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Catching Up in the Race for Digital Transformation




February 14, 2019

It seems that digital transformation is on every CIO’s agenda for 2019. What this means varies, from leveraging artificial intelligence (AI) and machine learning for one company to automating key processes for another – and everything in between. But no matter what your priorities, every digital transformation initiative involves one thing: data. (And lots of it!)

In their 2019 predictions on AI usage, Forrester states, “While enterprise aspirations for AI run high, in 2019, we predict continued investments in good old’ information architecture (IA). The tables will turn from AI to IA in the majority of firms that have already dabbled in some form of AI, as they’ll quickly realize that their irrational exuberance for AI adoption must be equally met with solid efforts on an AI-worthy data environment.”

This Race Requires Talent

In the race for digital transformation, one of the challenges many IT departments face is that they are stretched too thin. The vast majority of business leaders we talk to say they are having a hard time finding and retaining talent. Granted, that’s one of the primary reasons organizations reach out to a managed service provider like us, but the research data confirms just how widespread this problem is.

Take cybersecurity as an example. Given the massive amounts of data, much of it confidential, that companies handle these days and the highly regulated environments in which they operate, cybersecurity is an essential component of digital transformation. Yet, cybersecurity professionals are expensive. In many cities, a mid-level professional can command a salary of six figures – and that’s doesn’t include overhead.

And today’s IT professionals are highly mobile and not afraid to shop around. A study conducted by (ISC)², the world’s largest membership association of certified cybersecurity professionals, found that 84 percent of cybersecurity workers were open to new employment opportunities in 2018. It also found that 46 percent were contacted weekly by recruiters, regardless of whether they were actively looking for a job.

Are You Trying to Do Too Much?

There used to be a prevailing attitude in IT, especially in larger companies, that was often referred to as “not invented here.” These executives and IT leaders felt that no external provider could possibly do things as well as they could in-house. Even in simpler times, they spent a significant amount of their budget on IT infrastructure, people, and overhead.

But as I said, those were simpler times. These days, technology moves too quickly and the threats are too great for most companies to do everything in-house even if they could find and retain the right people. IDC’s 2017 research found that 30 percent of executives outsource at least some of their IT infrastructure and application portfolio to a managed service provider. They expect that to rise to 41 percent over the next five years.

The story that’s not told in that stat is how MUCH of their IT they will outsource. On one end of the spectrum, we have customers that only outsource a portion of their IT. For example, many of our customers with existing IBM i Power Systems will keep their infrastructure in-house while we manage it remotely.

However, more and more customers are outsourcing nearly all of their IT needs: infrastructure as well as other components such as disaster recovery, security, and compliance. Sometimes they’ll use the infrastructure in one of our data centers, but as often as not, they’ll want help managing a public cloud environment such as AWS, Azure, or the Google Cloud Platform.

Keeping Your Eye on the Prize

Digital transformation is hard work, but keeping your eye on the prize can get you through even the hardest of days. We’ll end with sharing an encouraging finding from Bain & Company research:

“After comparing financial results for five categories of companies based on their degree of digital maturity, Bain found that revenues for the digital leaders grew 14 percent over the past three years, more than doubling the performance of the digital laggards in their industries. Profitability followed a similar pattern—83 percent of the leaders increased margins over that period while less than half of the industry laggards did so.”

It seems that digital transformation is paying off for those who persevere.



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