Gartner Says Digital Business Economy is Resulting in Every Business Unit Becoming a Technology Startup

Worldwide IT spending is projected to surpass $3.9 trillion in 2015, a 3.9 percent increase from 2014, and much of this spending will be driven by the digital industrial economy, according to Gartner, Inc.

The impact that the digital business economy is having on the IT industry is dramatic. Since 2013 650 million new physical objects have come online. 3D printers became a billion dollar market; 10 percent of automobiles became connected; and the number of Chief Data Officers and Chief Digital Officer positions have doubled.

In 2015, all of these things will double again.

Peter Sondergaard, senior vice president at Gartner and global head of Research, explained today to an audience of more than 8,500 CIOs and IT leaders at the sold out Gartner Symposium/ITxpo, that these are seismic forces at work, creating permanent, structural changes.

Gartner defines digital business as new business designs that blend the virtual world and the physical worlds, changing how processes and industries work through the Internet of Things.

“This year enterprises will spend over $40 billion designing, implementing and operating the Internet of Things,” Mr. Sondergaard said. “Every piece of equipment, anything of value, will have embedded sensors. This means leading asset-intensive enterprises will have over half a million IP addressable objects in 2020.”

Every Business Units is a “Technology Startup”

There is a dramatic shift in IT spending power. Mr. Sondergaard said there is a shift of demand and control away from IT and toward digital business units closer to the customer.

“Thirty-eight percent of total IT spend is outside of IT already, with a disproportionate amount in digital. By 2017, it will be over 50 percent,” Mr. Sondergaard said. “Digital startups sit inside your own organization, in your marketing department, in HR, in logistics and in sales. Your business units are acting as technology startups.”

Gartner estimates that 50 percent of all technology sales people are actively selling direct to business units, not IT departments. Millions of sales people, and hundreds of thousands of resellers and channel partners are looking for new money flows in the fluid digital world, and they are finding eager buyers.

Become a Bimodal Organization

Bimodal IT fills the digital divide between what IT provides and what the enterprise really needs. Mode 1 is traditional, and the systems that support them must be reliable, predictable, and safe (like a great IT organization). Mode 2 is nonsequential, emphasizing agility and speed (like a startup) because disruption can occur at anytime.

Mr. Sondergaard used the example of smart machines to highlight the disruption caused in digital business. Smart machines are an emerging “super class” of technologies that perform a wide variety of work, of both the physical and the intellectual kind. For example, school computers have been grading multiple tests for many year, and now they are grading essays, unstructured tests that require analysis.

“Not is the grading more accurate, but students actually work harder on their essays when they are graded by a smart machine,” Mr. Sondergaard said. “Other professional tasks won’t be far behind: financial analysts, medical diagnostics, and data analytics jobs will be impacted. Knowledge work will be automated.

Smart robots will appear not just on the manufacturing floor, where they do physical work, but in the workplace and even in the home. Smart machines will automate decision making. Therefore, they will not only affect jobs based on physical labor, but they will also impact jobs based on complex knowledge worker tasks.

Impact of Digital Business on Jobs

Digital businesses will impact jobs in different ways. By 2018, digital businesses will require 50 percent fewer business process workers. However, by 2018 digital business will drive a 500 percent boost in digital jobs.

Hottest Skills in Digital Business

Right now, the hottest skills CIOs must hire or outsource for are:

• Mobile
• User Experience
• Data sciences

In the future, three years from now, the hottest skills will be:

• Smart Machines (including the Internet of Things)
• Robotics
• Automated Judgment
• Ethics

Over the next seven years, there will be a surge in new specialized jobs. The top jobs for digital will be:

• Integration Specialists
• Digital Business Architects
• Regulatory Analysts
• Risk Professionals

Mr. Sondergaard explained to the CIOs in the audience, “The new digital startups in your business units are thirsting for data analysts, software developers and cloud vendor management staff, and they are often hiring them fast than IT. They may be experimenting with smart machines, seeking technology expertise IT often doesn’t have.

“You must build talent for the digital organization of 2020 now. Not just the digital technology organization, but the whole enterprise. Talent is the key to digital leadership. Build credibility and build the two-speed organization.”

About Gartner Symposium/ITxpo

Gartner Symposium/ITxpo is the world’s most important gathering of CIOs and senior IT executives. This event delivers independent and objective content with the authority and weight of the world’s leading IT research and advisory organization, and provides access to the latest solutions from key technology providers. Gartner’s annual Symposium/ITxpo events are key components of attendees’ annual planning efforts. IT executives rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency.

Additional information about Gartner Symposium/ITxpo in Orlando, is available at www.gartner.com/us/symposium. Video replays of keynotes and sessions are available on Gartner Events on Demand at www.gartnerondemand.com. Follow news, photos and video coming from Gartner Symposium/ITxpo on Gartner News at www.gartnernews.com, on Twitter at www.twitter.com/Gartner_inc and using #GartnerSym, Facebook at http://www.facebook.com/GartnerSymposium and Linked In at https://www.linkedin.com/groups?gid=1893287.

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November 9-13, Barcelona, Spain: www.gartner.com/eu/symposium

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Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the valuable partner to clients in over 9,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 6,400 associates, including more than 1,480 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.