A new study from the Enterprise Strategy Group (ESG) found that 81 per cent of those that did not embrace IT transformation will no longer be competitive in their markets.
There is a difference between IT transformation and digital transformation. Mike Sharun, President of Enterprise Canada for Dell EMC, told EChannelNews that digital transformation is about changing the business to a model focused on digital. IT is a part of that change to an environment that is more agile. “IT is an enabler of digital transformation and there are three towers in that process: IT, workforce and security,” he said.
The study, titled ESG’s 2018 IT Transformation Maturity Study was commissioned by Dell EMC and Intel, also found 88 per cent of organization are under pressure to deliver new products and services, while those companies who have transformed are 22 times more likely to be ahead of the competition by bringing in new products and services to the market.
In Canada, Sharun said the country is on the cusp of learning how to change. As an example, in the financial sector, Sharun has seen companies invest heavily in digital especially with the integration of smartphone and other personal devices. “All these institutions want younger people and these people don’t go to branches to get financial advice. They do it all online and not face-to-face,” he added.
Most of these organizations are looking to grow outside of Canada and believe that any growth in the country will be just a share shift.
“Canada is fairly regulated but I have seen even old-school organizations really try to change and be more innovative such as governments and in the private sector,” Sharun said.
One of the examples provided by Dell EMC was of Bank Leumi, Israel’s oldest bank. Bank Leumi has created a mobile-only bank called Pepper. This new platform is meant to reach a new generation of clients. To do this, the bank 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, establishing new environments sooner and at less cost.
According to Sharun, IT transformation needs to be led by CIOs. “If CIOs are going to be relevant in the future to the C-suite and the board then they are going to have to get out there and make their company more competitive. If CIOs leave it to the line of business decision makers they will end up running on legacy systems and be the person who just keeps things running. There are new people coming into the CIO role and they are driving the business side and have forged relationships with the line of business, while still making their IT environments more efficient. But they are focused on the other areas and part of that transformation curve,” he said.
For the channel, Sharun believes the same changes are occurring in the partner community. They too need to be faster and can’t just sell one thing. “Before partners were good a selling systems or servers or client devices. That is now plumbing. Customers are not looking for that anymore. They want partners who can drive the whole gamut and can sell infrastructure along with client. They can hook all that up, while developing new apps. And, help them on the security side. Partners today are playing in all these areas.”
The ESG study was conducted to provide insight into the state of IT Transformation. More than 4,000 organizations responded to the survey by ESG. The research company then segmented them into four stages:
Stage 1 – Legacy (6 per cent): Falls short on many – if not all – of the dimensions of IT Transformation in the ESG study
Stage 2 – Emerging (45 per cent): Showing progress in IT Transformation but having minimal deployment of modern data center technologies
Stage 3 – Evolving (43 per cent): Showing commitment to IT Transformation and having a moderate deployment of modern data center technologies and IT delivery methods
Stage 4 – Transformed (6 per cent): Furthest along in IT Transformation initiatives
This last data point surprised Sharun saying that he thought it would be further along by now.
About 96 per cent of respondents said that digital transformation initiatives are underway in either at the planning stage or at the beginning of the process.