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New Research: Only 5% of Large Companies Prepared to Meet IT Requirements of the New Digital Business

 Dell EMC announced the results of a new study conducted by Enterprise Strategy Group (ESG), which revealed that a majority of senior IT leaders and decision-making managers of large companies surveyed around the world indicate their organisations have yet to fully embrace the aspects of IT Transformation needed to remain competitive.

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 organisations 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 organisations are still measuring 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 optimise 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 organisations progress in their IT Transformation investments, they can overcome the conflict between legacy IT and digital business initiatives to realise their goals, speed time to market and increase competitiveness.”

“As organisations in the Asia Pacific and Japan region look at ways to reinvent their business models to thrive in the digital age, an optimised IT infrastructure that is agile and customer-focused is essential. The findings of this research highlight the importance of organisations’ 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.

A separate, independent study found that Malaysia’s IT spending is forecast to reach RM71.7 billion in 2017, an increase of 8% over 2016. Spending is forecast to increase for the Data Center Systems, Software and IT services segments, among others, driven by technology trends such as cloud and digital business.

The ESG 2017 IT Transformation Maturity Curve study was designed to understand the role that IT Transformation plays toward becoming a digital business. ESG employed a research-based, data-driven maturity model to identify different stages of IT Transformation progress and determine the degree to which global organisations have achieved those different stages, based on their responses to questions about their organisations’ on-premise IT infrastructure, processes and organisational alignment.

Based on the global survey responses, the 1,000 participating organisations 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 (41%): showing progress in IT Transformation but having minimal deployment of modern data center technologies
  • Stage 3 – Evolving (42%): 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 organisations 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” organisations 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. These companies:

  • (96%) Exceeded revenue targets last year, more than 2X the least mature
  • Are 8X more likely than the least mature organisations to report a highly cooperative relationship between IT and the business
  • Made “excellent progress” running IT as a profit center rather than a cost center (7X more likely than the least mature)
  • Are 7X more likely than the least mature organisations to have IT viewed by the business as a competitive differentiator
  • Leverage IT resources to speed product innovation and time to market (6X more likely than the least mature organisations)

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:

  • 54% of all respondents use converged or hyper-converged infrastructure to support applications
  • 58% 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

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:

  • 26% of all respondents have “extensive” or “established” self-service capabilities
  • 65% 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
  • 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:

  • 36% of IT organisations and their outcomes are evaluated by the C-suite or board of directors monthly, and 38% are evaluated quarterly
  • 39% have the most senior IT executive reporting directly to the CEO
  • 61% of the least mature organisations indicate their line of business stakeholders view IT as a “stable service provider, but ultimately a cost center”

At Dell EMC World in May 2017, experts will explore IT Transformation and how it enables organisations to achieve their digital transformation goals.

Supporting Quotes:

John McKnight, Vice President of Research and Analyst Services, Enterprise Strategy Group

“Companies today increasingly rely on technology to grow and improve all aspects of their business. However, ESG’s research found that fully ‘Transformed’ IT organisations are admittedly rare at this time. The good news is that there are incremental benefits to be had by making any progress along the maturity curve, which can be achieved by emulating the behaviors of these ‘Transformed’ organisations.”

Adam DeMattia, Director of Research, Enterprise Strategy Group

“Legacy IT is largely unprepared to meet the requirements of the new digital business: application cycle times measured in months, if not years; siloed infrastructure that prohibits organisations from viewing their data holistically; performance bottlenecks that impact end-user experience in a world that demands constant availability and response times; rigid architectures that force organisations to make forklift upgrades as requirements change; and traditional provisioning processes in which IT is often seen as a barrier rather than an enabler for the business. Organisations must resolve this conflict between Digital Transformation goals and today’s IT reality if the business is to meet its ultimate objectives.”

Anthony Griffiths, Technology Solutions Unit, Forest Fire Management, Victoria, Australia

“Critical emergency services such as attending to frequent bushfires, requires real-time, agile, and resilient platforms. A foundation that has these characteristics is imperative for our business to meet its digital transformation goals. While focused on modernising infrastructure, increasing performance and securing our services; We also spent time reviewing internal processes and organisational relationships to enable the transformation to DevOps. As a result, our government agency is a “digital supermart” of sorts; one that is agile, flexible, innovative, user-oriented, and customer-focused.”

 

About Dell EMC IT Transformation Maturity Curve Study

The Dell EMC-sponsored research was conducted by Enterprise Strategy Group between 9 December 2016, and 5 January 2017, with a web-based survey of 1,000 senior IT executives, decision-making managers and staff familiar with their organisations’ current and future IT budget and spending plans and involved in their organisations’ infrastructure purchase processes in the U.S., Brazil, the United Kingdom, Germany, France, China, Japan and Australia. The respondents represented a variety of industries and enterprise-class organisations.

Additional Resources:

Dell EMC

Dell EMC, a part of Dell Technologies, enables organisations to modernise, automate and transform their data center using industry-leading converged infrastructure, servers, storage and data protection technologies.  This provides a trusted foundation for businesses to transform IT, through the creation of a hybrid cloud, and transform their business through the creation of cloud-native applications and big data solutions.  Dell EMC services customers across 180 countries – including 98 percent of the Fortune 500 – with the industry’s most comprehensive and innovative portfolio from edge to core to cloud.

Dell EMC World

Dell EMC World 2017, May 8-11, is Dell Technologies’ flagship event, bringing together technology and business professionals to network, share ideas and help co-create a better future. Learn more at www.dellemcworld.com and follow #DellEMCWorld on Twitter.

 




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