Organisations overhauling IT will leapfrog competition

Today’s business landscape is rife with disruption, much of it driven by organisations using technology in new or innovative ways. In order to survive and thrive in today’s digital world, businesses are implementing new technologies, processes and skillsets to best address changing customer needs. A fundamental first step to this change is transforming IT, to help organisations bring products to market faster, remain competitive and drive innovation. According to ESG’s 2018 IT Transformation Maturity Study [ii] commissioned by Dell EMC and Intel:

• 81 percent of survey respondents agree if they do not embrace IT Transformation, their organisation will no longer be competitive in their markets, up from 71 percent in 2017.

• 88 percent of respondents say their organisation is under pressure to deliver new products and services at an increasing rate.
• Transformed organisations are 22x as likely to be ahead of the competition when bringing new products and services to market.
• Transformed organisations are 2.5x more likely to believe they are in a strong position to compete and succeed in their markets over the next few years.
• Transformed companies are 18x more likely to make better and faster data-driven decisions than their competition and are 2x as likely to exceed their revenue goals.

“Data is the new competitive edge – yet it’s become highly distributed across the edge, the core data center and cloud. Organisations realise they have to move quickly to turn that data into business intelligence – requiring an end-to-end IT infrastructure that can manage, analyse, store and protect data everywhere it lives,” said Jeff Clarke, Vice Chairman, Products and Operations, Dell Technologies. “We’re in the business of better business outcomes, giving our customers the ability make that end-to-end strategy a reality, driving disruptive innovation without the fear of being disrupted themselves.”

The ESG 2018 IT Transformation Maturity Study

The ESG 2018 IT Transformation Maturity Study follows the seminal study commissioned by Dell EMC, the ESG 2017 IT Transformation Maturity Study, and was designed to provide insight into the state of IT Transformation, the business benefits fully transformed companies experience, and the role critical technologies have in an IT Transformation. 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’ adoption of modernised data center technologies, automated IT processes and transformed organisational dynamics.

“Companies today need to be agile to stay competitive and drive growth, and IT Transformation can be a major enabler of that,” said John McKnight, Vice President of Research, Enterprise Strategy Group. “It’s clear that IT Transformation is increasingly resonating with companies and that senior executives recognise how IT Transformation is pivotal to overall business strategy and competitiveness. While achieving transformation can be a major endeavour, our research shows ‘Transformed’ companies experience real business results, including being more likely to be ahead of the competition in bringing new products and services to market, making better, faster data-driven decisions than their competition, and exceeding their revenue goals.”

This year’s 4,000 participating organisations were segmented into the same IT Transformation maturity stages:

• Stage 1 – Legacy (6 percent): Falls short on many – if not all – of the dimensions of IT Transformation in the ESG study.
• Stage 2 – Emerging (45 percent): Showing progress in IT Transformation but having minimal deployment of modern data center technologies.
• Stage 3 – Evolving (43 percent): Showing commitment to IT Transformation and having a moderate deployment of modern data center technologies and IT delivery methods.
• Stage 4 – Transformed (6 percent): Furthest along in IT Transformation initiatives.

This year’s findings show organisations are progressing in IT maturity and generally believe transformation is a strategic imperative.

• 96 percent of respondents said they have Digital Transformation initiatives underway – either at the planning stage, at the beginning of implementation, in process, or mature.
• Respondents whose organisations have achieved Transformed status are 16x more likely to have mature Digital Transformation projects underway versus Legacy companies (66 percent compared with 4 percent).

• Transformed organisations were more than 2x as likely to have exceeded their revenue targets in the past year compared with Legacy organisations (94 percent compared to 44 percent).
• 84 percent of respondents with mature Digital Transformation initiatives underway said they were in a strong or very strong position to compete and succeed.

IT Transformation maturity can accelerate innovation, drive growth, increase IT efficiency and reduce cost. More specifically:

• Transformed organisations are able to reallocate 17 percent more of their IT budget toward innovation.
• They complete 3x more IT projects ahead of schedule and are 10x more likely to deploy the majority of their applications ahead of schedule.
• Transformed organisations also report they complete 14 percent more IT projects under budget and spend 31 percent less on business-critical applications.

Making IT Transformation and Digital Transformation Real

Organisations like Texas-based Rio Grande Pacific understand IT Transformation benefits first-hand. The company has branched from a railroad holding company – moving and physically handling railcars – into a provider of technology services for other short line railroads and commuter operations. Rio Grande Pacific pursued IT Transformation to support its aggressive growth. By modernising its data center, the company has increased speed of services tenfold, experienced a 93 percent reduction in data center electricity use, significantly improved rack performance and provisioning time, and created a new business – the “RIOT” domain or Railway Internet of Things.

“As part of a 150-year-old industry, we recognise that the future of rail is tied to technology,” said Jason Brown, CIO, Rio Grande Pacific. “Railroads are in need of real-time information in order to make rapid decisions. Combining several systems into one single dashboard though our RIOT domain provides a holistic view to customers and helps keep the trains running on time. These new services, using the most modern technology, sets Rio Grande Pacific apart from the competition and has led to strong growth.”

Bank Leumi, Israel's oldest and leading banking corporation, is also experiencing the benefits of IT Transformation, bringing to life its mobile-only bank, Pepper. The organisation set out to create a platform that provides customers with a better experience, engages them quicker and reaches a new generation of clients. In order to do this, the company needed a faster, more flexible infrastructure and began leveraging a hybrid cloud model and software-defined data center. This has allowed them to move code from development to production within hours, compared to weeks, establish new environments faster and do this at less cost. This has helped them to bring a new, innovative product to market.

“We are in the midst of an era of digital disruption, where customer demands and expectations are changing rapidly,” said Ilan Buganim, Chief Technology and Chief Data Officer, Bank Leumi. “We as a bank need to adapt ourselves and continue providing a superior customer experience. We saw the opportunity to do this with our new mobile-only bank, ‘Pepper.’ Moving to a hybrid cloud model and a software-defined data center environment provided the infrastructure needed for real-time banking, with the ability to run fast and to shortcut the time to deliver new functionalities - thus making this new customer experience possible.”