Editor’s note: This is a Web-exclusive sidebar to “A transformative year”
In the world of technology, predictions about short-term developments are easier to make than long-term ones. We know, for example, that during the course of this year semiconductor processors will get faster, storage will get cheaper, more people will be able to access the internet at high speeds and highly mobile computing will become the norm. We’ll probably have a new iPhone to play with in the third quarter, and by the end of the year Windows 8 will be vying for market share in operating systems.
Speak to CFOs on the front line, and other major tech trends become clear. Business analytics will increase their power with the crunching of so-called big data revealing hidden patterns and showing an uncanny predictive ability of the behaviour of consumers and others. And enterprise systems will become more flexible and powerful as cloud computing and mobile access to data and applications become established technologies.
The advantage of cloud computing (hosting systems on third-party servers and accessing them remotely) and software as a service (SaaS – renting applications in the cloud to run critical services such as accounting and enterprise resource planning, or ERP), is that they cater to both the practical requirements of organisations – they’re easy to roll out and low cost – and their strategic priorities.
The key is flexibility. “We’re certainly looking at SaaS as we come to upgrade our systems,” says Brenda Morris, CPA, CGMA, the CFO of US fashion retailer Love Culture. “It … offers us the chance to scale as the company grows. And we want to plough cash into store openings. A $2 million ERP roll-out is much less appealing than a subscription-based SaaS model, which allows us to limit upfront cost and scale as our needs change.”
Emerging economies have a big advantage as these new models roll out, especially with businesses that are less reliant on legacy infrastructure and can exploit flexible systems more readily. China Telecom, for example, is launching a massive cloud computing strategy this year after investing in data centres covering a total area of 10 million square metres, according to ChinaTechNews.com. And according to KPMG, China Mobile plans to invest $52 billion over three years to roll out cloud computing nationwide.
With applications and data in the cloud, mobile access becomes a much more compelling proposition. So it’s not surprising that the rapid penetration of smartphones and tablet computers is set to continue this year and beyond.
Worldwide sales of media tablets to end users by OS (thousands of units)
|Other operating systems||235||375||467||431|
Source: Gartner (September 2011)
Worldwide mobile communications device open OS* sales to end users by OS (thousands of units)
|Market share (%)||37.6||19.2||5.2||0.1|
|Market share (%)||22.7||38.5||49.2||48.8|
|Market share (%)||16.0||13.4||12.6||11.1|
|Market share (%)||15.7||19.4||18.9||17.2|
|Market share (%)||4.2||5.6||10.8||19.5|
|Other operating systems||11,417||18,392||21,383||36,133.9|
|Market share (%)||3.8||3.9||3.4||3.3|
Source: Gartner (April 2011). *Gartner defines an “open OS” as one that “makes a software developer kit (SDK) available to developers, who can use native application programming interfaces (APIs) to write applications.”
This is particularly significant for the way technology is managed within organisations. “If IT departments don’t change, they risk the business ‘working around them’,” says Mimecast cloud guru Justin Pirie, who manages the world’s biggest network of SaaS professionals. “It’s the business people who have the budgets and the business case, so more and more business IT is going to be bought and paid for by business units, not IT.”
But it also means security – of networks, data and physical infrastructure – must be a priority in 2012.
A study published by security software company Norton during September 2011 estimated that the global cost of cybercrime was $114 billion.
During late October, Iain Lobban, the head of the UK Government Communications Headquarters, the UK’s largest national intelligence agency, said that there was a “disturbing rise” in computer attacks on businesses and governmental organisations, and that digital theft of intellectual property, including blueprints for technological and engineering innovations, was a growing problem.
Meanwhile, recent high-profile network breaches at companies such as Sony dented the reputation of cloud systems.
Accountants looking for the cost and flexibility benefits of full-blown cloud-and-mobile implementations need to be able to offer reassurance about the security risk to their boards and work closely with their IT colleagues to ensure that the necessary protection measures are in place.
The other major trend in IT is the emergence of “big data”. “So much data is captured by organisations’ systems, but not exploited to yield insights,” explains says CIMA technical specialist Peter Simons, ACMA, CGMA. “Developments in business intelligence could change the nature of management information and give early adopters a competitive advantage.”
Indeed, companies such as Apple, Tesco and Amazon – as well as social media firms Twitter, LinkedIn and Facebook – already offer examples of the huge power of “data analytics” to identify patterns that can be used to increase sales, tailor marketing messages and grow digital communities. The coming months are set to see such sophisticated data-mining techniques being applied in a growing number of business areas – including the finance department.
The proliferation of smartphones and tablet PCs, the rapid evolution of social media platforms and the growing power of data analytics are some of the key drivers behind a broader trend: the arrival of the age of total transparency. Business leaders, who traditionally like to feel in control of their company’s reputation, must now work on the assumption that all information will enter the public domain – and manage their governance, communications and other activities accordingly.
Cloud computing will gain ground – it’s vital to consider it as an option when systems need to be upgraded.
Employees are now equipped with their own increasingly powerful mobile data communications devices, from smartphones to tablet PCs. Use these devices to your organisation’s advantage.
Your corporate systems are generating incredible amounts of data – and the tools are in play to exploit it.
IT security is paramount.