Technology evolution. Managing the risk in four key areas

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1 Technology evolution Managing the risk in four key areas

2 The message is widespread: the concept of as-a-service is real and has the potential to unleash the power of processing, increased capacity, cost efficiency, agility, unlimited scale and innovation. To serve the core needs of enterprises, the IT landscape is rapidly evolving in four key areas: cloud computing, social media, mobile devices and broadband access..

3 Executive summary More than a decade ago, the invention of webpages and the World Wide Web drove consumer interest in the Internet. This interest was caused by the growth in the home PC industry and improvements in network technology which resulted in greater bandwidth availability. Mobile broadband evolved rapidly; and today, one of the fastest-growing forms of computing is tablets and smart devices. Bringing all of this together is cloud computing, which provides the platform for scalable processing power, increased agility, flexibility, accessibility and innovative transactions. It is clear that technology is evolving at a very fast pace. Organisations are increasingly becoming more business focused, as they face increased pressure to remain competitive, solve complexities, maintain operational efficiency and innovate, all while driving down costs. Organisations are investing in enabling technologies such as cloud, social and mobile computing as a clear drive towards marketplace differentiation and customer satisfaction and growth. The technology landscape, therefore, evolved from the industrial age, to the information age, and now into the digital age. In this journey to a totally digital world, cloud computing combined with social media, broadband wireless access and smart devices transforms and enables customers, suppliers and employees to interact on a commercial and personal level that leads to enhanced collaboration, better customer relationships, innovation and increased agility and market growth. The need for convergence The convergence of Internet technologies, virtualisation and wireless channels, combined with advanced end-user hardware and unlimited processing power and memory, is creating a powerful way to deliver information technology services. Both SME and enterprise businesses agree that the greatest inhibitors to a cloud computing solution are security and legal issues with the greatest advantages to cloud computing accelerated deployment and scalability. Deloitte SA: Cloud Computing 2012 Survey Results In recent times, employee expectations have changed in many ways, including availability of data, instant solutions to meet their needs, mobility and easy collaboration. They no longer have to turn to IT for the solutions they need to do their jobs. We are, therefore, experiencing a shift away from today s top-down IT decision-making approach towards end-user requirement-driven solutions. The relationship between technology and people is changing, and on-demand access to large-scale, elastic, shared computing capabilities is mandated to fuel business innovation and growth. These advancements in the IT landscape are largely driven by initiatives such as cloud computing, social media, mobile devices and broadband wireless access. November 2012 Cloud Computing, Social Media, Mobile Devices and Broadband Wireless Access 3

4 Cloud Computing Mobile Devices Social Media Broadband Access Cloud computing Cloud computing represents a new business model for innovation, for on-demand computing and accessibility. Cloud computing allows for improved IT resource optimisation, virtually unlimited scalability and greater flexibility, all at a contained cost. As a result, cloud adoption is spreading rapidly and is the foundation of readily available computing accessible from everywhere and anywhere. Social media Looking at how social media platforms like Facebook and LinkedIn are growing, it is clear that social media is changing how we conduct business functions such as marketing, customer engagements, internal ideation and collaboration in real time. Emerging trends involving mobile devices, social analytics, virtual currencies and couponing drive consumerism and the realisation of social media as a tool for innovation, education, marketing, collaboration and business management. The channel Access to the Internet, broadband and wireless provides a transactional medium that spans across industries to serve functions such as marketing, distribution and locationindependent services. Not only limited to computers or smart devices, low-end future phones can also leverage the power of wireless network access. In developing countries where infrastructure is limited, wireless network access plays an important role, as seen from the exposure of mobile banking via short message service (SMS). November 2012 Cloud Computing, Social Media, Mobile Devices and Broadband Wireless Access 4

5 The Deloitte approach is based on value creation. We assist clients to develop and implement cloud computing, at every stage throughout the cloud adoption journey. Mobile devices Mobile computing s growth is virtually unprecedented and is likely to continue in the foreseeable future. According to a recent study i, more than 1.19 billion workers (34.9% of the global workforce) will be using mobile technology by Our world is now known for multiple screens, multiple connectivity standards, high processing power, information at our finger tips, increased productivity, connectivity anywhere anytime, innovative ways of doing business and new transactional capabilities. Cloud computing, combined with social computing, mobile devices and wireless broadband access, could therefore play a prominent role in deepening customer relationships, increasing agility to achieve new market growth and accelerate innovation. Providing the multitude of benefits with the adoption of these trends, we can expect to see the rapid uptake of mobile devices and cloud computing, which could lead to an unknown and increased risk landscape, since we deal with insecure technologies. As many organisations make this radical transformation, an increasing number of them are also encouraging employees to bring their own mobile devices into the workplace. This is leading to a blurring of company and personal use. So, where do we go from here? The road ahead It is imperative to expand cloud, social media and mobile device initiatives into strategic and competitive functions. Start with a clearly defined objective in mind. This process revolves around four key steps: 1. Understand how these technologies and services align with business and IT strategic goals. 2. Understand which technologies and services are best suited for your organisation. 3. Consider key risk and potential issues. 4. Develop a comprehensive roadmap that details readiness and implementation plans. November 2012 Cloud Computing, Social Media, Mobile Devices and Broadband Wireless Access 5

6 1. Alignment to strategy Determine how cloud computing, social media, mobile devices and broadband wireless access align with business and IT strategic goals. Consider the following: Examine specific business areas and activities to establish impact (i.e. minimal investment of time and money). What business benefits can be derived by utilising new technologies, and to what degree? Is the strategy aligned with value creation (elevated growth, improved marketability, expanded market share, enhanced productivity, increased differentiation or prolonged sustainability)? 2. Platforms and capabilities Determine the current state and your capabilities related to cloud computing, social media, mobile devices and broadband wireless access. Consider the following: Examine existing applications and infrastructure (where do you already make use of these initiatives?). What type of disruption would implementing new technologies or services cause? What controls are in place to manage potential risks? What future targets or projects are in the pipeline? What are the staff implications of implementing new technology initiatives or services? Are internal IT architecture and organisational structures ready? November 2012 Cloud Computing, Social Media, Mobile Devices and Broadband Wireless Access 6

7 3. Key risks and potential issues Specific business and technology areas and activities should be analysed, focusing on the following key risk and potential issues: Cloud computing Readiness Data controls Security and privacy Audit and assurance Tax and Legal Disaster recovery Vendor lock-in IT operations Social media Data controls Technical issues Mobile devices Data controls Use Device management Security Technology Are internal IT architecture and organisation structures ready? Who owns the data? How is it to be used? Are controls in place? How is security achieved? What is the level of privacy protection? Are there risk management controls to applications and data? Can you meet needs for legal compliance and tax issues? Are data backup, retention and disaster recovery practices sufficient? Is the vendor limiting interoperability or access to your data? What IT services and applications are best suited for the cloud? Who is responsible for data governance? Are key master data elements managed? How do you: Manage social media risks? Account for new intangible assets and intellectual property? Apply revenue recognition standards to new enterprise structures and international accounting standards in other jurisdictions? Manage the volume of data and data analytics work? Deal with legal and tax issues in an emerging virtual space? Advice on tax issues related to intercompany intellectual property transfers and associated transfer pricing? How will sensitive data be restricted? Is a data classification framework in place? What will these devices be used for? Are policies and procedures formalising acceptable use of mobile devices in place? How will these devices be managed (asset lifecycle process and restricted use)? How will the security of these devices be managed and monitored (mobile OS settings, authentication, network access control, wireless connections, application security standards)? What are the technology requirements (i.e. remote control, remote access of virtual desktop solutions)? November 2012 Cloud Computing, Social Media, Mobile Devices and Broadband Wireless Access 7

8 4. Roadmap The roadmap connects the current state to the proposed final state, using the opportunity analysis and strategic decisions as the guiding principles to identify roadmap objectives and goals. Roadmap considerations IT culture Operational environment Transition cost Capability maturity Economic return Criteria definition Collective organisational values, beliefs and behaviours support the adoption of the new technology. The ability of functional units within an organisation to effectively adopt and utilise new technologies and services. The associated adoption costs, both tangible and intangible. Readiness of a capability to be migrated. The economic value of the adoption of new technologies. Bottom-line Cloud computing, social media, mobile devices and broadband wireless access are likely to continue to compose and converge the business and IT landscape, enabling organisations to serve their customers more efficiently and meet business demands in an agile way. Stepping up and taking advantage of these initiative can be an important first step on this path. November 2012 Cloud Computing, Social Media, Mobile Devices and Broadband Wireless Access 8

9 Contact us Dr Mariana Carroll Leader Cloud Computing Centre of Excellence Risk Advisory Deloitte SA Contact: Shahil Kanjee Director Technology Assurance & Advisory Risk Advisory Deloitte SA Contact: Endnotes i Worldwide Mobile Worker Population Forecast (IDC, 2009) II Deloitte SA: Cloud Computing 2012 Survey Results (Deloitte, 2012) November 2012 Cloud Computing 9

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