytics (42 percent); core system improvements and transformation (33 percent); artificial intelligence (AI) and machine learning (33 percent), cybersecurity and information security (32 percent); and digital business initiatives (30 percent).
AI And Cybersecurity Shape The CIO Technology Agenda
The CIO Agenda survey indicates that disruptive emerging technologies will play a major role in reshaping business models in Asia/Pacific as they change the economics of all organisations. Thirty four percent of CIOs in the region expect AI to be the most disruptive game changer for their organisations in 2019, taking the top spot away from data and analytics, which now occupies second place at 26 percent.
Forty nine percent of Asia Pacific CIOs have already deployed AI technology or deployment is in short-term planning, coming in second behind cybersecurity (86 percent). The top three ways Asia Pacific CIOs are using AI are for chatbots (37 percent), process optimisation (27 percent) and fraud detection (20 percent).
“This rapid shift to AI looks revolutionary on the surface, but this bump in adoption rate may indicate irrational exuberance instead,” said Mr. Rowsell-Jones. “While CIOs can’t afford to ignore this class of technologies, they should retain a sense of proportion. This latest batch of AI tools is yet to go through its Trough of Disillusionment.”
According to Mr. Rowsell-Jones, the strong focus on cybersecurity shows the necessity of creating a secure base for digital business that shields their organisation and clients. The survey indicates that 45 percent of Asia/Pacific CIOs still own the responsibility for cybersecurity. However, the IT organisation alone cannot provide cybersecurity anymore.
The rise of social engineering attacks, such as phishing, require a broader behavioural change of all employees. In 24 percent of the digitally top performing organisations in Asia/Pacific, the boards of directors are accountable for cybersecurity rather than the CIO alone. Nevertheless, CIOs are combining measures to harden information processing assets with efforts to influence the people that use technology to improve security against cyberthreats.
“CIOs in the region excelled at scaling their digital business last year, but they now have to take it one step further and put their growing digital business on a stable and secure base,” said Mr. Rowsell-Jones. “Their success hinges on a sound strategy that combines new, disruptive technologies with a rebalancing of existing investments.”
Gartner clients can learn more in the report “2019 CIO Agenda: Securing a New Foundation for Digital Business.”
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