The end of the year is a perfect time to be looking forward, of course those of you who have the joy of budgeting have no doubt been looking forward for the last couple of months, this column aims to be a more pleasurable experience. What trends should chief information officers be considering in 2017?

Ransomware

The virus type software that uses strong encryption to encrypt the files of both companies and individuals so that they can be held for a ransom has grown in frequency and has become more targeted in 2016. With the success that organised crime has had with this business model; I fully expect that it will continue into 2017, but expect some new developments, we’ve recently seen the development of the pyramid scheme ransomware “enhancement”, which is likely to see an increase in the spread and infection rate of these things.

How can you protect yourself and your company? Raise the awareness of the risks (run an awareness session for everyone from the chairman down), how malware is spread, and how it can be avoided. In addition, and where possible implement restrictions to prevent people from opening such files, and lock down USB ports to prevent infection from “thumb drives”.

Blockchain and Smart Contracts

Blockchain is a technology that utilises encryption and multiple (and distributed) servers to provide an “ownership” ledger. This is the technology behind the digital currency bitcoin which uses it to prove ownership of the bitcoins. This technology is being investigated (and implemented) by many organisations within numerous sectors to prove ownership, but also to prove history and provenance.

Smart contracts are contracts that allow something to occur when a certain condition is met. An often-quoted example is that of a traveller whose air travel is delayed, luckily they have bought travel insurance to cover such a scenario. In such a case, a smart contract could be put in place to monitor the conditions of the insurance policy (such as flight delays), and then act when information is received from credible sources (such as the airline).

In the case of our delayed traveller it would mean that their claim is processed without their having to submit a claim form or additional evidence, thus reducing their inconvenience, but importantly for the insurer, the cost of processing such claims is further reduced.

The financial-services sector is one of the largest investors in blockchain, there will be further research in 2017 as well as pilot implementations, if your business isn’t already considering ways that blockchain technology can help your business and its value chain, 2017 is definitely the year to start.

Big Information

Big data (collecting large volumes of data often from a variety of sources), has been a buzzword for the last few years. The piece that I believe has been missing though is turning that data into information. Many organisations have not suffered a challenge in collecting data about their clients or customers, Tesco (the large UK-based retailer) regularly collects information about approximately 40 per cent of the UK population’s purchases and buying habits through its loyalty programme. Most organisations don’t personally collect the levels of information that a loyalty programme offers; but few are turning their data into information. That I believe will change, gathering pace in 2017, with more organisations recognising the value of the data that they have, as well as the opportunities that joining that data with other commercially available data sources.

The key to gaining value from your big data and turning it into big information, is understanding what you have, and having the skills and capability to perform the analysis required to transform data into information. Some organisations recognising this need and the importance, and potential business differentiator that information brings have gone as far as to appoint a chief data officer, with others taking advantage of CDO as a service to help get them started.

Data Protection

As the world moves towards big information, data protection has never been more important. 2017 will see many organisations who deal have customers in the European Union looking at their data protection requirements in the wake of GDPR (General Data Protection Regulation), the EU regulation that means that any organisation that deals with the data of EU residents (no matter where the company is based) must abide by the regulation, or face fines up to the greater of 20 million euros (approximately $21 million) or 4 per cent of annual global revenue.

The regulation becomes law in May 2018, which while seeming like a long time away, it really isn’t due to the nature of some of the changes that may be required to computer systems to ensure adherence with the data subject rights. And that mean organisations will need to schedule changes into an already busy change agenda.

Efficiency and Innovation

Organisations are always striving for profits, but profits can be increased in many ways, all of which have a degree of resistance. Efficiency (the ability to do more with less resources) is something that most organisations strive for. CIOs and the right IT systems can help companies become more efficient. Some organisations as an example of how IT can be the cause and the solution, still suffer from the efficiency traps such as rekeying data between systems. The role of the CIO is always changing, but today’s CIO needs to be far more closely aligned with the business and the needs to the business rather than a provider of services to the business.

Innovation is another way that organisations are looking to increase their profits. Innovation comes in many different forms though, with those organisations that do it well having someone in the C-suite who is responsible (often the CIO but the title of chief innovation officer is also becoming more common) they also have an innovation programme that encourages people throughout the company to get involved in innovating and helping the organisation to improve. An interesting side-effect of the whole company being involved is the increased engagement that is felt across the organisation as people feel that they can input into the future direction of the company in a very tangible way.

To learn more about some of these topics, subscribe to the Fifth Step Podcast available on iTunes or from http://podcast.fifthstep.com.

Thank you for reading these columns during 2016, I wish you a prosperous New Year.

Darren Wray is the chief executive officer of Fifth Step and has more than 25 years of IT and management experience within the financial services and other sectors. Fifth Step operates globally from its offices in Bermuda, London and New York, providing IT leadership, change management, governance services to executives and senior managers within insurance, investment, legal and banking organisations of all sizes.