Uncertain world forcing global technology leaders to rethink strategies, says new survey

BY Fraser Tennant

Unprecedented political and economic uncertainty across the globe is forcing technology leaders to rethink their strategies, according to a survey carried out by Harvey Nash and KPMG.

‘Navigating Uncertainty’ is the largest IT leadership survey ever undertaken and includes 4498 responses from chief information officers (CIOs) and technology executives across 86 countries. In the main, the survey finds that technology leaders believe that the level of change they are experiencing has reached unprecedented levels and is increasingly coming from unexpected corners.

That said, many technology executives are turning this uncertainty into opportunity and are helping their organisations to become more nimble and digital, a strategic rethink they feel will help them navigate through unpredictable change and thrive in an uncertain world.

“Few would have predicted the seismic shift caused by recent political change in many western countries”, wrote Albert Ellis, chief executive of Harvey Nash Group. “And few would have predicted the astonishing advances that have been made in data analytics, cloud, or – as this year’s survey reveals – automation."

The survey’s key findings include: (i) two-thirds of organisations are adapting their technology strategy because of unprecedented global political and economic uncertainty; (ii) 89 percent of organisations are maintaining or ramping up investment in innovation, including in digital labour; (iii) digital strategies have been embraced by businesses at an entirely new level; (iv) cyber security vulnerability is at an all-time high; (v) female CIOs are far more likely to have received a salary increase than male CIOs in the past year, although the number of women in IT leadership remains low at nine percent; and (vi) weak ownership, an overly optimistic approach and unclear objectives are the main reasons why IT projects fail.

The survey (now in its 19th year) also found a clear divergence between organisations that are effective at digital transformation and those that are not. CIOs at these ‘digital leader’ organisations are almost twice as likely to be leading innovation across the business and their organisations are investing in cognitive automation at four times the rate of others.

“Whilst the future might be difficult to predict, what is very clear is that many technology executives are turning this uncertainty into opportunity”, wrote Lisa Heneghan, global head of technology at KPMG. “They are helping their organisations become more nimble and digital, to navigate through unpredictable change and thrive in an uncertain world.”

Report: Navigating Uncertainty

IoT breaches hit US firms

BY Richard Summerfield

Nearly half of all companies in the US using an Internet of Things (IoT) network have been the victims of recent security breaches, according to a new survey from Altman Vilandrie & Company.

The survey, ‘Are your company’s IoT devices secure?’, which included nearly 400 organisations, notes that security systems protecting 48 percent of organisations’ IoT networks have been breached at least once in the last two years. Overall, the cost of the IoT security breaches represented 13.4 percent of smaller companies’ annual total revenues. For larger companies – those with annual revenues in excess of $5m – the cost of a breach can run into the tens of millions.

“While traditional cybersecurity has grabbed the nation’s attention, IoT security has been somewhat under the radar, even for some companies that have a lot to lose through a breach,” said Altman Vilandrie & Company director Stefan Bewley, who co-directed the survey. “IoT attacks expose companies to the loss of data and services and can render connected devices dangerous to customers, employees and the public at large. The potential vulnerabilities for firms of all sizes will continue to grow as more devices become Internet dependent.”

The survey also highlights a connection between the amount companies spend on IoT security and the likelihood that they endure a breach. Typically, those companies that have not been breached have invested as much as 65 percent more in IoT security than their counterparts. Preparedness is key, though the risks for companies of all size, and at all levels of preparedness, will continue to grow as more devices become internet-dependent.

“We see it being critical for security providers to build a strong brand and reputation in the IoT security space. There are lots of providers developing innovative solutions, but when it comes to purchasing decisions, buyers are looking for a brand and product they trust,” said Ryan Dean, a principal at Altman Vilandrie & Company, who co-directed the survey. “Price is a secondary concern that buyers tend to evaluate after they have narrowed their options down to a few strong security solutions.”

Report: Are your company’s IoT devices secure?

Rise of the robots

BY Richard Summerfield

Robotic process automation (RPA) and artificial intelligence (AI) are being increasing harnessed by organisations across a number of different sectors, according to a new report from PEX Network.

The report, which was produced following a survey of over 150 banking, financial services and insurance executives, sets out the key challenges, priorities and strategies for AI and RPA utilisation in 2017.

For the financial services, banking and insurance industries in particular, AI and RPA could have a truly transformative effect over the coming decade. Accordingly, it is imperative that companies embrace automation and robotics as quickly as possible.

Some companies have begun their implementation process with respect to RPA. Thirty-five percent of respondents have set about integrating RPA and are looking to expand their usage of automation where possible.

However, the firms that have invested thus far have typically only dipped their toe in the water. Around 80 percent of firms have invested less than $1m into RPA thus far. AI investment also remains on the low end of the spectrum, with 60 percent of respondents investing less than £100,000. Just 11 percent of firms have invested £1m and above.

The relative immaturity of RPA may have served as a roadblock to implementation to date. Twenty-six percent of survey respondents cited a lack of process standardisaton before RPA implementation as the main obstacle in implementing an RPA solution, 16 percent of executives cited a lack of resources to allocate to RPA implementation and 13 percent cited a lack of available budget as primary reasons that their firm had not yet implemented an RPA solution.

For those firms looking to automate their services in the future, they must begin by considering which of their processes would be suitable. Also, they must evaluate the forms of AI and FinTech technologies available to them. Fifty-seven percent of firms are considering cognitive RPA, while 53 percent are evaluating machine learning and 50 percent are exploring Big Data.

In the coming decade, technology solutions, including RPA, AI, Big Data and the blockchain, will have a transformative effect on the financial services, banking and insurance sectors. Companies would be wise to embrace these technologies early, when the price points are low and the potential returns are much higher.

Report: 2017 Benchmarking Report: The future of robotic process automation and artificial intelligence

Consulting sector M&A deals peak amid global turbulence

BY Fraser Tennant

Mergers & acquisitions (M&A) activity in the consulting sector has reached a nine-year high (up 1 percent) despite the impact of ongoing geopolitical turbulence, according to Equiteq’s ‘Global Consulting Mergers & Acquisitions Report 2017’. 

Now in its 10th year, the Equiteq report provides data such as deal sizes and structures, valuation multiples, equity share price performance, regional activity and strategic and private equity buyer trends. For example, it reveals that 44 percent of all consulting sector deals took place in North America (which enjoyed the highest M&A value), although Europe, with 38 percent of deals, and Asia-Pacific, with 9 percent, enjoyed stronger M&A growth. The report also notes that deal activity was particularly robust in the UK, with the number of completed transactions increasing by 20 percent over the course of the year.

Additional findings include: (i) the top consulting segments for deal activity were the rapidly evolving management consulting, IT services and media segments, with management consulting seeing a 2 percent growth in deal volumes and a 32 percent increase in the share-price index; and (ii) traditional boundaries between consulting segments continue to blur, leading to a strong convergence at the intersection of management consulting, media & marketing and technology.

Furthermore, highlighting the global nature of M&A activity in the consulting sector, the report confirms that despite some major political upheavals, cross-border deal activity remained strong – accounting for 28 percent of all deal volumes (up 27 percent from the year before).

“We are seeing unprecedented diversification amongst acquirers of knowledge-led businesses such as management consultants, media agencies, engineering consultants and HR consulting,” said David Jorgenson, chief executive of Equiteq. “As a result this is driving convergence between consulting sectors and creating hybrid business models with creative, technology consulting and managed services. This convergence trend – driven by digital disruption, changing client demands and the search for growth – is blurring traditional boundaries.”

Commenting on the prospects for the consulting sector in the second half of 2017 and beyond, Mr Jorgenson concluded: “Having already seen high-profile deals across segments of the consulting market, as well as strong deal activity amongst high-profile PE investors, we expect that this robust demand for M&A will continue over the next twelve months.”

Report: Global Consulting M&A Report

Greek austerity bill approved as eurozone fails to reach bailout agreement

BY Fraser Tennant

In the latest instalment of the saga that is the Greece austerity programme, the country’s parliament has approved a new austerity bill that is intended to assist in the release of the latest tranche of bailout funds from the country’s creditors.

The new austerity bill is worth €4.9bn and is designed to cover the period 2019 to 2021. The Greek parliament has also voted for a simultaneous relief package worth €7.5bn over the same period – to counterbalance the negative effect of pension cuts and a lower non-taxed threshold.

Unsurprisingly, the announcement of the proposed cuts was met with an angry response, with thousands of protesters clashing with police outside parliament.

The relief package also includes: (i) a decrease of tax and income rate, electricity and household grant for vulnerable social groups; (ii) broadening of public investment projects to combat unemployment and support small and medium size enterprises (SMEs); (iii) , opting-out from health coverage cost for weak income groups; and (iv) free access to primary healthcare services. Furthermore, Greece’s Syriza government is committed to implementing the package under the condition that creditors will proceed to the specification of mid-term debt relief measures.

However, following the announcement of the austerity bill and relief package, eurozone finance ministers failed to agree a debt relief plan for Greece – a breakdown in talks which has been blamed on an inability to agree on whether the country will be able to repay its debts in the long run. The failure also raises the possibility of a crisis for the single currency should Greece miss a loan repayment.

“The Greek government has been putting all efforts to drag the country outside the Memoranda in 2018,” says Dim Rapidis, a political and communications adviser. "Creditors share the same view, but the problem is that Germany's minister of finance, Wolfgang Schaeuble, seems reluctant to abide by the creditors commitment to provide debt relief.

"A possible deadlock in agreeing concrete mid-term debt relief for Greece could blow the entire deal. The Greek government, the European Commission and the European Stability Mechanism are pushing the German government to accept debt relief, but the latter wants to delay such decision and discuss it after domestic elections in September 2018," he adds.

Should a decision on debt relief be reached, the European Central Bank may then include Greece in its quantitative easing programme – a move which would give Greece the green light to seek funds from the markets and begin the process of rebuilding its shattered economy.

News: Greece tranche not contingent on IMF in bailout - Greek spokesman