Digital disruptors demand a new approach to IT

Digital disruptors such as algorithms, artificial intelligence (AI), bots and chatbots are already transforming businesses. Gartner expects that algorithmic business will create even greater levels of disruption and new industries. To support the new capabilities and business models of digital and algorithmic business, CIOs must design and deploy their digital business technology platform.

“Fueled by data, analytics and AI, algorithmic business will continue to grow and disrupt your business,” said Steve Prentice, vice president and Gartner Fellow. “This growth is unabated as algorithms are feasting on the wealth of data that grows inexorably.” More than 500,000 new devices connect to the Internet every hour, and every one of them simply adds to the inevitable growth of data.

Algorithms are moving to the forefront of the differentiation race

Algorithms are taking center stage in the race for competitive differentiation as leading organizations uncover their true value. “Algorithms capture the knowledge that turns raw data into valuable insight, and CIOs must use them to drive speed, scale and consistency in their digital business journey,” said Mr. Prentice. “Applied to huge datasets, algorithms allow highly accurate, personalized offerings, which in turn can drive revenue and differentiation.”

Algorithms are already well established in many industries. In human resources, in order to evaluate candidates’ suitability for specific roles, algorithms are used to match talent very quickly to the work that needs to be done within an organization. Eventually, algorithms will replace both manual processing of CVs by recruiters and automated CV ranking based on word matching.

In other industries, organizations are making advanced algorithmic models available via open marketplaces, which ultimately facilitates access to algorithms that are beyond the development reach of many organizations.

Digital disruptors will dominate in the next few years

In parallel, AI has advanced dramatically during the past year. When enhanced with “machine learning” through the application of capabilities such as deep neural networks, AI is starting to outperform humans in some areas. Algorithms, AI, bots and smart things will dominate business interactions during the next few years: AI and bots currently allow platforms to gain a voice, while algorithms and AI will deliver the intelligence to empower a new generation of robots, cobots and drones and self-driving vehicles. “CEOs must ensure their CIOs are actively engaged in embracing those new business opportunities,” said Mr. Prentice.

Design and deploy your digital business technology platform

The pace of digital disruption demands a new approach to IT. “CIOs must build their digital business technology platform to support the development of digital business,” said Mr. Prentice. “At a minimum, the IT organization needs to be able to design the ‘big picture’ of all the new information and technology capabilities required to support digital business. The CIO can then work with the rest of the organization to define who — if not IT — will build, fund, support and own these major components.

The five major platforms of digital business are as follows:

• Information systems platform, which supports the back office, and operations such as enterprise resource planning and core systems.
• Customer experience platform, which contains the main customer-facing elements, such as customer and citizen portals, multichannel commerce and customer apps.
• Data and analytics platform, which contains information management and analytical capabilities. Data management programs and analytical applications fuel data-driven decision making, and algorithms automate discovery and action.
• Internet of Things (IoT) platform, which connects physical assets for monitoring, optimization, control and monetization. Capabilities include connectivity, analytics and integration to core and operational technology systems.
• Ecosystems platform, which supports the creation of, and connection to, external ecosystems, marketplaces and communities; API management, control and security are its main elements.