Digitization, or digital transformation, is an essential step for all companies, and it’s a topic I have spoken and written about extensively. However, this process can’t happen without IT transformation.
Digital transformation? IT transformation? I know. The terms are somewhat misleading, and they test the patience of many a manager. At the same time, it isn’t that difficult to differentiate between them. Digitization involves developing new business models and improving the way in which target markets are addressed. IT transformation means transforming the IT organization and building more agile, better-performing IT systems. It is often associated with replacing legacy systems and IT infrastructures which are becoming obsolete.
IT transformation is necessary because, on the one hand, information volumes are skyrocketing. According to Dell EMC IT Transformation Journey 2016, over 44 zettabytes of data will be available by 2020. That’s 44 billion terabytes. No data center will be able to manage those volumes if it isn’t using the very latest technology.
On the other hand, the IoT is playing an increasingly important role: According to our analysis, 30 billion devices will be connected to one another via the Internet within three years. These will include classic servers, PCs, and smartphones, but also machines, sensors, and actuators. Every IT department needs to take this development into account.
There’s also the fact that the departments and virtual teams dealing with digitization are demanding processed data with ever-increasing frequency and speed, and they want data that is more relevant for making decisions. And they are pursuing this data relentlessly, because the success of their projects, and ultimately the competitiveness of the company, depends on it.
But the previous role of the IT department as the easy-going provider of tools and solutions, however optimized they may be, is no longer sufficient for the new, high-tempo needs of the company. The CIO must redefine the company’s IT as ITaaS (IT as a service), which proactively supports the business strategy in a success-oriented way. This includes a better understanding of business practices and processes, as well as more in-depth dialog with the company’s departments. And it also requires a completely new attitude.
Transport operators or taxi companies, for example, have to bid farewell to the “passengers” they have so often held in contempt and suddenly get acquainted with the idea of “customers” when completely new, customer-friendly competitors appear on the market. And IT departments have to take a similar step. That is to say, they must leave their ivory towers and seek out a dialog with their “customers” in the business.
This means researching the needs of the company’s departments and teams, and, of course, supporting them as quickly and competently as possible. This works best when IT staff develop “front office skills” in their interactions with their colleagues in the business. That means speaking their language and taking full responsibility for the IT services they provide. But the question of whether this will be successful or not doesn’t ultimately depend on the organization, but on the team’s attitude.
According to the results of our Dell EMC 2017 IT Transformation Maturity Study, there’s plenty of good news when companies tackle the process of IT transformation. I’d like to quickly list the four most important results here. After the transformation:
- A company is twice as likely to exceed its revenue targets.
- Companies spend 14 percent less on each business-critical application.
- IT departments have access to a 12 percent higher proportion of their budget for innovations.
- 47 percent of companies run their IT departments as profit centers rather than cost centers.
In other words, everyone profits in the end. The company profits because it boosts its competitive edge, and the IT department profits because it has a bigger budget for high-value assignments.