Strategy, Risk & Governance

Exponential IT defined
• The technology curve has recently bent exponentially.
• AI has been the catalyst, but there are more and more new technologies emerging (e.g. quantum
computing, 5G), putting significant pressure on all IT organizations.
• All IT leaders and organizations are at risk of falling behind by not adopting new technologies fast
enough.
• Exponential IT is a framework defined by Info-Tech Research Group to instruct IT leaders across all
IT domains on how to elevate their maturity and value creation capabilities and close the gap
between the exponential progression of technological change and the linear progression of IT’s
ability to successfully manage that change.

© INFO-TECH RESEARCH GROUP 2

Info-Tech Research Group 3
Analyst
Perspective In an era defined by unprecedented technological innovation and rapid
advancement brought about by AI and other emerging technologies, the
In an exponential world, IT landscape of information technology is evolving at an astonishing pace. These
is the business. technologies have ushered in unparalleled opportunities as well as risks.
In response, we envision a transformed view of the organization, where IT is
embedded within the business, co-owning business outcomes, and driving growth
whether organically through technology initiatives or inorganically through
mergers and acquisitions (M&A). We see data and technology as central to
driving competitive advantage as well as an increased focus on embedding ESG
principles.
Additionally, information and technology governance will be incorporated within
the organizational governance framework and an integrated enterprise risk
management model will be in place, which preempts risks, formulates responses,
Carlene McCubbin Anubhav Sharma and is also nimble enough to respond to unknown risks brought about by these
AVP, Research Development, Research Director emerging technologies.
Info-Tech Research Group CIO Strategy,
Info-Tech Research Group In such an environment, “status-quo” is not an option, the only choice is whether
to get ahead of the curve and gain an advantage or be left behind, with disastrous
results.

Info-Tech Research Group | 5

Exponential technology advancements
74% 25%
are redefining the IT curve:
• There will no longer be an IT strategy; instead, there will be an enterprise 74% of IT decision-makers 25% of respondents say
in North America say their acquiring technology, talent,
strategy that is led by technology, and the IT operations model will evolve organization has new production capabilities
from mostly centralized to being federated and hybrid. successfully decentralized or innovative startups is their
their IT structures. main strategic driver for
• Technology leaders will own business outcomes, and their performance M&A.
will be measured on business growth targets, which will necessitate Source: Manage Engine, 2022. Source: Ernst & Young, 2021.

changes to CIO compensation models.

• M&A activities focused on acquiring technology capabilities will increase,
and post-merger technology integration efforts will be key in driving value
realization. 76% 38%
• AI and other emerging technologies' impacts on ESG might result in
potential compliance concerns. Hence, building ESG into how technology
operates and providing transparency on ESG-related activities will become 76% of consumers say they 38% of CEOs identified
will discontinue their enhancing performance and
a key economic imperative. relationship with companies productivity through data, tech,
that treat the environment, and AI as a focus area for
• Regardless of industry, data and technology will become the primary employees, or the driving growth in next three
means of driving your competitive advantage. community in they operate years.
poorly.
Source: PwC, 2021. Source: BusinessWire, 2023.

© INFO-TECH RESEARCH GROUP 6

Exponential technology advancements 89% of strategy
leaders say their
are redefining the IT curve: organizations plan to
improve speed in
adapting to change
89% and disruption.
• Governance of information and technology will be embedded into your Complex
enterprise governance framework. Technology leaders will need to be active governance/approval
participants in all areas of governance. processes are listed
as a chief
• A fully integrated enterprise risk management model will be in practice,
Source: Planview, 2021. hinderance.
which not only preempts strategic risks across technology and
nontechnology domains but also autonomizes the right response through AI.
“48% of risk professionals thought AI could
• Risk from emerging technologies will be nonlinear and harder to predict. IT improve internal efficiency whereas 35%
governance and risk will need to be adaptable and nimble enough to address thought it might help departments keep abreast
the unknown. of upcoming legislation and regulations.”
Source: Thomas Reuters Institute, 2023.
• The use of AI to manage, identify, and address convergent risks – multiple
material risks coming together in unexpected ways – will be one of the most
important AI use cases due to the unpredictable nature of emergent risk.

© INFO-TECH RESEARCH GROUP 7

Strategy, Risk & We recommend key actions to help you lean into the curve and
manage this change:
Governance
Stop being pulled, start pushing
1
Co-own organizational outcomes.

Own your seat at the table

2
Lead new technology governance.

Do more valuable work

3
Transform infrastructure and applications into utilities.

Leverage risk’s potential

4
Integrate IT & enterprise risk management into all practices.

© INFO-TECH RESEARCH GROUP 8

 1 Stop being pulled, start pushing
Co-own organizational outcomes

IT services will get even more commoditized and outsourced/out-tasked. IT leaders will
spend much less time strategizing about the delivery of applications and much more time
on organizational outcomes.

© INFO-TECH RESEARCH GROUP 9

Related Info-Tech Research:
Embed Business Relationship
Management in IT
Show that IT is worthy of Trusted
Partner status.
Go to this link
© INFO-TECH RESEARCH GROUP
How can IT demonstrate it is adopting an Exponential IT
mindset related to this change?
In the near term:
• Set the stage to co-own targets
Promote a collaboration mindset between organizational divisions and IT, and
communicate your intention to co-own organizational targets.
• Engage and align with the broader organization
Understand your organizational goals and objectives through ongoing engagement
with the broader organization, and ensure alignment of your technology initiatives
with those goals.
• Modernize performance measures
Shift IT performance reporting from activity and status updates to reporting on the
achievement of organizational goals, including reporting on the value achieved
through technology and the health of the technology investment portfolio.
10

“We envision a transformed view of the
organization, where IT is embedded within
the business, co-owning business
outcomes, and driving growth whether
organically through internal technology
initiatives or inorganically through M&A.”
Anubhav Sharma
Research Director, CIO
Strategy
Info-Tech Research Group
© INFO-TECH RESEARCH GROUP
How can IT demonstrate it is adopting an Exponential IT
mindset related to this change?
In the long term:
• Co-own organizational outcomes
Co-own organizational targets with organizational divisions and align compensation models
to deliver them.
• Technology-led innovation
Drive technology-led innovation initiatives in the organization to transform capabilities. In
fact, data and technology become so vital to creating value that a path to CEO can become
apparent for IT leaders.
• Cocreation of products/services
Cocreate organizational products/services with other business stakeholders. This requires that
technology leaders develop relationships and work mechanisms with the broader organization
as technology becomes embedded with the broader organization.
• Propose M&A opportunities and drive integration
Actively look for and propose M&A opportunities to the board/CEO that enhance the
organization’s technology capabilities and drive post-M&A integration efforts.
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 2 Own your seat at the table
Lead new technology governance

Near term, IT takes a leadership role in consultation with the organization for governance
over the responsible use of new technologies throughout the organization. Longer term,
governance needs to be adaptive to the new ways of working.

© INFO-TECH RESEARCH GROUP 12

Related Info-Tech Research:
Address Security and Privacy Risks for
Generative AI
AI risk mitigation starts with an
acceptable use policy.
Go to this link
© INFO-TECH RESEARCH GROUP
How can IT demonstrate it is adopting an Exponential IT
mindset related to this change?
In the near term (1 of 2):
• Adjust existing governance mechanisms
Work closely with the board and corporate governance mechanisms in
the organization to receive delegation of authority to create new
technology adoption governance committees.
• Define responsible AI guidelines
Align and communicate ethical and tactical guidelines for the
responsible use of AI and other new technologies.
• Support ESG reporting
Define the data model to support ESG planning and measurement, and
make ESG data transparent through dashboards and reports.
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Related Info-Tech Research:
The ESG Imperative and Its Impact on
Organizations
Enable an active response to changing
conditions.
Go to this link
© INFO-TECH RESEARCH GROUP
How can IT demonstrate it is adopting an Exponential IT
mindset related to this change?
In the near term (2 of 2):
• Highlight potential conflicts
Identify and define the constraints or guardrails that will help prevent
new and disruptive technologies from jeopardizing the organization.
Make recommendations and inform organizational leadership via
corporate governance mechanisms.
• Distribute layers of governance
IT leadership governance cycles must speed up through more distributed
layers of governance enabling parts of the organization to move faster.
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Related Info-Tech Research:
Make Your IT Governance Adaptable
Governance isn’t optional, so keep it
simple and make it flexible.
Go to this link
© INFO-TECH RESEARCH GROUP
How can IT demonstrate it is adopting an Exponential IT
mindset related to this change?
In the long term (1 of 2):
• Enable integrated governance
Fully embed technology governance into the enterprise governance
structure, and ensure technology leaders are part of all areas of
governance.
• Make governance adaptable
The idea of a single monolithic style of governing is over. In times of
exponential change and opportunity, governance must be dynamic,
responsive to need, and it must enable agility though delegated authority
and empowerment with enterprise guardrails.
15

“Success in modern digital organizations
depends on their ability to adjust for
velocity and uncertainty, requiring a
dynamic and responsive approach to
governance – one that is embedded and
automated in your organization to enable
new ways of working, innovation, and
change.”
Valence Howden
Principal Research Director
Info-Tech Research Group
© INFO-TECH RESEARCH GROUP
How can IT demonstrate it is adopting an Exponential IT
mindset related to this change?
In the long term (2 of 2):
• Govern by design
Automate more and more of your governance by embedding decision-
making and controls into your work practices – allowing for fluid
execution and only governing at key milestones or exceptions.
• Master ESG governance
Use AI to collect and process ESG data from various sources, keep an
eye on changing ESG developments, and identify ESG risks,
opportunities, and emerging issues.
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 3 Do more valuable work
Transform infrastructure and applications into utilities

IT shifts focus from managing IT assets to managing value and risk, thereby focusing on
maturing data, security, risk, and vendor management practices.

© INFO-TECH RESEARCH GROUP 17

Related Info-Tech Research:
Manage Exponential Value
Relationships
Assess your capabilities to undertake
a new model of vendor relationships
and drive exponential IT.
Go to this link
© INFO-TECH RESEARCH GROUP
How can IT demonstrate it is adopting an Exponential IT
mindset related to this change?
In the near term:
• Shift in resourcing focus
Gradually shift resourcing from internal operations to vendor-related
services including infrastructure-as-a-service and application vendors.
• Mature key capabilities
Focus on maturing data, security, risk, and vendor management practices
that are critical to creating and protecting organizational value by using
new technologies.
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Related Info-Tech Research:
Implement the Next-Generation IT
Operating Model
The operating model for
organizations embracing Exponential
IT and transforming into technology-
first enterprises.
Go to this link
© INFO-TECH RESEARCH GROUP
How can IT demonstrate it is adopting an Exponential IT
mindset related to this change?
In the long term:
• Reflect changes in operations
Reflect changes in operations, governance, procurement, risk, and skill
management as IT moves from operating assets to consuming vendor-
centric capabilities.
• Invest in best-in-class practices that matter
Seek differentiation on data and security management practices,
supported by best-in-class skills and tools.
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 4 Leverage risk’s potential

Integrate IT & enterprise risk management into all practices

IT ensures technology risk is integrated with enterprise risk management and is adaptable
in nature to address known and unknown risks.

© INFO-TECH RESEARCH GROUP 20

Related Info-Tech Research: How can IT demonstrate it is adopting an Exponential IT
Integrate IT Risk Into Enterprise Risk
mindset related to this change?
In the near term:
Don’t fear IT risks, integrate them.
• Be risk-aware, not risk-afraid
In conjunction with enterprise risk, technology leaders must embed a risk-aware
(and non-fear) mindset. Security is only one element of risk – strategic, third-
party, talent, and data risks will become increasingly impactful. How you manage
these risks can become a competitive advantage!

• Integrate IT and enterprise risk practices

Start to integrate IT and enterprise risk management practices leading to a
comprehensive and holistic approach to risk assessment and mitigation.
Go to this link
• Implement AI-enabled GRC and IRM tooling
Review opportunities to implement new GRC or IRM solutions that allow you to
identify, predict, and address convergent risk in real time. Without this, it will be
impossible to effectively manage risk.

© INFO-TECH RESEARCH GROUP 21


“When risk is integrated into the
organization’s enterprise risk management
program, it enables a single view of all
risks and the potential impact of each risk
event. More importantly, it provides a
consistent view of the risk event in relation
to uncertainty that might have once been
seemingly unrelated to IT.”
Valence Howden
Principal Research Director
Info-Tech Research Group
© INFO-TECH RESEARCH GROUP
How can IT demonstrate it is adopting an Exponential IT
mindset related to this change?
In the long term:
• Be prepared for the unknowable
Risk from emerging tech will be nonlinear and thus will be harder to predict and
act on. Mature enterprise risk practices to focus on nimble responses for when
unknown material risks emerge.
• Build an integrated risk management practice
Fully integrate risk data and practices across the enterprise, moving from reactive
to strategic risk identification. Integrated risk management practices should be
able to predict risks and suggest associated actions that allow the enterprise to
move quicker when risks arise.
• Establish embedded controls
Shift to compliance-by-design and prepare to automate compliance by embedding
controls into all your business processes and lifecycles, leveraging AI powered
tooling to manage controls.
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 Bibliography

“2023 Risk & Compliance Report.” Thomson Reuters Institute, 10 Oct. 2023. Accessed November 2023.

“CEOs Identify Combination of Data, Technology and People as Future Growth Driver, Yet Only 5% of Organizations
Realizing Its Value.” BusinessWire, 17 Jan. 2023. Accessed November 2023.

“ESG Consumer Intelligence Series Survey 2021.” PricewaterhouseCoopers (PwC), 2 June 2021. Accessed November
2023.

Guerzoni, Andrea, et al. “Global Capital Confidence Barometer 2021.” Ernst & Young, 3 Feb. 2021. Accessed
November 2023.

“IT at Work: 2022 and Beyond.” Manage Engine, 2022. Accessed November 2023.

“The State of Strategy Execution: Embracing Uncertainty to Adapt at Speed.” Planview, 2021. Accessed November
2023.

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© INFO-TECH RESEARCH GROUP 24