Digital Transformation Leaders Twice as Likely to Meet Revenue Goals, Dell EMC Finds

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Only 5 percent of large companies are prepared to transform their IT systems to meet digital business needs, despite a large majority (71 percent) that agree they will not be competitive without it, according to research released Wednesday by Dell EMC.

Enterprise Strategy Group (ESG) surveyed 1,000 IT leaders at large companies for the 2017 IT Transformation Maturity Curve report, which shows that 95 percent of those surveyed believe their organizations are at risk of falling behind a small group of industry peers. Those peers are transforming their IT infrastructure, processes and delivery methods to achieve digital business goals.

The companies leading in digital transformation are twice as likely to meet revenue goals as the companies with the least mature IT practices, with 96 percent of them exceeding revenue targets last year, according to the report.

“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,” David Goulden, president of Dell EMC, said in a statement. “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 report found that the many companies struggling to advance their digital business agendas tend to measure application cycles in months or even years. They also have siloed infrastructures and grapple with rigid legacy architectures.

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The report breaks out responding organizations into four stages of digital maturity. Legacy companies fall short on many or all dimensions of IT transformation, and make up 12 percent of respondents. Forty-two percent are categorized as “emerging,” and 41 percent are “evolving,” with a commitment to IT transformation and moderate deployment of modern data center technologies and delivery methods.

The IT maturity of organizations is reflected in their confidence: 85 percent of “transformed” companies believe they are in a “strong” or “very strong” position for market success, compared to only 43 percent of the least mature companies.

The report says transformed companies report progress in improving product innovation and time to market, automating manual processes, and running IT as a profit center rather than a cost center.

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Over half of all respondents currently use converged or hyper-converged infrastructure to support applications (54 percent), and scale-out storage systems (58 percent), while roughly half are committed to software-defined technologies as a long-term strategy and have begun moving towards their implementation.

Successful transformation is associated in the study with self-service capabilities, which 26 percent report are “extensive” or “established,” with progress toward end-users provisioning IT resources as they would from a public cloud provider (65 percent), and with adoption of formal DevOps principles and best practices (43 percent). It is also correlated with an effective relationship between IT and the business, with 36 percent of IT organizations evaluated monthly by the C-suite or board of directors, and 38 percent evaluated quarterly.

“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, Enterprise Strategy Group.