Posts Tagged ‘IBM Institute of Business Value’

Dinosaurs Strike Back in IBM Business Value Survey

March 2, 2018

IBM’s Institute of Business Value (IBV) recently completed a massive study based 12,000 interviews of executives of legacy c-suite companies. Not just CEO and CIO but COO, CFO, CMO, and more, including the CHO. The CHO is the Chief Happiness Officer. Not sure what a CHO actually does but if one had been around when DancingDinosaur was looking for a corporate job he might have stayed on the corporate track instead of pursuing the independent analyst/writer dream.

(unattributed IBM graphic)

IBV actually referred to the study as “Incumbents strike back.” The incumbents being the legacy businesses the c-suite members represent. In a previous c-suite IBV study two years ago, the respondents expressed concern about being overwhelmed and overrun by new upstart companies, the born-on-the-web newcomers. In many ways the execs at that time felt they were under attack.

Spurred by fear, the execs in many cases turned to a new strategy that takes advantage of what has always been their source of strength although they often lacked the ways and means to take advantage of that strength; the huge amounts of data they have gathered and stored, for decades in some cases. With new cognitive systems now able to extract and analyze this legacy data and combine it with new data, they could actually beat some of the upstarts. Finally, they could respond like nimble, agile operations, not the lumbering dinosaurs as they were often portrayed.

“Incumbents have become smarter about leveraging valuable data, honing their employees’ skills, and in some cases, acquired possible disruptors to compete in today’s digital age,” the study finds, according to CIO Magazine, which published excerpts from the study here. The report reveals 72 percent of surveyed CxOs claimed the next wave of disruptive innovation will be led by the incumbents who pose a significant competitive threat to new entrants and digital players. By comparison, the survey found only 22 percent of respondents believe smaller companies and start-ups are leading disruptive change. This presents a dramatic reversal from a similar but smaller IBV survey two years ago.

Making possible this reversal is not only growing awareness among c-level execs of the value of their organizations’ data and the need to use it to counter the upstarts, but new technologies, approaches like DevOps, easier-to-use dev tools, the increasing adoption of Linux, and mainframes like the z13, z14, and LinuxONE, which have been optimized for hybrid and cloud computing.  Also driving this is the emergence of platform options as a business strategy.

The platform option may be the most interesting decision right now. To paraphrase Hamlet, to be (a platform for your industry) or not to be. That indeed is a question many legacy businesses will need to confront. When you look at platform business models, what is right for your organization. Will you create a platform for your industry or piggyback on another company’s platform? To decide you need to first understand the dynamics of building and operating a platform.

The IBV survey team explored that question and found the respondents pretty evenly divided with 54% reporting they won’t while the rest expect to build and operate a platform. This is not a question that you can ruminate over endlessly like Hamlet.  The advantage goes to those who can get there first in their industry segment. Noted IBV, only a few will survive in any one industry segment. It may come down to how finely you can segment the market for your platform and still maintain a distinct advantage. As CIO reported, the IBV survey found 57 percent of disruptive organizations are adopting a platform business model.

Also rising in importance is the people-talent-skills issue. C-level execs have always given lip service to the importance of people as in the cliché people are our greatest asset.  Based on the latest survey, it turns out skills are necessary but not sufficient. Skills must be accompanied by the right culture. As the survey found:  Companies that have the right culture in place are more successful. In that case, the skills are just an added adrenalin shot. Still the execs put people skills in top three. The IBV analysts conclude: People and talent is coming back. Guess we’re not all going to be replaced soon with AI or cognitive computing, at least not yet.

DancingDinosaur is Alan Radding, a veteran information technology analyst, writer, and ghost-writer. Follow DancingDinosaur on Twitter, @mainframeblog. See more of his work at technologywriter.com and here.

Put your z System at the Center of Blockchain

October 6, 2016

The zSystem has been a leading platform for the world’s top banks for decades and with blockchain the z could capture even more banking and financial services data centers. Two recent IBM Institute for Business Value (IBV) studies show commercial blockchain solutions are rapidly being adopted throughout banking and financial markets dramatically faster than initially expected, according to an IBM announcement late in Sept.  Of course, not every blockchain deployment runs on z but more should be.

blockchainexplained-willian-mougayer

Copyright William Mougayer

According to an IBV study, more than 70 percent of early adopters are prioritizing blockchain efforts in order to break down current barriers to creating new business models and reaching new markets. IBV analyst report the respondents are better positioned to defend themselves against competitors, including those untraditional disruptors like non-bank startups. The majority of respondents are focusing their blockchain efforts on four areas: clearing and settlement, wholesale payments, equity and debt issuance, and reference data.

But blockchain isn’t just a financial services story. Mougayer identifies government services, healthcare, energy, supply chains, and world trade as blockchain candidates. IoT will also be an important area for blockchain, according to a new book on IoT by Maciej Kranz, an IoT pioneer.

As Kranz explains: blockchain has emerged as a technology that allows a secure exchange of value between entities in a distributed fashion. The technology first appeared on most IT radar screens a few years ago in the form of Bitcoin, a virtual currency that relies on blockchain technology to ensure its security and integrity. Although Bitcoin’s future is still uncertain, blockchain is a completely different story.

Blockchain is attracting considerable attention for its ability to ensure the integrity of transactions over the network between any entities. Automobile companies are considering the technology to authenticate connected vehicles in the vehicle-to-vehicle (V2V) environment, notes Kranz. Still others are looking at blockchain to trace the sources of goods, increase food safety, create smart contracts, perform audits, and do much more. Blockchain also provides a natural complement to IoT security in a wide variety of use cases.

The z and especially the newest generation of z Systems is ideal for blockchain work. Zero downtime, industry-leading security, massive I/O, flexibility, high performance at scale, and competitive price/performance along with its current presence in the middle of most transactions, especially financial transactions, makes z a natural for blockchain.

A key driver for blockchain, especially in the banking and financial services segment is the Linux Foundation’s HyperLedger project. This entails a collaborative, open source effort to establish an open blockchain platform that will satisfy a variety of use cases across multiple industries to streamline business processes. Through a cross-industry, open standard for distributed ledgers, virtually any digital exchange of value, such as real estate contracts, energy trades, even marriage licenses can securely and cost-effectively be tracked and traded.

According to Linux Foundation documents, “the Hyperledger Project has ramped up incredibly fast, a testament to how much pent-up interest, potential, and enterprise demand there is for a cross-industry open standard for distributed ledgers.” Linux Foundation members of the Hyperledger Project are moving blockchain technology forward at remarkable speed. IBM has been an early and sizeable contributor of code to the project. It contributed 44,000 lines of code as a founding member.

That it is catching on so quickly in the banking and financial services sector shouldn’t be a surprise either.  What blockchain enables is highly secure and unalterable distributed transaction tracking at every stage of the transaction.  Said Likhit Wagle, Global Industry General Manager, IBM Banking and Financial Markets, when ticking off blockchain advantages: To start, first movers are setting business standards and creating new models that will be used by future adopters of blockchain technology. We’re also finding that these early adopters are better able to anticipate disruption and fight off new competitors along the way.

It is the larger banks leading the charge to embrace blockchain technology with early adopters twice as likely to be large institutions with more than a hundred thousand employees. Additionally, 77 percent of these larger banks are retail banking organizations.

As the IBV surveys found, trailblazers expect the benefits from blockchain technology to impact several business areas, including reference data (83 percent), retail payments (80 percent) and consumer lending (79 percent). When asked which blockchain-based new business models could emerge, 80 percent of banks surveyed identified trade finance, corporate lending, and reference data as having the greatest potential.

IBM is making it easy to tap blockchain by making it available through Docker containers, as a signed and certified distribution of IBM’s code submission to Hyperledger, and through Bluemix services. As noted above, blockchain is a natural fit for the z and LinuxOne. To that end, Bluemix Blockchain Services and a fully integrated DevOps Tool is System z- and IoT-enabled.

DancingDinosaur is Alan Radding, a veteran information technology analyst, writer, and ghostwriter. Please follow DancingDinosaur on Twitter, @mainframeblog. See more of his IT writing at technologywriter.com and here.

 


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