The IT Nerd

Companies using cloud technologies to automate their legacy applications and IT operations[2] processes are gaining a significant competitive advantage over those behind the curve: among Fast Movers, 75% have seen an increase in revenue and profitability while 80% of firms say their organization’s agility has improved. This is according to a new report from Capgemini and Sogeti which launched today. “The automation advantage: Making legacy IT keep pace with the cloud,” surveyed 415 IT executives at organizations with large legacy[3]estates across eight countries, to explore the benefits of applying cloud automation[4] to their IT operations processes.

Cloud automation bolsters business innovation

The use of cloud technologies to automate legacy applications and IT operations is resulting in business benefits beyond the bottom-line of revenue and profitability. Fast Movers deploy code twice as often as the followers. An even more select 5% of Fast Movers deploy code continuously. Capgemini’s 2017 research report, Cloud native comes of age, showed the proportion of new enterprise applications that are cloud native will more than double by 2020 in a bid to improve agility. However, today’s report goes further, highlighting that cloud automation is driving acceleration and agility.

Furthermore, fast moving firms see cloud automation as more than a cost-cutting or efficiency exercise; 75% of Fast Movers have attempted to use cloud automation to innovate their business models. Over eight in ten firms report that their customer experience has benefitted as a result.

Surviving the skills shortage

With 70% of executives identifying an absence of skills as a major challenge, companies need to be able to deploy the talent they have on the tasks with the highest business value. Using cloud technologies to automate legacy applications and IT operations is facilitating this, giving time back to highly skilled engineers to work on projects which boost the bottom line: 59% of fast moving firms have re-deployed engineers onto higher-value activities such as new development. Eliminating monotonous tasks has been a priority for Fast Movers, with 73% of application testing processes in these organizations now automated, nearly four times that of Followers. With this new-found flexibility, firms are starting to upgrade the skills of their existing staff in line with their DevOps strategies – benefitting management practices.

Cloud automation challenges

Despite clear bottom-line benefits, firms are holding back from using cloud technologies to automate legacy IT operations due to reservations over cybersecurity. Security (27%) and data privacy (19%) concerns are cited by firms as the toughest obstacles in the move to automation of IT operations processes, a trend seen across both Fast Movers and Followers. With GDPR coming into force on 25 May this issue has come into focus, with IT leaders now facing considerable pressure from CEOs and boards to ensure that technology initiatives do not create new data breach risks. However, with cloud providers being increasingly diligent and utilizing security as code processes, the move to automation can mean tighter security, not less.

Overcoming obstacles

To catch up with the Fast Movers included in the research, Followers have work to do if they are to remain competitive. The report sets out practical steps for Followers who are looking to embrace cloud automation and enterprise DevOps, including defining the automation strategy to meet business objectives and building the governance model, processes and culture for DevOps.

For more information on today’s news, or to download a copy of the report, click here.

Research Methodology

The analysis in this report is based on an online survey of 415 IT executives, conducted in October 2017 by Capgemini, Sogeti and Longitude.

Just over one-third of the respondents (34%) hold C-suite positions, and 66% are management-level IT employees. All respondents work in organizations earning $500m or more in annual revenue, and mainly in the financial services, consumer products, retail and distribution (CPRD), and power and utilities sectors.

Eight countries are represented in the survey sample: Australia, France, Germany, India, the Netherlands, Singapore, the UK and the US, with 40% of the respondents from the US, 40% from Europe, and 20% from Asia-Pacific.

To complement the survey, in-depth interviews were conducted with executives at influential First Movers: Securitas, Husqvarna, HashiCorp, Cisco IT Infrastructure Group, Octo Telematics, Poste Italiane, CA-SILCA and Danieli.

[1] “Fast Movers” are the 20% of those surveyed who are the most advanced in applying automation. “Followers” are those at earlier stages of automation maturity.

[2] The term “IT Operations” denotes infrastructure provisioning, configuration management, application testing, and application release.

[3] For the purposes of this study, the term “legacy” denotes applications and application infrastructure that organizations maintain on premise, and not in the cloud.

[4] Cloud automation is delivered using cloud-based tools, but applies to legacy and cloud-native applications, and can be executed in any cloud environment.

Capgemini today announced a new report by its Digital Transformation Institute, which reveals that the automotive industry can expect to achieve $160bn in productivity gains annually from smart factory adoption from 2023 onwards. The report, Automotive Smart Factories: How Auto Manufacturers can Benefit from the Digital Industrial Revolution demonstrates that the automotive sector has set more aggressive targets for smart factory initiatives compared to other sectors.

A global top ten automotive manufacturer can expect to realize an additional $4.6 billion or a 50% growth in operational profits annually within five years of a full smart factory implementation. The report predicts that the average productivity growth of smart factories within the automotive sector will be 7% as of 2023, while an automaker will break-even within a year of executing the full potential of its smart factories.

By the end of 2022, automotive manufacturers expect that 24% of their plants will be smart factories. Nearly half of automotive companies (46%) already have a smart factory initiative, behind only industrial manufacturing (67%) and aerospace (63%), while at further 43% of automotive companies, smart factory initiatives are currently being formulated. According to the report, the automotive sector has the highest share (49%) of organizations who have invested more than $250 million in smart factories.

However, 42% of automotive manufacturers accept they are not on track to realize the full potential of smart factories and are struggling with the technology move. This is the highest across all the manufacturing sectors studied. The report identified that those making the best progress are investing three times more than the companies who are struggling. The more advanced manufacturers are also investing in software such as advanced analytics and AI-based components, whereas those struggling focus too heavily on hardware-based components putting them on the back foot.

While a large proportion (46%) of original equipment manufacturers (OEMs) have been successful in their smart factory initiatives, less than a third of automotive suppliers (32%) claim to have been successful. The report highlights that OEMs are leading the way, but can do more to help suppliers adopt smart factories. For example, it highlights that OEMs can contribute through financial support and working closely with suppliers on innovation via startups and academies. When OEMs and suppliers work together to create smart factory processes, issues can be minimized early on in the production process.

A copy of the report can be downloaded here

Although a vast majority of companies have good intentions when implementing IoT to support smart operations, obstacles with this technology remain. Capgemini released a report today broken down by industry that shows IoT initiatives designed to optimize operations at companies do not achieve their goals or reach meaningful scale. A few of the key findings include:

• 6 out of 10 organizations have failed to take operational IoT initiatives past proof-of-concept or beyond implementation at one or two sites
• More than 60% of organizations cite cyber security or data privacy concerns as a major deterrent to implementing IoT in operations
• Around 50% of companies struggle to establish a clear business case for their investments
• 60% of companies say they don’t have the analytics capabilities to take advantage of the data generated from IoT sources
• More than 50% of organizations say uncertain standards are a significant challenge.

Here is a breakdown of industry activity in deploying IoT operations at full scale:

With a $508 million infusion of cash and a national strategy, the Canadian federal government has ensured that the broad economic opportunities presented by cybersecurity will live for a news cycle or two. In the wake of Budget 2018, I want to provide some important context for the narrative from a global report released last week – that cybersecurity is already the biggest and most urgent talent gap facing business leaders.

The report from Capgemini’s Digital Transformation Institute shows that cybersecurity represents the biggest gap between demand for skills and internal supply. The demand is quickly becoming a critical issue for businesses, leaving them dangerously exposed to cybercrime and unable to maximize competitive advantage from digitization.

Cybersecurity Talent: The Big Gap in Cyber Protection, recommends a number of tactical priorities for business leaders to help them recruit and retain the best cyber talent:

• ‘Think outside the box’ when approaching candidates – e.g. people on the autism spectrum are highly skilled at pattern recognition
• Maximize existing internal skill sets and convert them to fill cyber roles
• Ensure cybersecurity is integrated across the organization
• Offer flexible working benefits to retain the best talent

The rise of FinTechs continues to revitalize the financial services customer journey; however, many startups have realized they will struggle to succeed alone. With complementary strengths, FinTechs are increasingly looking to symbiotic collaboration with the traditional financial services firms they once sought to overthrow, according to the World FinTech Report 2018 from Capgemini and LinkedIn, in collaboration with Efma. The report examines how FinTechs are transforming the financial services customer journey through better customer centricity and use of emerging technologies; the potential for symbiotic relationships between FinTechs and traditional financial institutions; and the impending role of BigTechs in financial services.

 FinTechs drive revitalization of the financial services customer journey

FinTechs, innovating with emerging technologies, are revitalizing the customer journey through financial services. Competition and rising customer expectations are driving demands for more convenience and personalization. FinTech firms are leveraging both customer data to drive personalized offerings, and providing fast, 24/7 online services that can be accessed from any device.

However, financial services customers have greater trust in the brands of traditional firms versus those of FinTechs, according to the World FinTech Report 2018. For future success, financial services firms must look to continue aligning with customer goals, maintaining trust, and delivering digital, agile, and efficient processes.

 Win-win collaboration opportunity

Unburdened by legacy systems and old-school culture, FinTechs have leveraged new technologies to rapidly respond to customer demands. In fact, the World FinTech Report 2018 reports found that more than 90 percent of FinTech firms said agility and providing an enhanced customer experience are key to competitive advantages, and more than 76 percent cited their ability to develop new products and improve existing products and services as critical to success. The challenge is to scale-up and create financially-viable business models. Although FinTechs have raised nearly US$110 billion since 2009, the report found that most are likely to fail if they do not build an effective partnership ecosystem.

At the same time, traditional financial institutions are adopting many FinTech customer service enhancements, while retaining strengths including risk management, infrastructure, regulatory expertise, customer trust, access to capital, and more. Both traditional and FinTech firms stand to gain from a symbiotic, collaborative relationship.

 Finding the right partner is essential to successful collaboration

This year’s report found that collaboration will be essential to foster long-term success for both FinTechs and traditional financial firms. A successful collaboration is contingent on finding the best partner and engagement model. To develop strong partnerships, firms will have to overcome barriers to collaboration.

According to the World FinTech Report 2018, more than 70 percent of FinTech executives said their top challenges to collaborating with traditional financial firms was their lack of agility, while traditional firms perceive negative impacts on customer trust, brand, and changing the internal culture as their top challenges.

Looking ahead: accelerating collaboration and preparing for the future

The future of financial services is in the hands of both the FinTech and traditional firms that can complement each other’s strengths to meet customer needs and redefine the journey. To help financial services firms accelerate collaboration and foster symbiotic relationships, Capgemini launched a ScaleUp Certification tool. This tool creates a model for collaboration and mutual verification that encourages partnership between traditional firms and FinTechs. While the great unknown is the disruption that will come from BigTechs—the large, multinational technology firms with a huge retail customer base, what is clear is that now is the time for FinTechs and traditional firms to find the right collaboration partner and redefine the path to success.

About the World FinTech Report 2018

Capgemini and LinkedIn, in collaboration with Efma, developed the World FinTech Report 2018 based on a global survey encompassing responses from traditional financial services firms and FinTech firms including

banking and lending, payments and transfers, investment management, and insurance. Questions sought to yield perspectives from both FinTech and traditional financial services firms—exploring various aspects of the customer journey, and key success factors for customer journey enhancement. The survey sheds light on the evolving relationship between incumbents and new-age players with a focus on the FinTech viewpoint, and an analysis that may help both entities achieve business success.

For more information, explore the report website at www.fintechworldreport.com.

A new report by Capgemini’s Digital Transformation Institute highlights an urgent and growing cybersecurity talent gap, calling for new recruitment and retention strategies to help organizations contain cyber risks and build competitive advantage. The report, Cybersecurity Talent: The Big Gap in Cyber Protection, demonstrates that of all the digital skills necessary for organizations with aspirations of digital leadership, cybersecurity represents the biggest gap between demand for those skills and internal supply.

The report surveyed more than 1,200 senior executives and front-line employees and analyzed social media sentiment of more than 8,000 cybersecurity employees. Sixty-eight percent of organizations reported high demand for cybersecurity skills compared to 61 percent demanding innovation skills and 64 percent analytics skills. Demand for these skills was then set against the availability of proficient skills already present in the organization. This identified a 25 percentage point gap for cybersecurity skills (with 43 percent availability of proficient skills already present in the organization), compared to a 13 percentage point gap for analytics (51 percent already present) and a 21 percentage point gap for innovation (40 percent already present).

“The cybersecurity skills gap has a very real effect on organizations in every sector,” said Mike Turner, Chief Operating Officer of Capgemini’s Cybersecurity Global Service Line.“Spending months rather than weeks looking for suitable candidates is not only inefficient, it also leaves organizations dangerously exposed to rising incidents of cybercrime. Business leaders must urgently rethink how they recruit and retain talent, particularly if they wish to maximize the benefits from investment in digital transformation.”

The demand for precious cybersecurity talent is projected to grow over the next 2-3 years with 72 percent of respondents predicting high demand for cybersecurity in 2020, compared to 68 percent today. Set against increasing incidents of cyberattacks and the need for organizations to not only protect themselves but also maximize competitive advantage from digitization, the report recommends a series of tactical priorities for business leaders.

Priority 1 – integrate security

The first priority for companies is to assess how well security is integrated across the organization. What is the culture of cybersecurity outside the team with direct responsibility for keeping data protected? How security-savvy are app developers and network managers?

“It’s important to make the organization as a whole better at cybersecurity, aligning the enterprise with principles and processes that are secure from the ground up,” explains Turner. “Get the basics right, in terms of application development.  Develop secure code. Make your network engineers and cloud architects better at securing the cloud. That’s a good way to fight the skills gap, because it teaches the organization to be secure by design.”

Priority 2 – maximize existing skillsets

“Another priority is to look at the, as yet, unrecognized cybersecurity skills that lie within,”said Turner. “Half of all employees are already investing their own resources to develop digital skills, showing an appetite to upskill. Organizations that struggle to recruit externally may be able to uncover candidates with adaptable skillsets who can be trained. Those functions with complementary and transferable skills include network operations, database administration and application development.”

In addition, companies should look at the requirement to embed security into every service and application, and hire business communicators to complement the technical skills in their team. Business analysts and technical marketers could be transferred to cybersecurity roles to enable the company-wide adoption of best practices.

Priority 3 – think outside the box

A third priority is for organizations to think beyond the normal recruitment strategies and understand the root skills of cybersecurity. Look at traits and skills present in completely different job roles and interview candidates the organization might not usually consider. Those currently in math roles for example, are often highly skilled at pattern recognition.

“Thinking outside the box is about understanding the transferable skills,” adds Turner. “For example, people on the autism spectrum are fantastic at pattern spotting and are often blessed with numerical and problem-solving skills, attention to detail and a methodical approach to work – all useful traits for cybersecurity best practice.”

Priority 4 – strengthen retention

The final report recommendation looks at retention of talent. In a highly competitive recruitment market, organizations must also look at engagement of existing employees to ensure talent gaps don’t worsen.

The report reveals that cybersecurity employees value organizations that offer flexible working arrangements, encourage training, and prioritize clear and accessible career progression. Within the new report, a difficult work-life balance was discussed as one of the five worst aspects of the job by cybersecurity professionals on social media and a main reason why they leave or remain dissatisfied with their company.

The clear majority (81 percent) of cybersecurity talent agreed with the statement: “I prefer joining organizations where I have a clear career development path” compared to 62 percent of all respondents in our survey. The number is even higher (84 percent) for Gen Y and Gen Z employees, who highlighted a lack of career progression as their number one concern. Managing these softer but equally important retention issues is a key requirement for building a viable and sustainable cybersecurity offering.

Research Methodology

Capgemini Digital Transformation Institute surveyed 753 employees and 501 executives at the director level or above, at large companies with reported revenue of more than $500 million for FY 2016 and more than 1,000 employees. The survey took place from June to July 2017, and covered nine countries – France, Germany, India, Italy, the Netherlands, Spain, Sweden, the United Kingdom and the United States and seven industries – Automotive, Banking, Consumer Products, Insurance, Retail, Telecom and Utilities.

Capgemini also conducted interviews with recruiters from global firms, cybersecurity associations and academics to understand best practices to mitigate the cybersecurity talent gap. Lastly, Capgemini analyzed the sentiments of around 8,400 current and former employees at 53 cybersecurity firms with at least 100 employees on social media. Selected firms operate primarily in the cybersecurity space covering (but not limited to) data security, cloud security, mobile security, enterprise security, email security, and application security.

A copy of the report can be downloaded here