Of all the burning questions that keep tech execs awake at night, perhaps none is more urgent than, "Are we keeping up?" The breakneck pace of change in IT and in business at large means that CIOs and other senior technologists can't afford to lose focus as they head into 2016.
Where should you center your efforts as you build your to-do list for the year ahead? Computerworld's Forecast 2016 survey of IT professionals points to five key areas -- cloud computing, security, the Internet of Things, analytics, and the emergence of IT as a change agent -- as well as one area where you don't need to devote resources (or not yet, anyway).
Here's a rundown of survey findings related to each of those topics, plus a look at one trendy technology that gets a lot of buzz but is isn't likely to affect enterprise IT in the near future. Once you're up to speed, strap in and hold on tight -- here comes 2016.
1. IT as a change agent
IT may finally move fully to the center of the business in 2016, as digital transformation becomes a top strategic priority. CIOs and their tech organizations are well positioned to drive that change, thanks to IT budget growth, head count increases and a pronounced shift toward strategic spending.
"As technology becomes an integral part of every aspect of business and the way we interact with customers, it's raising the profile of the IT group and forcing IT to think about more than just keeping the lights on," says David Cearley, a fellow at Gartner. "We are seeing greater alignment as IT steps up to drive digital business."
Nearly half (46%) of the 182 respondents to the Forecast survey said that they're gearing up for greater technology spending, with anticipated budget increases averaging 14.7%. (Those numbers are up from last year, when 43% of those polled said they anticipated spending increases, and the average expected uptick was 13.1%.)
At the same time, 37% of this year's respondents said they're planning to increase IT head count, up from 24% last year. Tellingly, 42% of those with hiring plans are in search of people with combined tech and business backgrounds that will allow them to articulate the value of IT in meeting business goals.
Blended expertise will be critical in order for IT to achieve its primary objectives in 2016: 19% of our survey respondents said their mission is to generate new revenue streams or increase existing ones over the next 12 months. Also on the list: accelerating business process and agility (cited by 40% of those polled) and improving collaboration with business units (35%).
While IT has made great strides in moving to the strategic center of the enterprise, there is more work to be done -- most of it focused on building relationships with business stakeholders, says Ted Maulucci, CIO of Tridel, a commercial real estate developer in Toronto.
Maulucci is actively working on his own relationship-building skills by taking university-level courses in psychology and spending plenty of time talking to business users in the field. "When you are trying to lead transformation and adoption, the most important thing is getting people to take action," he says. "It's a must-have skill for CIOs in today's world."
2. Cloud computing
As organizations build out a future-proof IT infrastructure, there's little question that the cloud will play a pivotal role -- the real challenge lies with figuring out which cloud computing model is the best fit for a particular company.
Nearly half (48%) of the respondents to our Forecast 2016 survey indicated that cloud computing was an area earmarked for a spending increase in their organizations, and 14% cited cloud initiatives as the single most important technology project on their dockets for the upcoming year. Some 29% confirmed they had already moved some enterprise applications to the cloud, with more to come, while 7% said they're in the process of migrating mission-critical systems to a cloud environment.
Moreover, 22% of the respondents said their organizations are currently conducting beta tests or pilot programs that encompass the full stack of cloud delivery methods -- including private, public and hybrid options.
Now that the cloud is a standard element of IT architectures, the question facing CIOs is not whether to use cloud-based systems but which implementation model is best for their organizations, according to Gartner's Cearley. "Some things will be delivered in a private cloud model while others will leverage external cloud services, and there will be new types of delivery models," he says.
For Michelman Inc., a privately held manufacturer of advanced materials for industrial applications, the cloud represents an opportunity to grow, says Stephen Hahn, global IT leader for the $225 million family-owned business, headquartered in Cincinnati.
In particular, Hahn is using platform-as-a-service applications for disaster recovery, customer relationship management and other tasks, in addition to using software-as-a-service (SaaS) offerings such as Microsoft Office 365. "If I try to address all the holes I've got [with] services on premises, I won't be able to drive the change needed to support growth," he says. "The cloud lets me respond more rapidly to business demands while reducing risk."
High-profile data breaches made for frequent attention-getting headlines in 2015, ratcheting up anxiety and keeping security at the top of IT budgets for the third year in a row.
Exactly half of this year's survey respondents (up from 46% last year) said they will increase spending on security in 2016, making security the No. 1 choice among tech initiatives pegged for spending hikes. When survey participants were asked to identify the single most important technology project currently underway at their organizations, security came in second (chosen by 12% of those polled), trailing cloud computing by just two percentage points. And 16% of those surveyed identified security as their top leadership challenge in the upcoming year, second only to budgetary and economic pressures.
At Nova Southeastern University in Fort Lauderdale, Fla., security and HIPAA compliance are CIO Tom West's biggest concerns. "In the world we live in today, we can get attacked on a daily basis, so the No. 1 thing for me is to make sure we are compliant and secure," he says.
That's no easy task, given the constantly changing IT landscape. Nova Southeastern's security initiatives run the gamut: The school has invested in new intrusion detection/prevention, endpoint protection and encryption products; it employs application and Web vulnerability scanning tools to reduce the "attack surface" of its applications; it conducts regular audits as part of a risk management program; and it recently hired a dedicated chief information security officer.
In addition to ensuring that Nova Southeastern is in compliance with HIPAA when it comes to handling healthcare information, West says there are several other regulations and standards that he has to abide by, including the Family Educational Rights and Privacy Act, the Payment Card Industry Data Security Standard and the IEEE's FIPA standards for agent-based technologies.
In short, he says, "we need to remain constantly vigilant for new types of attacks from the outside as well as from rogue insiders."
4. The Internet of Things
The so-called Internet of Things (IoT) is no longer the stuff of science fiction, but rather a near-future reality for IT organizations across many industries. IoT technologies can be deployed for all kinds of practical uses, such as optimizing supply chains via RFID and monitoring system performance with an eye toward saving energy.
In the Computerworld Forecast 2016 survey, 29% of the respondents identified IoT initiatives — and related machine-to-machine and telematics projects -- as new areas of spending for the year ahead. In comparison, just 12% of those polled last year said IoT work would be a new IT expenditure in 2015. Likewise, the percentage of respondents who said they planned to launch IoT projects over the next 12 months rose from 15% last year to 21% this year. Additionally, 14% of this year's respondents said they plan to beta-test IoT technologies, up from 7% last year.
In Toronto, Tridel is on the front lines of smart building construction and is actively using IoT technologies in its senior citizen communities and condominium properties. The real estate development company is designing buildings from the ground up with technologies like commercial-grade IP networks, digital IP cameras and pervasive Wi-Fi. The technology supports an array of amenities, such as health monitoring systems and personal emergency response services in its senior residences, and high-end concierge services in its condominium properties.
"IoT is huge for us," says Maulucci. "The media tends to overblow stuff, but this time, I don't mind it with IoT. Using portals, networks, sensors and devices, we can build facilities that foster collaboration and are located where people want to live."
The business world's fixation with big data -- specifically with the quest to unearth nuggets of insight — shows no sign of abating.
As companies pivot toward digital business, significant spending on analytics will continue, according to Gartner's Cearley. Business analytics was No. 5 on the list of survey respondents' most important IT projects, and it was No. 3 on the list of technologies that would garner increased spending in the next 12 months.
Having organized all of their data, companies are now figuring out how to use it more effectively. At the same time, analytic capabilities are increasingly being embedded into everyday applications and workflows rather than only being available in separate tools, Cearley says. "Analytics are also rapidly bleeding into the whole area of machine learning, artificial intelligence and pattern recognition," he says, explaining that "analytics can help discern patterns that are not clear to human beings."
PrimeLending, a Dallas-based mortgage company, is expanding its analytics initiatives -- an effort that includes building a data warehouse -- to get better operational visibility and insights into customer behavior. "We are mostly using analytics for competitive intelligence," says Tim Elkins, executive vice president and CIO. "We need to figure out if a consumer we've been doing business with is getting credit-pooled by someone else, or why we lost a loan. As we explore different business models, we have to do a better job with analytics."
Wearables can wait
Answering the question "Are we keeping up?" may require IT leaders to take stock of their companies' efforts in a number of technology realms, but wearables isn't one of them.
While products like Google Glass and the Apple Watch did launch to great fanfare, the reality is that enterprises aren't ready to make practical use of wearable systems, at least for the foreseeable future.
Wearable technology was last on the Computerworld Forecast 2016 list of systems currently being assessed in beta tests and pilot projects, with only 4% of our respondents saying they had projects underway involving wearables. Furthermore, 78% said they were not currently working on wearable apps or anticipating the need to support wearables in the near future. And only 8% of those polled said wearables would play a role in their business or technology operations, while just 12% indicated that they were adjusting their mobile device management strategies to include wearables.
But things may change. West says he's not particularly interested in or concerned about wearables, but he recognizes that the students at Nova Southeastern University inevitably will be. "Eighty percent of our users are students, many at the graduate and doctoral level," he says, "and they're always bringing in new technology and new ideas, which makes for more challenges for me."