Page 11 - EVRY Annual Report 2012

11 Our Business
Challenge No. 1:
There are strong trends driving the need for
new functionality and continuous improve-
ment of existing IT systems
• Social media have become an integral
part of our lives in just a short time. Barack
Obama has 28.5 million followers on
Facebook. Many Norwegian banks are
available through every channel possible,
and over just a short time they have already
attracted many followers on Facebook.
Companies in other sectors are following
this example. Never before have companies
had such a broad range of contacts with
their customers at all times of the day and
night, and never before have customers
been as demanding as they are now. Social
media have quickly become a communi-
cation channel where companies interact
openly with customers, but the need for
consistency with the other ways in which a
company communicates places particular
demands on systems and organisation.
• Making services available from mobile
devices brings with it the expectation that
the services will be as complete and easy to
access as they are from a laptop or PC, and
consumers naturally expect round-the-clock
availability. On top of this, new "gadgets" are
coming into use all the time.
• Demand for functionality and access from
a wide range of devices represents a big
challenge for the bandwidth that networks
can provide, and both capacity and security
need to keep pace with explosive growth in
network traffic.
• All new functionality requires either new sys-
tems or upgrading of existing systems.The
pressure to launch new services makes time-
to-market all the more important, and often
leads to new functionality being provided by
using add-on systems rather than properly
upgrading the existing systems.
The main challenge is that these trends rein-
force each other.The common feature is that
they grow exponentially, and as is well known
Moore's Law predicted a doubling of the capa-
city of CPUs every x years. In reality, this applies
not just to CPUs, but also to everything in IT.
Challenge No. 2:
How should companies deal with an accele-
rating pace of change while at the same time
underpinning their businesses with innovation
and renewal?
Today's businesses need to move forward all
the time, but they have to deal with a legacy of
technology infrastructure that is a product of
the past rather than the future.
Gartner's annual innovation report documents
all the technologies that are currently available
- in all about 1,900 technologies are classified
in different stages of maturity - the so-called
hype cycle.
The challenge that customers and suppliers
are facing is to make the right decisions
about which technology they should invest in.
Choosing the wrong technology that turns out
not be sustainable can be very costly, but on
the other hand standing still at the start line
while technology leaps ahead can also have
fatal consequences. In the future, there will be
more and more technological development,
and the pace of change will be faster than ever.
Gartner's recommendation is worth noting:
The CIO and the IT Department, along with their
external partners, will play an increasingly im-
portant role in corporate use of innovation.The
connection between strategy and innovation
will become ever closer as new technology
is developed.This was also confirmed by a
Norwegian survey on innovation carried out by
Rambøll for which EVRY was the main sponsor:
Rationalization is, and will remain, a key priority.
However, other factors act as both accelerator
and brake: 77% of respondents said that
growth was the main focus.This means that
innovation and customer focus are the major
factors.
Just as every business must master using the
accelerator and brake at the same time, the IT
department must be able to work with inno-
vation and renewal in parallel with improving
efficiency.
Challenge No. 3:
Only one quarter of IT budgets are available
for investment in new solutions.
A proportionately high percentage goes to
operations and management. In the survey
carried out by Rambøll and EVRY, respon-
dents said that they wanted to make more
of their budgets available for innovation and
development.
This means more use of standardisation rather
than customisation and in-house development
wherever possible. It also means that solutions
need to adapt to volume-based models so that
costs vary with the business cycle.
Achieving this needs a long-term strategy for
selecting the right technology for systematic
development and for how to manage IT:A key
question is what should we do ourselves and
what should we let others do for us in order to
optimize the use of our resources?
Three main challenges
Consumer demands and expectations present major challenges and opportunities.This can be summarized as three main challenges.