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

Dell EMC has 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 per cent 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 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 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.”

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 organisation’s on premise IT infrastructure, processes and organisational alignment.

Catherine Doyle, Enterprise Sales Director, Dell EMC Ireland said: “This research points up the need for organisations to fully embrace IT Transformation to remain competitive. A divide is opening up between companies that have already turned to modern data centre technologies and IT delivery methods, and those which have yet to deploy digital business initiatives. The simple fact is that a failure to transform could mean that organisations get left behind. Dell EMC is working with organisations to help them keep pace by applying the learnings of industry peers which are the furthest along the IT Transformation Maturity Curve.”

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 per cent): Falls short on many – if not all – of the dimensions of IT Transformation in the ESG study

• Stage 2 – Emerging (42 per cent): Showing progress in IT Transformation but having minimal deployment of modern data center technologies
• Stage 3 – Evolving (41 per cent): Showing commitment to IT Transformation and having a moderate deployment of modern data center technologies and IT delivery methods
• Stage 4 – Transformed (5 per cent): Furthest along in IT Transformation initiatives

The majority of respondents (71 per cent) agree that IT Transformation is essential to ongoing business competitiveness. Of the “Transformed” companies, 85 per cent 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 per cent 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 per cent) Exceeded revenue targets last year, more than two times the least mature
• Are eight times 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 (seven times more likely than the least mature)
• Are seven times 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 (six times 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 per cent of all respondents use converged or hyper-converged infrastructure to support applications
• 58 per cent of all respondents have adopted scale-out storage systems in some capacity
• Roughly 50 per cent 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 per cent of all respondents have “extensive” or “established” self-service capabilities
• 65 per cent 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 per cent 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 per cent of IT organisations and their outcomes are evaluated by the C-suite or board of directors monthly, and 38 per cent are evaluated quarterly
• 39 per cent have the most senior IT executive reporting directly to the CEO
• 61 per cent 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.