These emerging economic clusters have jump-started industries and accelerated economic development in mature and developing markets worldwide.
- Defense News, 4 April 2014
Jeffrey Sorenson, A.T. Kearney partner, explains what “cloud computing” means, the benefits gained from leveraging cloud computing services, and an awareness of the challenges often faced when implementing these services.
Out-of-control IT costs call for a more radical approach, one that considers the big picture.
- Bank Systems &Technology, 27 March 2014
Charging a single person with executing a digital strategy for the future could be a step in the wrong direction.
Today more than ever, technology-driven innovation is contributing to growth. The leading innovators “operationalize” their innovation programs to create lasting success.
Chief information officers (CIOs) understand the importance of IT innovation. Ninety percent of CIOs in our latest study on IT innovation say that technology-driven business innovation is crucial for achieving competitive advantage. They understand that the rewards of IT innovation can be impressive—from the retailer that uses big data to reduce its inventory by $1 billion to the bank startup that employs advanced analytics to succeed in the low-income mortgage market.
Yet on average, just 12 percent of IT budgets are earmarked for innovation (see figure 1). Additionally, only 23 percent of organizations in our study report very positive results from their IT innovation efforts. Why the disconnect? Why do CIOs understand the importance of IT innovation but fail to capitalize on it?
Good CIOs have added strategic value and insight to their roles for some time, and they long ago shifted away from being traditional back-office operations officers. They have unique access and visibility into the front office and unparalleled views about how to drive success across the organization. These insights can clear a path for innovative ideas that bring transformative change and capitalize on the promise of the digital disruption underway.Close
What will it take for IT-BPO companies in India to see their M&A strategies pay off?
India has been the world's dominant destination for information technology (IT) and business process outsourcing (BPO) services. However, as the market matures the industry has experienced a slowdown in growth, pushing IT-BPO providers toward focused M&A strategies to build and sustain growth momentum. Growth through M&A is now a core strategy influenced by the need to:
- Fill gaps in service portfolios or geographic presence, to meet client demands and compete with the global majors; examples include Infosys' acquisition of Lodestone to tap its European customer base, Wipro's acquisition of Opus CMC to tap into its capabilities in high-end mortgage BPO, and Genpact's acquisition of Triumph Engineering to bolster engineering capabilities
- Manage cash reserves more eff ectively to meet shareholders' expectations
- Capture opportunities from client divestitures of services assets; examples include Cognizant's acquisition of ING's and CoreLogic's captives, TCS' and Wipro's acquisition of Citigroup's captives, and Tech Mahindra's acquisition of Hutch BPO
Done well, M&A strategies can help Indian players tap into $2 billion to $4 billion in revenues each year. Yet, about 70 percent of mergers fail to create value, as the consolidated companies receive a one-time revenue uplift but miss powerful opportunities to create revenue synergies. This paper takes a closer look at the Indian IT-BPO industry's M&A track record and explores how to harness the power of consolidation to create more value.Close
View study abstract and view the full report.
Mobile health presents risks and opportunities for pharma and medtech companies.
With chronic disease on the rise in an aging population and advances in medical technology straining the system, Germany’s healthcare system is facing rising costs. Mobile health (m-health) is a technology that will not only help ease this situation for companies in the health industry, but also revolutionize patient care and bring long-term growth. A branch of the e-health market that includes the use of mobile technologies for health services, m-health is applied primarily in the remote monitoring of patients with chronic diseases.
As the Internet becomes ubiquitous through smartphone and tablet use, the hopes for m-health are high. This paper examines the true potential of m-health for various players in the German healthcare system—particularly those in the pharmaceutical and medical technology industries. Among the key questions answered are:
- What is the mobile health promise?
- Why is mobile health still waiting for its big breakthrough?
- How attractive will the mobile health market be for the German health industry in the future?
- How can the pharmaceutical industry profit from the mobile health market and what opportunities does m-health present for the medical technology industry?
With a plan in place, schools can make sure that their investments in digital technology don’t go to waste.
Digitization has rocked the classroom experience and the education system as a whole with a flood of new technologies that promise to change the way teachers teach and students learn. From tablets and e-readers to interactive whiteboards and online learning programs, classroom technology has become a big business. According to the Center for Digital Education, U.S. elementary, middle, and high schools will spend almost $10 billon on technology in 2013, an increase of $4 billion since 2003.
Yet cutting-edge technology is so enticing that it’s easy to get caught up in the moment—acquiring new devices before truly understanding how they apply to the classroom and enhance the learning experience. The truth is, despite many successes, there remains uncertainty about the efficacy of technology in the classroom, and how school systems acquire and implement technology remains a challenge. Without a plan in place, even the best technologies can go to waste.
That’s why today’s schools need a flexible, evergreen process in place that gives students and teachers access to technology while accounting for ever-changing, ever-improving technological advances. This paper examines how those involved in the classroom experience, from administrators to teachers to educational technology firms, can create a structured process for developing a technology strategy and a road map for 21st century learning.Close
Digitization could be a major opportunity for healthcare industry players—if they take the right steps.
Forecasting the future of any industry is difficult, none more so right now than healthcare in the United States. There are countless reasons why healthcare will look different in the near future, not least of which being the country’s movement toward national coverage. However, digital transformation—the cumulative change that comes when digital technologies are introduced wholesale into an established industry—is poised to have an even bigger impact. For the U.S. healthcare industry, digital technology will be transformational, cutting healthcare delivery costs, eliminating errors through improved electronic medical records, and establishing routinized, evidence-based approaches to treatment.Close
Digital forces are pulling at the industry and significantly altering services, products, innovation, delivery, and remuneration (see figure). There are digitally integrated healthcare providers, digital medical devices and technologies, and digital delivery and monitoring of home healthcare. In addition, new ideas are emanating from developing markets, agile competitors are embracing technology, and a digital-friendly federal administration is pushing innovation. And don’t forget the digital consumer who is used to digital banking, digital retailing, and digital education, and expects digital healthcare.
Digital represents a tremendous opportunity—and a significant threat—for the various participants in the U.S. healthcare industry. No one in this industry can afford to fall behind. This paper examines how the healthcare industry can capitalize on digitization.
Today, no company can be sure it is protected from hackers, hacktivists, or cyber warfare.
There is no such thing as absolute security these days. All companies are vulnerable and, it is prudent to assume, already the target of an ongoing, successful attack every second of every day. This is the new paradigm for the world of information security. The upshot is that information security cannot be seen purely as a technological issue but as one that also has an organizational and a strategic dimension.
Information security thus demands the attention of corporate management, with overall responsibility for information security established outside of the IT department. Whether the issue is taken seriously enough is often revealed by the positioning of the chief information security officer (CISO) within a company’s organization. While not usually a member of the board, the CISO or chief security officer should report directly to the board or at most through just one intermediate level. Bottom line: A comprehensively screened system and the right training can make infiltration a lot more difficult, and its detection easier.Close
Digitization has transformed the business world. One engine is driving it: information technology.
Today's companies not only rely on information technology, they can't compete without it. IT is integrated into products, it pulls priceless information from customer data, and it is the force behind online shopping. As digital becomes even more prevalent, the demand for IT will continue to rise, which in turn will place a heavier burden on IT organizations. A new A.T. Kearney study, which surveyed more than 150 chief information officers (CIOs) of large global enterprises and leading midsized companies, reveals that by 2020, two-thirds of companies expect to invest more in IT in all areas along the value chain, but especially in sales and customer interactions. As IT gets a bigger slice of the corporate budget, expectations will rise, and even the smallest miscalculation about IT priorities will put the whole company at risk. This paper discusses tomorrow's IT challenges and offers three strategic goals encompassing 10 golden rules to help CIOs find the balance between increasing IT's value while simultaneously lowering costs.Close
A playbook that makes IT integration faster, better, and future-proof can ensure M&A success.
Information technology plays a crucial role in any M&A. When IT fails in M&A, the repercussions are felt far more deeply than the failure of any other function, not least because IT is the lifeline of nearly every aspect of business operations. Our global merger integration survey found that more than one-third of failed acquisitions are the result of unaddressed IT issues. IT issues can sink a perfectly good acquisition, cause post-deal crises, lead to acquisition aftershocks, and result in missed opportunities to innovate.
We believe a “core competency” approach to IT in a merger or acquisition is required not only to enable a business integration, but also to establish an IT organization fit for the future. Companies can achieve these dual objectives by creating their own IT M&A playbook.
The IT M&A playbook an organization develops must take into account each of these objectives, and it should be tailored to the organization’s specific context. All playbooks must involve IT early, address various acquisition scenarios, incorporate connectors with other business functions, accelerate the process, and live by the lessons learned.
The playbook approach turns integration “from an art to a methodical science.” The playbook allows companies to do it quick, do it right, and keep IT going during and after a merger.
Once the IT M&A playbook is formulated, its success depends on its active deployment and continuous improvement. We recommend several steps to embed the playbook within the organization and exploit its value fully:
- Sustain and improve
- Provide easy access
- Integrate across functions
- Train people
Adam Pressman, A.T. Kearney principal and author of “Engaging Multichannel Consumers,” discusses the importance of aligning with consumers' needs through multi-channel engagement and the critical role CIOs play in this transition.More
With the right systems engineering framework, there is nothing to fear—and much to gain—from agile development.
Need to develop high-quality software quickly and efficiently? Whether you are a CXO or an engineer, the chances are that you are either considering exploring agile software development, or in the process of doing so.
Incremental and iterative, agile development involves breaking down what would have been a large, monolithic project into frequent, time-boxed releases that evolve in line with the end-user's requirements. Initially a small movement in the software community, agile is now becoming a major paradigm for software development. Recent surveys show that about one-third of all development is run with agile methods. The remaining two-thirds apply a "waterfall" development process (13 percent), gated processes other than waterfall (21 percent), or no formal process at all (26 percent). This is true across both large and small projects. Studies of agile implementations consistently show they result in increased focus on value for the customer, shorter time-to-market, lower development costs, and higher quality compared with a conventional software development approach.
But a big challenge remains. Twenty-three percent of agile projects involve teams with more than 200 people, and agile development can be difficult to apply across large projects involving multi-site organizations, complex system interdependencies, and the integration of software and hardware development. Such issues have led large organizations in many industries—aerospace and defense, banking, and telecom, to name a few—to doubt the feasibility of agile implementation.
These challenges, however, can be overcome with the right systems engineering framework in place. When based on well-designed and stable system architectures, large-scale agile development projects will succeed.Close
Big data offers a big advantage for those who learn how to harness it.
Every day, 2.5 quintillion bytes of data are created, with 90 percent of the world’s data created in the past two years alone. Data production will be 44 times greater in 2020 than in 2009. The enormous data influx is straining IT infrastructures. Poor data management can cost up to 35 percent of a business’s operating revenue.
Big data promises to be transformative. As computing resources have evolved, companies stand to reap many more benefits from big data and analytics. Little wonder that big data is a hot topic in corporate boardrooms and IT departments, with many leading firms doing more than talking. According to a recent A.T. Kearney IT innovation study, more than 45 percent of companies have implemented a business-intelligence or big data initiative in the past two years. Further studies estimate more than 90 percent of Fortune 500 companies will have at least one big data initiative underway within a year. The effective use of this tidal wave can deliver substantial top- and bottom-line benefits. Building capabilities in this area will not only improve performance in traditional segments and functions, but also create opportunities to expand product and service offerings.
Yet few organizations have fully grasped what big data is and what it will mean for the future. The greatest rewards will go to those with a clear vision for how it can transform their organization, capabilities, and industry. The hardest part is knowing how to get started. Four questions should be asked at the beginning of this transformation journey:
- Where will big data and analytics create advantage for our company?
- How should we organize to capture the benefits of big data and analytics?
- What technology investments can enable the analytics capabilities?
- How do we get started on the big data journey?
- What business can learn from particle physics
In this companion interview to Big Data and the Creative Destruction of Today's Business Models, Fermilab physicist Rob Roser discusses physics' ties to big data.
Rob Roser has been on the front lines of one of the most exciting periods in the history of physics. In his role at Fermi National Accelerator Laboratory (Fermilab) just outside of Chicago, and as the leader of the Collider Detector at Fermilab (CDF) and technical liaison to Europe’s Organization for Nuclear and Particle Research (CERN), Roser led a team of scientists searching for evidence of the Higgs boson, also known as the “God Particle.” In January 2012, Roser was named the head of Fermilab’s Scientific Computing Division, which provides the facilities, tools, and programming necessary for scientists to conduct their experiments and analyze their findings.
Roser recently sat down with A.T. Kearney’s Christian Hagen, Khalid Khan, and Dan Wall to discuss the challenge of big data, the evolution of scientific computing and technology, and the identification and recruitment of needed talent. The interview accompanies their recently released issue paper, Big Data and the Creative Destruction of Today’s Business Models.Close