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Enterprises Falling Behind in Transforming IT – Study

The buzz in technology now is digital transformation, which many companies say they are moving toward. However, enterprises large and small are not updating their underlying data center technologies fast enough to support this change.

The result, according to a study released this week, is that many enterprises are losing out to a small group of nimble competitors that have transformed their IT and are already on the road to digital transformation. As many as 95% of companies are behind in updating their IT. (See Digital Transformation: Why IT Culture Matters.)

These results are contained in the "ESG 2017 IT Transformation Maturity Curve" conducted by the Enterprise Strategy Group and sponsored by Dell EMC. Analysts surveyed 1,000 senior IT executives from the United States, Europe, South America and Asia between December and January. (See Dell, HPE, Cisco Top Cloud Infrastructure Market – Analysts .)

The results found that only 5% of enterprises have transformed their IT in order to lay the groundwork for digital transformation. At the same time, 12% of respondents believe that their businesses are stuck with legacy systems without a timetable for change.

The majority of businesses fall into two middle categories. About 42% of enterprises are in the "emerging" section, which means there's some progress but minimal deployment of modern data center technologies. Another 41% fall into the "evolving" stage, which means that they are committed to transforming their IT, and are deploying some of these technologies in their data centers.

These types of technologies include modern storage systems, hyperconverged infrastructure, cloud computing technologies and services, as well as DevOps methodologies. (It should be noted that Dell EMC sells many of these technologies and services.)

While many companies are behind the curve when it comes to transformation, the study did note that even small updates can produce a positive result for the business.

"Companies today increasingly rely on technology to grow and improve all aspects of their business," John McKnight, vice president of Research and Analyst Services for ESG, wrote in a April 12 statement. "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."

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Seven out of ten respondents reported that IT transformation is essential to staying competitive in their markets, and 85% of those companies that have gone through this process believe that they are well ahead of their competition. In turn, these more mature enterprises are more likely to view IT as a profit center and a competitive differentiator rather than a drain on resources. (See Cloud Is Taking Budget Away From IT.)

When it comes to IT transformations, companies are having more success with cloud and DevOps than with other technologies. In fact, about 65% of respondents reported that they have made progress in allowing their employees to provision IT resources in the same way a public cloud provider allows.

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— Scott Ferguson, Editor, Enterprise Cloud News. Follow him on Twitter @sferguson_LR.

GenniferGooggy 2/13/2020 | 8:15:34 AM
I cannt agree with this I can not agree with the numbers that are said in the video. Well, seriously, it sounds like nonsense. Young companies or even sites, here's how an essayservicescanner.com is a site with reviews of writing services. Here you can immediately start everything without any transformations in IT. Old companies that can not be completely reconstructed in accordance with modern requirements. Such companies will collapse and nothing more.

kq4ym 4/24/2017 | 4:27:20 PM
Re: digital That "only 5% of enterprises have transformed their IT in order to lay the groundwork for digital transformation," does seem lower than I would have thought. I wonder if that's because of the way the survey was worded? But nonetheless, there's definitely some real roadblocks to those who lag behind the competition.
Ariella 4/19/2017 | 9:34:36 AM
Re: digital @Scott that's very true. I suppose thtat's why businesses have to simply refer to being on the cutting edge or bleeding edge to indicate they are as advanced as they could be at present. 
Scott_Ferguson 4/19/2017 | 8:39:39 AM
Re: digital @Ariella: And that brings us to another interesting point: How do you know when you have arrived? If technology is always changing, then the goal posts move and so you might always be the next step behind. Like Sisyphus and his boulder.
Ariella 4/18/2017 | 9:43:58 PM
Re: digital @Scott I see, well, in that case, sure, many companies that say they're on the path to digital trasnformation take quite a few year to really arrive at the point at which you can say they really are utilizing digital platforms effectively. If the bar here was set to that point, then, sure, not so many will qualify.
Scott_Ferguson 4/17/2017 | 8:47:57 AM
Re: digital @Ariella: I actually wasn't that surprised when I read the report. The study had a very high threshold for what it means to be full transformed. In order to get where you need to be, the company needs to have undergone a pretty large IT overhaul. I think what's more important is the companies that were in the middle, and that any move toward this digital transformation can help a business out. 
Scott_Ferguson 4/17/2017 | 8:45:45 AM
Re: digital @danielcawrey: I think that's an important point. You have younger companies without the baggage of legacy systems and they can innovate and move a lot faster than older firms that must deal with legacy systems. After so many years of investment, it's hard to walk away from those systems, and even harder to bring them up to date especially if they are mission critical. 
danielcawrey 4/15/2017 | 1:27:59 PM
Re: digital It is certainly a lot harder for larger organizations to move as fast as smaller ones. 

This really leaves an opening for smaller more entreprenuerial firms to take hold. I don't expect that to change either unless big organizations go through a pretty substantal culture shift. 
Ariella 4/14/2017 | 3:29:19 PM
digital <only 5% of enterprises have transformed their IT in order to lay the groundwork for digital transformation.> That does seem very low. I've read so many case studies of businesses setting out on digital transformation that I expected the percentage to be in the double digits at least.
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