Now that digital transformation (DX) is well underway at large and midsize organizations around the world, progressive companies are taking the next logical step: forging IT transformation (ITX) strategies to create artificially intelligent data centers. These data-driven IT infrastructures gather large amounts of business and operational information and then leverage artificial intelligence (AI), machine learning (ML) and predictive analytics for automation and continuous-learning capabilities that support DX in powerful new ways.
“As part of our transformation process, IT is forming closer relationships with our businesspeople and product development groups to enable P&G’s ability to win,” says Alan Boehme, global chief technology officer and chief of innovation information technology at the consumer products giant Procter & Gamble. “It’s a recognition by the company that IT is the business and the business is IT. These areas are merging into one.”
- DIGITAL TRANSFORMATION (DX) LEADERS WERE TWO TIMES MORE LIKELY than laggards to have seen revenue gains of 7% or more in the past year due to the application of disruptive technologies within their IT infrastructures
- DX LEADERS ARE MORE THAN 1.5 TIMES MORE LIKELY than laggards to rate their IT organization’s ability to support DX more highly than their peers
- DX LEADERS ARE 3.5 TIMES MORE LIKELY than laggards to already have AI and machine learning in place to support IT transformation
- 34% OF C-SUITE EXECUTIVES OVERALL say outdated infrastructures represent the top technical challenge to achieving IT transformation
- 34% OF C-SUITE EXECUTIVES OVERALL cite change management and cultural change as the top, non-technical challenges to IT transformation
- 70% OF LEADERS say data and analytics will become integral to running IT infrastructures more efficiently and effectively over the next two to five years
- DX LEADERS ARE 3 TIMES MORE LIKELY than laggards to implement additional foundational technologies for analytics, such as business intelligence systems, data warehouses and executive dashboards, by 2023
- DX LEADERS REVEAL 3 KEY STEPS FOR ITX: infrastructure modernization, IT automation and cultural change
This report is based on a survey of 512 global executives. Thirty-one percent of respondents are from North American companies, 30% from Europe and the Middle East, 29% from Asia-Pacific and 10% from South America. The executives work in a variety of sectors, including energy, healthcare, technology and education. All are C-suite executives, representing CIOs (43%), CEOs (29%) and chief data officers (28%).
Leaders in digital and IT transformation, which represent 13% of the survey sample, are defined as those who describe themselves as digital transformation innovators or first movers in their markets and say their transformation efforts exceed expectations.
DIGITAL TRANSFORMATION TAKES HOLD FOR SOME, WHILE OTHERS STRUGGLE
The Forbes Insights, Dell EMC and Intel survey confirms that DX is the new normal. More than half of C-suite executives describe their DX initiatives as significant or their business operations as being fully transformed (Figure 1). What’s more, DX strategies are succeeding—53% of respondents say their DX initiatives are meeting or exceeding expectations.
ITX and DX aren’t unique to any industry, but some segments are achieving results faster than others. The highest percentages of leaders in the Forbes Insights, Dell EMC and Intel survey come from telecommunications and media companies, with financial services and technology firms tied for third. Regionally, the highest share of leaders comes from North America and Europe/the Middle East.
Leaders understand that IT infrastructures play a critical role in DX success. They’re acting on this realization by enabling ready access to high-quality business data and leveraging advanced analytics and AI to capitalize on this growing amount of information. Specifically, leaders are already capitalizing on ITX to derive more value from internal and external data to improve data center operations. In fact, leaders are 3.5 times more likely than laggards to already have AI and machine learning in place to support ITX.
“As automation and deep learning improve, there is the potential to move to a more proactive state in all areas of IT operations,” says Procter & Gamble’s Boehme. For example, with analytics, IT organizations will be better able to predict impending incidents and find correlations in data that can help avert problems before they arise. “The knowledge within machine learning and AI can take automation beyond routine tasks to more sophisticated activities for creating business value and supporting operations,” he says.
BUILDING ON BUSINESS BENEFITS
As mentioned earlier, being a DX leader correlates to positive business results. In addition to higher revenue growth, 32% of leaders also saw significant improvement in their competitive advantage and risk profiles. This puts leaders in the enviable position of building on these advantages to further widen the competitive gap with peers, who must focus investments on playing catch-up.
Executives at Ericsson, the global telecommunications company based in Stockholm, understand how adding innovative technologies to the data center yields a competitive edge. As the company is rolling out new cloud-based networking services and working with partners to use IoT to support data-driven manufacturing plants and smart city initiatives, a similar strategy is creating an automated, data-driven IT organization within Ericsson. “We’re making IT ‘smarter’ by using data, machine learning and predictive analytics to automate more of IT,” says Johan Torstensson, Ericsson’s CIO. “This is helping to drive down costs while also increasing quality.”
CHALLENGES FOR ITX LAGGARDS
Unfortunately, the ITX initiatives at many companies aren’t as advanced as Ericsson’s, for a number of reasons. When considering the biggest obstacles to ITX, respondents in the survey say they struggle most with outdated organizational and cultural obstacles as well as outdated IT infrastructure . These results are supported by an earlier study by Forbes Insights and Dell EMC that identified the need for updating reporting structures and the cultivation of change agents, especially among CIOs and CFOs.
But just as significant is how highly ranked outdated IT infrastructure is on the list of top concerns. Together, these results reinforce the fact that ITX requires a comprehensive plan for modernizing IT infrastructures, company cultures and organizational structures. While these challenges are significant and worth mentioning, they’re not insurmountable, as leaders are demonstrating through their own success.
A ROAD MAP FOR ITX SUCCESS
Progressive companies are seeing impressive results from their transformation efforts. Yet the fact still remains that only a small segment of companies is excelling at ITX. Luckily, the measures these front-runners have taken can point the way for other companies. The emerging best practices also show how executives can ensure their data centers stand the test of time and enable their business to meet the challenges and opportunities of tomorrow.
Here are three steps you can take now to enhance your odds for ITX success.
- Modernize Your IT Environment
- Automate IT Operations
- Transform Cultures and Organizations
A FUTURE OF CONTINUOUS CHANGE
It’s clear that ITX will be table stakes for business success in the years ahead. An overwhelming majority of C-suite executives agree that the pace of technology innovation and market disruption will continue or grow over the next 10 years, and executives are already dealing with this new reality.
“Producing a three-year IT road map is virtually impossible today,” says TGen’s Lowey. “In that amount of time, the whole landscape may completely change.”
With change happening so quickly, organizations can’t afford to be laggards. Letting leaders widen gaps in IT modernization, automation capabilities and cultural evolution may soon put many companies too far behind to recover. To stay current, organizations need to understand the essential role data centers play in business transformation, and invest in continuously transforming their data centers by following a comprehensive ITX strategy.