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Top six enterprise IT priorities in the Nordics

The future of enterprise IT looks bright in the Nordic region, with growing focus on datacentre investments, national cloud and automatisation

This article can also be found in the Premium Editorial Download: CW Nordics: CW Nordics – August 2015 Edition

There is growing focus on datacentre investments, national cloud and automisation in the Nordic region, according to IDC's list of the top priorities of IT decision-makers in Denmark, Sweden, Finland and Norway in 2015.

The list, which provides a strong indication of where Nordic companies are currently placing their IT chips, also showed improved customer experience is high on the agenda for firms in the region.

"This is also the case for business intelligence/analytics and cloud," said IDC Nordic research manager Anders Elbak. "Security has become relatively less important and the same goes for unified communication.

“Companies are increasingly looking to increase revenue rather than reduce cost. This puts the customer in focus – and consequently the interest in customer experience increases.”

The following are the current top six enterprise IT technologies in Nordic companies, based on IDC's survey:

Customer experience systems

Using IT to manage and enhance customer experience is top of the list for most Nordic IT decision-makers, with almost 40% naming it among their main priorities.

Kai Mäkelä, CEO of Finnish consultancy Fluido, believes one reason for this is that user experience from consumer applications is driving the demand towards enterprise systems, with customers increasingly accustomed to personalised digital experiences. 

“Organisations, whether public or private, need to provide real-time experience for both customers and employees in marketing, sales and customer service,” he said.

“This means solutions providing self-service capabilities in service and sales are in great demand. Marketing automation solutions enabling relevant content delivery to influence decisions are also one of the hottest areas today among Nordic businesses.”

While customer experience technology investments cover a wide scale of software – and hardware to run the software on – Elbak at IDC highlights customer service, marketing, web content management and e-commerce software as the most common ones.

Mobility systems

“Today, mobility is also very much about software – mobile device management, security and various solutions on the back end to allow mobile access to existing systems,” Elbak said.

“Mobility is predominately used for productivity enhancement which gives the employees remote access to up-to-date data, collaboration tools and so on.”

Gartner’s annual CIO survey showed similar results, with mobile in the top five technology priorities in the Nordics. Gartner research director Tomas Nielsen sees using mobility as a platform as a key area where Nordic companies are ahead of their global peers.

“66% of Nordic CIOs consider mobile to be either their first or second choice for customer-facing applications," he said. "Same thing for employee-facing applications, where 50% in the Nordic region consider mobile as the first or second choice.”

While the numbers globally aren’t far behind (62% and 48% respectively), Nielsen attributes the stronger focus on customer-facing mobile applications in the Nordics to high-income, mature markets, where there is a very high penetration of smartphones.

IT security

Always topical, security issues have been emphasised with the steady stream of well-publicised hacks and a growing number of devices and services that companies need to manage. Consequently – or by coincidence – Nordic enterprises are ready to invest in IT security with more than 35% of CIOs in the region naming it as one their top priorities, according to IDC.

“Security is a necessary evil. Companies do not want to 'buy security', but evidently need secure IT and business solutions,” said Elbak.

Moreover, security issues do not touch the Nordics alone. In the recent TechTarget and Computer Weekly IT priorities survey 2015, 32% of IT decision-makers in Europe were planning to implement initiatives related to network-based security, 33% to identity and access management and 28% to cloud security.

Infrastructure optimisation

The ever-evolving enterprise IT environment is also putting pressure on ensuring efficient and cost-effective IT infrastructures.

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“Infrastructure optimisation is mostly about automation, but emerging technologies like software-defined storage and networking solutions are also adopted. This is often related to building or managing a cloud-like or hybrid infrastructure,” said Elbak. 

“Infrastructure optimisation investments make IT more agile and integrate the existing legacy infrastructure with cloud services and such like.”

While cloud infrastructure is often highlighted – Finland has the highest cloud services take up in Europe, with Sweden, Denmark and Norway following closely behind – another topical infrastructure area is datacentres. In the IT priorities survey by TechTarget and Computer Weekly, 38% of European enterprises were planning to update their datacentre infrastructure during 2015.

Industry-specific sytems

Slightly less than 30% of Nordic IT decision-makers place their focus on industry-specific systems. According to Elbak, this refers to core business systems, such as enterprise resource planning (ERP) systems, but in industries which don’t typically use them and require systems more tailored to needs specific to their industry. The aim is to improve competitiveness.

“Today this often requires process optimisation, which is enabled by new technology – for example, mobile solutions – but the back-end systems cannot adapt or cope with the changing requirements,” said Elbak. “Consequently, there is a need to invest in more modern business applications.”

ERP systems

According to IDC, almost 25% of Nordic companies place ERP systems among their main IT priorities. In Gartner’s survey, ERP is valued even more highly and takes the number one spot among technology priorities.

It is also where Nordic priorities differ most notably from Gartner’s global survey, where ERP only places fourth.

“The ERP priority is mainly due to the need to renovate the core systems, because of old ERP systems and to become ready for digital opportunities,” said Nielsen.

He noted that lengthy ERP initiatives can be a cause of concern as the global business sentiment is changing from efficiency and effectiveness towards growth and innovation – where ERP systems aren’t necessarily leading tools.

“Especially in large ERP renovations which run over years, it is necessary for companies to remain mindful of the fact that even if something was a good idea three years ago it may need adjustment as the business climate changes,” Nielsen said. 

“It’s fine that Nordic CIOs have been working on ERP, but they should evaluate their ERP initiatives and see that they fit their digital business needs, and potentially adopt ‘post-modern ERP’ in their approach.”

With post-modern ERP, Gartner refers to flexible ERP systems which combine on-premise applications with cloud-based systems and business process outsourcing (BPO), instead of heavily consolidated and customised legacy ERP systems.

Bubbling under

Also included among the top 10 IT technology priorities are customer relationship management systems, business intelligence/analytics, unified communication and collaboration, and IT outsourcing.

In the future, the list is also expected to see a shift towards cognitive technology – also known as cognitive computing – and artificial intelligence. 

PA Consulting management consultant Fred Johnsen argues IDC’s list is mostly spot on, but doesn’t highlight enough the growing interest towards cognitive technology and the opportunities it offers in bringing down costs, increased service availability and improved consistency of service quality.

“The first thing we see cognitive technology addressing is how to automate your IT operations. We know most CIOs are facing a lot of budget pressure to do more with less. In that sense, cognitive technology and artificial intelligence are clearly tools that you need to have,” he said. 

“In industries such as BPO, if you haven’t embraced these technologies within the next five to 10 years, I don’t think you will have any role in the market. You will be wiped out.”

Consequently, we could be looking at a very different enterprise IT technology list in a few years time.

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