A majority of senior IT leaders and decision-making managers of large companies surveyed around the world indicate their organizations have yet to fully embrace the aspects of IT Transformation needed to remain competitive, according to a new study conducted by Enterprise Strategy Group (ESG).
While there is a clear imperative for companies to transform their legacy IT, digital transformation is becoming the driving force to making IT Transformation a top priority.
However, the ESG 2017 IT Transformation Maturity Curve study commissioned by Dell EMC shows 95% of survey respondents indicate their organizations are at risk of falling behind a smaller group of industry peers that are transforming their IT infrastructures, processes and delivery methods to accelerate their goals of becoming digital businesses.
Many organizations still measure application cycle times in months, if not years; have siloed infrastructures; and continue to grapple with rigid legacy architectures – all barriers to undertaking a successful digital transformation.
“These findings mirror how the vast majority of customers are telling us they need to optimize their existing infrastructures to take advantage of digital-age opportunities,” said David Goulden, President of Dell EMC. "However, the research shows that most respondents are falling behind a small and elite set of competitors who have cracked the IT Transformation code, and they’re competing more vigorously because of it. As organizations progress in their IT Transformation investments, they can overcome the conflict between legacy IT and digital business initiatives to realize their goals, speed time to market and increase competitiveness.”
“As organizations in the Asia Pacific and Japan region look at ways to reinvent their business models to thrive in the digital age, an optimized IT infrastructure that is agile and customer-focused is essential. The findings of this research highlight the importance of organizations’ understanding where they are today in terms of IT transformation maturity. This is a critical first step to achieving their digital transformation goals,” said Paul Henaghan, President, South Asia & Korea, Dell EMC.
Four maturity stages
Based on the global survey responses, the 1,000 participating organizations were segmented into the following four IT Transformation maturity stages:
- Stage 1 – Legacy (12%): falls short on many – if not all – of the dimensions of IT Transformation in the ESG study
- Stage 2 – Emerging (42%): showing progress in IT Transformation but having minimal deployment of modern data center technologies
- Stage 3 – Evolving (41%): showing commitment to IT Transformation and having a moderate deployment of modern data center technologies and IT delivery methods
- Stage 4 – Transformed (5%): furthest along in IT Transformation initiatives
The majority of respondents (71%) agree that IT Transformation is essential to ongoing business competitiveness. Of the “Transformed” companies, 85% believe their organizations are in a "very strong" or "strong" position to compete and succeed in their market over the next few years contrasted with 43% of the least mature companies.
The “Transformed” organizations report the most progress in leveraging IT resources to speed product innovation and time to market; automating manual processes and tasks; and running IT as a profit center rather than a cost center. ‘
A majority (96%) of these companies exceeded revenue targets last year, more than 2X the least mature. Transformed companies are also 8X more likely than the least mature organizations to report a highly cooperative relationship between IT and the business.
The report also revealed that transformed companies made “excellent progress” running IT as a profit center rather than a cost center (7X more likely than the least mature). They are also 7X more likely than the least mature organizations to have IT viewed by the business as a competitive differentiator; and leverage IT resources to speed product innovation and time to market (6X more likely than the least mature organizations)
According to ESG, the adoption of modern data center technologies, such as scale-out storage systems and converged/hyper-converged infrastructure, can improve the agility and responsiveness of infrastructure provisioning, IT project delivery and application development.
The study found that 54% of all respondents use converged or hyper-converged infrastructure to support applications. Fifty-eight percent of all respondents have adopted scale-out storage systems in some capacity. Roughly 50% of respondents are committed to software-defined as a long-term strategy and have begun to implement, evaluate or plan for software-defined technologies.
Self-service provisioning
According to ESG, the adoption of modern IT processes - such as self-service provisioning capabilities, running IT like a public cloud and use of DevOps methodologies - can be an attribute of a successfully transformed company.
The study found that 26% of all respondents have “extensive” or “established” self-service capabilities. Sixty-five percent of all respondents have made “excellent” or “acceptable” progress toward providing end users with the same ability to provision IT resources that they can get from a public cloud provider. Meanwhile, 43% of respondents claim “extensive” or “good” adoption of formal DevOps principles and best practices.
IT Transformation is often correlated with a more cooperative and effective relationship between IT and the business, which was validated by the research.
The study found that 36% of IT organizations and their outcomes are evaluated by the C-suite or board of directors monthly, and 38% are evaluated quarterly. Thirty-nine percent have the most senior IT executive reporting directly to the CEO. Sixty-one percent of the least mature organizations indicate their line of business stakeholders view IT as a “stable service provider, but ultimately a cost center.”