Transform, Or Perish

Knowing the unknown: Taking the mystery out of IT transformation

By KT Ong, Country Manager, Malaysia, Dell EMC

In the last few years, we’ve been constantly reminded about the risks of falling into obscurity if we don’t take the full advantage of what the digital era has to offer. Even though digital transformation increasingly appears on business and IT leaders’ agendas, many organisations are yet to establish what it really entails, which makes the transformation process a bit of a mystery.

An IT transformation maturity curve study commissioned by Dell EMC via the Enterprise Strategy Group, found almost all businesses are struggling with the transformation journey (95% of those surveyed agreed). The main challenge for most organisations is that they did not start in the digital era, so IT transformation creates a fear of “we don’t know what we don’t know”. At the same time, organisations agree that transforming legacy IT is essential to winning in the future and ensuring competitive advantage for the business.

One thing is clear: no two transformations are alike and every business, with its own set of challenges and strengths, will need guidance and support to begin the IT transformation journey. Apart from that, each business will need to demystify what this journey will look like for them. Based on the research, organisations that have experienced benefits and improved business outcomes through transformed IT have four core truths in common.

Using these, and through collaboration with strategic partners, they can better understand the unknowns and find a way to optimise their level of IT maturity to become fully transformed.

  1. Embracing agile principles

Key requirements of the digital era include agility and a rapid evolution of operational processes, new products, and business models. Increased agility can be achieved in a number of ways. For example, in terms of the adoption of software or the automation of IT processes.

Software is often the key to unlocking digital business advantage: scalable, infrastructure-independent development frameworks, combined with agile development operations processes, dramatically accelerate the development of cloud-native applications.

According to the research, transformed organisations that score highest on the maturity curve, outperform others in their ability to quickly respond to business requests and complete their tasks and projects. For these digitally mature businesses, automation is a key enabler of agility. Transformed organisations are more than four times as likely to have made excellent progress with automating manual IT processes and tasks. Looking more closely at software and automation are two known and proven steps towards successful IT transformation.

  1. Investing in innovation

Organisations usually consider IT budgets in two categories: maintaining existing infrastructures and investing in new projects. For IT transformation, the balance and relationship between these budgets needs to shift. According to the IT transformation maturity curve study, transformed organisations that adopted innovative IT infrastructures reported that an average 46% of their budget was freed up and spent on innovation, much more than organisations that ranked as less advanced.

Moreover, organisations ranking lower on the maturity curve spend around two-thirds of their IT budget on maintaining existing systems. When demystifying and defining transformation strategy, IT leaders need to make sure current IT infrastructure is also enabling innovation. Are legacy technologies creating performance bottlenecks, cost overruns, slower time-to- market, and capability shortfalls? If so, this could be holding back transformation.

Transformed IT organisations also place strategic bets on a broad array of modern data centre technologies. A successful IT transformation involves redefining the strategy to have a focus on innovation, resulting in the transformed delivery and consumption of IT services, as well as dramatically reduced operational and capital expenditure.

  1. IT aligned with the business

Legacy organisations are often hampered by the ‘but it used to work for us in the past’ mentality. Such a mindset has no place in the digital era. Better knowing how IT transformation should take place requires IT leaders to establish clearly defined milestones and make sure that top management has a close eye on developments.

In fact, when respondents working at transformed IT organisations were asked to categorise how their line of business stakeholders feel about the IT organisation, 21% reported that they are seen as a competitive differentiator and 49% reported they were seen as a valued service provider.

Transformed IT organisations keep digital transformation efforts on track as they ensure alignment with other business leaders. Frequent meetings with leadership and other stakeholders who can provide objective advice and feedback on meeting business expectations are essential. Such alignment can be reinforced with formal reporting structures that give CIOs direct access to their CEOs and other executive leadership positions.

  1. Skills transformation

Transformed organisations realise that as legacy IT evolves, new skills, abilities, and ways of thinking about how IT serves the business, will be essential to success. Only a few people in today’s workforce already possess required skillsets for the digital era.

For example, GE, the 120-year- old company that has evolved from an organisation that was predominantly involved in selling industrial equipment to one that offers data and analytics software services across their products portfolio, has recently launched a proprietary skills curriculum to train their employees for new, highly valuable jobs needed in the digital era.

In Malaysia, telecommunications company Telekom Malaysia (TM) started its digital transformation journey in 2015 with the launch of a pilot project called I-Join for the mass market segment 1. Consumers in Malaysia are embracing a digital lifestyle, and TM realised that they needed to transform digitally to stay relevant.

The I-Join project enables cross-functional teams to adopt the agile way of working, thus improving both the company’s top and bottom line, and above all, deliver an exceptional digital experience to its customers. It’s crucial for IT and business leaders to conduct a thorough analysis of its most important resource to identify and work to eliminate skills gaps that could cripple IT’s ability to execute strategic transformation initiatives.

Organisations might look for the guidance outside or develop a skills development training program in-house. IT transformation is a first step on the digital transformation journey. It can come in many designs, depending on business requirements, yet the target goal is the same: an IT organisation that has achieved a level of maturity that is agile, creates more opportunity for innovation, and has a fixed seat at the table with business decision makers.

For many, that journey is filled with unknowns. However, through a strategic focus on these four key areas, and collaboration with experienced partners, organisations can better understand the steps they need to take to define their IT transformation future.

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