Dell Research: Only 5 pct of large companies are 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 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 percent 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 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 percent): falls short on many – if not all – of the dimensions of IT Transformation in the ESG study;
Stage 2 – Emerging (42 percent): showing progress in IT Transformation but having minimal deployment of modern data center technologies;
Stage 3 – Evolving (41 percent): showing commitment to IT Transformation and having a moderate deployment of modern data center technologies and IT delivery methods;
Stage 4 – Transformed (5 percent): furthest along in IT Transformation initiatives.

The majority of respondents (71 percent) agree that IT Transformation is essential to ongoing business competitiveness. Of the “Transformed” companies, 85 percent 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 percent) 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 percent of all respondents use converged or hyper-converged infrastructure to support applications;
58 percent of all respondents have adopted scale-out storage systems in some capacity;
Roughly 50 percent 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 percent of all respondents have “extensive” or “established” self-service capabilities;
65 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;
43 percent 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 percent of IT organizations and their outcomes are evaluated by the C-suite or board of directors monthly, and 38 percent are evaluated quarterly;
39 percent have the most senior IT executive reporting directly to the CEO;
61 percent 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, at Enterprise Strategy Group.

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