IT Foresight

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Large-scale IT programs typically begin with business and IT teams agreeing to strict standards in order to contain complexity. But this approach can lead to several problems: In time, business units demand that the system include specific requirements reflecting how they operate, and users ask for functions tailored to how they like to work, driving a program off-standard. The ensuing complexity slows the project down, increases its costs, and promises even greater maintenance and upgrade challenges in the future. The only way to avoid this drift is to limit such customizations. This Strategy& report offers a pragmatic framework for analyzing each customization’s contribution to the core capabilities that truly differentiate a company’s products and services from its market competitors.

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Despite the increased pervasiveness of technology across virtually all industries, many companies still use an outdated approach that relegates IT infrastructure to a back-office function with little communication or coordination with business units. Given that infrastructure comprises roughly half of all technology spending, such an approach results in large ineffciencies. By contrast, a “fit-for-purpose” infrastructure strategy aligns IT infrastructure proportionally with the relative importance of the business line, product, or service that it supports. Critical units receive greater infrastructure spending and higher service levels, and noncritical units receive less. This strategy gives business and IT leaders a better view of priorities so they can collaborate more effectively to execute the company’s overall strategy.

In last issue - Part II of our special digital edition

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From retailers, to banks, to transport providers, companies depend on telecommunications networks to provide end customers with compelling online and mobile experiences designed to capture their interest and keep them coming back. Yet the industry’s own efforts to transform the way it interacts with retail customers to market, sell, and support its products and services, have lagged. It’s time for that to change: Operators must offer an integrated, omnichannel user experience — on the desktop, on mobile devices, on the phone, and in stores — providing access to a portfolio of new products and services designed to match the requirements of each customer. Success will require designing a strategy for creating the digital experiences that customers will expect three years from now, not today.
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Urbanization is one of the most important demographic forces affecting municipal governments, and it will remain so for the foreseeable future. Some 70 percent of the world’s population will live in cities by 2050. As a result, governments will have to provide services for more people, while also encouraging economic growth and implementing sustainable environmental practices. Through the creation of “digital cities,” municipalities can begin to use digitization to address these challenges, with advanced infrastructure and solutions to deliver better city services that meet the needs of residents.
Big data is driving gains for retailers that know how to use it. Established store chains that have long seen information technology as an operational support function, rather than a source of competitive advantage are being left behind. Customers today want more choices in pricing, products, and fulfillment than old-line retailers have ever provided, along with a seamless shopping experience across online, mobile, and physical sales channels. But traditional retailers still have an opportunity to reverse course if they substantially overhaul their retail IT organizations, both technologically and culturally. IT must expand its focus from back-end operations to the entire enterprise, and create end-to-end solutions that link every function in a digitally optimized business model.