New Research: Only 5 percent of Large Companies Prepared to Meet IT Requirements of the New Digital Business
- 71% of firms agree they will not be competitive without IT Transformation
- 95% of survey respondents are falling behind an elite set of competitors who are accelerating their digital business goals through IT Transformation
- More mature organizations are 7X more likely to recognize IT as competitive differentiator and profit center
- 96% of more mature organizations exceeded revenue targets last year, more than 2X as likely to meet revenue goals
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 organizations 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 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.
“With the Government of India’s increased focus on digitization and the surge in the number of new age companies, organizations’ Digital Transformation initiatives are unlikely to dissipate –reinforcing the need to start the IT Transformation journey immediately, which is the first step for organizations to realize their Digital Transformation goals. The survey underscores that the majority of senior leaders agree that IT Transformation is essential to ongoing business competitiveness,” said Rajesh Janey, President & Managing Director, India Enterprise, Dell EMC
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 (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 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)
- Are 7X more likely than the least mature organizations 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 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
- 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 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
- 61% of the least mature organizations 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 organizations to achieve their digital transformation goals.
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 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.”
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 organizations 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 organizations 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. Organizations must resolve this conflict between Digital Transformation goals and today’s IT reality if the business is to meet its ultimate objectives.”
Rupinder Goel, Global CIO, Tata Communications
“IT Transformation in businesses allows for – Transformation, Transparency, and Trust. It not only transforms IT infrastructure but also business models allowing for more transparency in how customers deal with organizations; thereby fostering a sense of trust. At the center of enabling a good customer experience built on trust is an IT infrastructure that is robust, flexible, and scalable; allowing companies to respond to changing customer expectations as well as market dynamics.”
Manish Choksi, President – International, Supply Chain and IT, Asian Paints
“The Fourth Industrial Revolution now enables organizations to leverage technology to go beyond mere transactions and moving to a world driven by engagement through collaboration. While organizations today prepare for the millennials of tomorrow who will drive business growth from within the organization and outside of it; it’s important that they implement a strong IT infrastructure capable of responding to evolving expectations.”
About Dell EMC IT Transformation Maturity Curve Study
The Dell EMC-sponsored research was conducted by Enterprise Strategy Group between Dec. 9, 2016, and Jan. 5, 2017, with a web-based survey of 1,000 senior IT executives, decision-making managers and staff familiar with their organizations’ current and future IT budget and spending plans and involved in their organizations’ infrastructure purchase processes. The respondents represented a variety of industries and enterprise-class organizations.
- Take the IT Transformation Self Assessment
- Read the complete ESG IT Transformation Maturity Curve research paper
- Dell EMC Executive Blog: “1,000 IT Practitioners Answer: Where Are We with IT Transformation?”
- Dell EMC Services Blog: “Defeating Digital Disruption Through IT Transformation”
- Connect with Dell EMC via Twitter, Facebook, YouTube, LinkedIn and DECN
About Dell EMC
Dell EMC, a part of Dell Technologies, enables organizations to modernize, 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.
The statistics in this release represent the primary research data included in the overall results of the Enterprise Strategy Group (ESG) 2017 IT Transformation Maturity Curve study provided to and commissioned by Dell EMC. The published report has been edited for brevity.