According to a new report from the Business Performance Innovation (BPI) Network, an industry grouping which has launched a campaign to promote change and development in data centers, many of those running networks, data centers and back-end systems say lack of planning, deficiencies in key skills, insufficient funding and a paucity of communications and collaboration with the business side make renovation of IT infrastructure a challenge for enterprises of all sizes.
The new report shows that bureaucratic methods, budget cuts and differences in strategy between Chief Information Officers (CIOs) and Chief Executive Officers (CEOs) are severely delaying adoption of cloud technologies to the detriment of their companies. This will be a major worry for both cloud giants and the colocation industry as they ponder their medium-term strategies.
It has been shown that such technologies can speed time to market for digital products and services, provide the agility companies need to adjust to today’s fast-changing business environment and cut the high costs of enterprise technologies.
Just a few months ago,in the first BPI report, 92 percent of business executives globally said that they were making progress toward adopting modern technologies to transform their companies into dynamic digital businesses. They predicted the three areas that would benefit most from transformation were: increased agility in the face of business changes (70 percent), greater cost efficiencies (57 percent) and a faster development of innovative new applications (47 percent).
Yet a new BPI survey of frontline IT workers, just published in partnership with Dimension Data, shows that most corporations are, at best, just getting started on the road to IT transformation. The survey uncovered major failings in planning, resource allocation, staffing, collaboration and financial commitments that are impeding progress.
It staff fail their bosses with dismal marks
These IT professionals – the very people who would implement the new technologies – give their companies failing or near - failing grades on their ability to implement the IT transformation their executives say they want. The details in the report are frankly shocking.
For the new research The BPI Network interviewed CIOs, business executives, educators, consultants and others in the Americas, APAC and EMEA, finding broad agreement among management experts that most organizations are failing to execute an IT transformation largely due to a lack of executive commitment, absence of clear objectives, lack of technical knowledge among business managers, a deep shortage of skilled data and software engineers, and poor collaboration between IT and business staff members.
What the communications gap will do if not addresed
“This is exactly what I see in every client I visit,” said Kevin Leahy, General Manager for Data Centers for Dimension Data in the Americas. “What I find is a communication gap. What they’re spending time on is very low-level automation tasks. Instead, they should focus on innovation and disrupting their competitors. They need to focus on the tasks that will change business outcomes.”
Even with such a clear vision of the potential benefits, the latest BPI survey shows most companies are stumbling in their efforts to update the technologies to drive big gains in productivity, innovation, customer service and, in the long run, profit and competitive advantage.
Why the CIO must be courageous
Failures in transformation start in the C-suite where there is a clear desire to adopt new technologies such a cloud says the report, but often a lack of the clear direction and funding needed to succeed.
In the survey, frontline IT workers were asked which management executives are most demanding in the push for new technology adoption. The first place answer was practically a tie, with 42 percent naming the CIO and 41 percent naming the CEO as the most influential figure. Yet 62 percent said their team is under-resourced or ’severely’ under-resourced. Several experts agree the CIO must take the lead on the issue of resources. The fact that both of these officials are responsible for inadequate budgets is disturbing.
What we need now
Suk-Wah Kwok, APAC regional CIO for the Lockton Companies said: “An organization needs a courageous CIO to make a decision on something in which he/she might not be 100 percent confident,” Suk-Wah Kwok, told BPI researchers: “If the CIO doesn’t have the courage to do it, no one will.”
Once CIOs decide to pursue an IT transformation and get a commitment from the C-suite, they’ll still need to produce a detailed plan and budget before the CEO and CFO will fund it. “IT leaders have to show the business value to be able to ask for additional budget,” said Murat Ozturan, CEO for Microsoft Services in Asia Pacific and Japan. “IT needs to change and start talking about the business value they’re bringing in. Then they can ask for more budget.”
The egg and the chicken - old question, new cloud dilemma
This comes down to a chicken-and-egg question. Executives may recognize the importance of cloud-enabled systems, but a CIO alone cannot accurately estimate that budget without detailed discussions with business managers and IT staff to determine exactly what’s needed and what’s possible. That requires collaboration.
Those findings – part of the Business Performance Innovation (BPI) Network’s “Transform to Better Perform” knowledge transfer initiative (http://www.reinventdatacenters.com) – demonstrate significant gaps between the desire of corporate leaders to accelerate business transformation through technology and their companies’ true commitment and capacity to make it happen.
Based on a global survey of IT professionals, the new study, entitled “Bringing Dexterity to IT Complexity: What’s Helping or Hindering IT Tech Professionals,” is a sequel to earlier research based on engagement with business leaders globally. Transform to Better Perform is sponsored by Dimension Data, a global leader in the provisioning and management of IT infrastructure solutions and services.
Download the complementary report here
Click here for an infographic on the study
Click here for an IT Transformation Scorecard