95% Cos Still Not Ready For Digital Transformation: Dell EMC

by CXOtoday News Desk    Apr 13, 2017

digital

Even though digital transformation is the order of the day, a recent study reveals that only 5% of large enterprise companies are equipped to meet the IT requirements of the new digital business. 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 and polled over 1000 CXOs globally accentuated that 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.”

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 organizations have achieved those different stages, based on their responses to questions about their organizations’ on-premise IT infrastructure, processes and organizational alignment.

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. These companies (96%) exceeded revenue targets last year, more than 2X the least mature, are 8X more likely than the least mature organizations 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) 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 54% of all respondents use converged or hyper-converged infrastructure to support applications and an almost equal number 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, the study said.

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; 39% have the most senior IT executive reporting directly to the CEO and nearly two-thirds of the least mature organizations indicate their line of business stakeholders view IT as a “stable service provider, but ultimately a cost center.”

“Companies today increasingly rely on technology to grow and improve all aspects of their business. However, ESG’s research found that fully ‘Transformed’ IT organizations 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’ organizations,” said John McKnight, Vice President of Research and Analyst Services, Enterprise Strategy Group.