What’s Life Like for Digitally Transformed Businesses?
Value-wise, digital transformation is often discussed using somewhat nebulous concepts, such as agility, modernization, etc. While certainly intriguing, those terms provide little tangible insight into what organizations can expect should they pursue this trend more fully. That doesn’t mean, however, there aren’t plenty of examples of that more concrete vision of what life can look like with digital transformation.
One such example is a white paper commissioned by Dell EMC and executed by ESG entitled How IT Transformation Maturity Drives IT Agility, Innovation, and Improved Business Outcomes. This reports showcases multiple inside examples of what it means to be “digitally-transformed.”
Let’s take a closer look at some of the paper’s findings regarding the differing experiences had by those who’ve embraced digital transformation and those who remain committed to legacy solutions and processes.
Finding #1: Project Efficiency
Transformed companies are more likely to complete their IT project within or ahead of a desired timeframe than their legacy rivals. Transformed companies are more than 3x more likely to complete a project ahead of schedule than a legacy business (34% of projects completed early versus just 11.3%). Another notable gap exists in terms of the percentage of projects completed behind schedule. Here, just 21% of projects completed by transformed businesses wrapped up late compared to 35% of those undertaken by legacy businesses.
Time is critical when it comes to technology projects. Project delays don’t just cost the business financially, they can also do considerable damage to IT’s reputation. Should those on the business side lose faith in IT’s ability to efficiently get the job done, it may give rise to potentially dangerous Shadow IT initiatives.
Finding #2: Cost Effectiveness
The advantage wielded by transformed organizations isn’t limited to better adherence to timeframes, it extends into budgeting, as well. Transformed organizations completed a quarter of their projects under budget, compared to 15% of legacy businesses who can claim the same.
Organizations who are consistently bringing projects to completion under budget – without sacrificing quality – will be positioned to reinvest those savings into other improvement projects. This could enable them to continue to compound their technological edge over non-transformed competitors.
Finding #3: Application Spend
IT budgets seems to go further for transformed companies than they do for those located on any other level of digital transformation (legacy, as well as middle stages emerging and evolving). Researchers discovered this by comparing IT budgets with the number of mission critical apps contained in an environment, with the latter meant to represent operational complexity. The results showed that, on average, transformed companies spend 14% less per mission critical app supported than other businesses.
This statistic, coupled with the one regarding budget efficiency, should go a long way to prove that digital transformation investments aren’t a frivolous expense. Rather, they’re an investment in an organization’s future financial health.
Finding #4: Innovation vs. Maintenance
Transformed organizations are more likely to have an eye on the future, according to the report. They spend just over half (54%) of their IT budgets on maintaining the services and infrastructure they already have in place. In legacy businesses, that number is closer to two-thirds (66%). On the flip side of both of those figures, transformed businesses are able to invest 46% of their budgets into new projects and initiatives while legacy groups are left with just 34% to devote toward innovation.
Staying competitive necessitates organizations be ready to explore new options and technologies. Those who stand still and simply focus on keeping legacy systems running will likely find themselves falling behind their more forward-thinking competitors in terms of what they can offer customers.
Finding #5: Perception of IT
For too long IT spend was viewed as something of a necessary evil. In transformed organizations, opinions of IT couldn’t be more different. In the study, 21% of respondents from transformed businesses said they see IT as a competitive differentiator while 49% described it as a valued service provider. The view in legacy organizations is far more dated, namely that just 3% see IT as a competitive differentiator while 28% view it as a valued service provider. The vast majority (61%) of legacy organizations believe IT is a stable service provider, but ultimately a cost center.
More and more businesses at the forefront of their industry are beginning to see themselves as technology companies who also provide some other product or service. The IT team must have a seat at the table with business leaders and it must be viewed as more than a cost center in order for that objective to be realized.
Finding #6: Long-term Competitive Edge
Optimism appears to be running high at transformed organizations. Roughly 85% of survey respondents from these businesses believe their organization is in a strong or very strong position to compete and succeed in their industry for years to come. Meanwhile, in legacy businesses, that number is less than half (43%).
The consensus is clear: the IT leaders polled for this survey see digital transformation as a pathway to success. Those who fail to embrace it seem wary about what the future holds while those who have transformed themselves feel ready to take on whatever comes next.
Next Steps: Bringing digital transformation to your business
Ready to explore the impact digital transformation could have on your business? Our team of IT experts can help you chart and execute a course toward becoming – and remaining – a digitally transformed organization, regardless of where you reside on that journey. Schedule a Data Center Modernization Assessment now by visiting: www.arrayasolutions.com/contact-us/.
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