How Digital Transformations Make IT Profitable

 
 
By Dennis McCafferty  |  Posted 05-29-2017 Email
 
 
 
 
 
 
 
 
 
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    How Digital Transformations Make IT Profitable
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    How Digital Transformations Make IT Profitable

    Digitally transformed organizations have an edge when it comes to completing IT projects ahead of schedule and under budget, and they're leaders in innovation.
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    Secure Position
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    Secure Position

    85% of the senior IT leaders at companies considered digitally transformed said their organization is in a strong or very strong position to compete and succeed in their market for the next few years, compared to only 43% of those at legacy organizations who made that claim.
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    Report Card, Part I
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    Report Card, Part I

    51% of those at transformed organizations—but just 12% of those at legacy companies—said their IT department is making excellent progress in automating manual technology processes and tasks.
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    Report Card, Part II
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    Report Card, Part II

    47% of those at transformed companies¬—but only 7% of those at legacy organizations—said they are making excellent progress toward running IT as a profit center.
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    Time Element
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    Time Element

    34% of those at transformed organizations said their IT projects are completed ahead of schedule, compared to just 11% of those at legacy companies who said this.
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    Fiscally Sound
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    Fiscally Sound

    25% of those at transformed companies said they complete IT projects under budget, but just 15% of those at legacy organizations said they meet that goal.
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    Innovation Allocation
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    Innovation Allocation

    The transformed organizations surveyed designate an average of 46% of their IT spend for new projects and initiatives, but the legacy companies spend only 34% on average.
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    Value Statement
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    Value Statement

    49% of those at transformed companies—but only 28% of those at legacy organizations—said their IT department is viewed internally as a valued service provider.
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    Distinct Advantage
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    Distinct Advantage

    21% of those at transformed organizations said their IT initiatives are viewed as competitive differentiators, while just 3% of those at legacy companies made that claim.
 

Digital transformations are about more than innovation for its own sake: They are turning IT departments into profit centers, according to a recent survey from Dell EMC. The report, "How IT Transformation Maturity Drives IT Agility, Innovation and Improved Business Outcomes," divides organizations into those that are considered digitally transformed and those that are still legacy driven. Transformed organizations clearly command an edge in completing IT projects ahead of schedule and under budget. They also allocate more of their tech budget for innovative projects and initiatives, and are much more likely to view IT efforts as competitive differentiators. "Digital transformation initiatives necessitate that the underlying technology infrastructure supporting associated business applications and IT services must evolve accordingly," according to the report. "However, legacy IT is largely unprepared to meet the requirements of the new digital business: performance bottlenecks that impact end-user experience in a world that demands constant availability and response times; rigid architectures that force organizations to make forklift upgrades as requirements change; and traditional provisioning processes in which IT is often seen as a barrier rather than an enabler for the business. Organizations must resolve this conflict between digital transformation goals and today's IT reality if the business is to meet its ultimate objectives." An estimated 1,000 global senior IT leaders took part in the research, which was conducted by Enterprise Strategy Group (ESG).

 
 
 
 
 
Dennis McCafferty is a freelance writer for Baseline Magazine.

 
 
 
 
 
 

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