Only one in four enterprises pursuing IT modernization initiatives have completed their initial objectives, yet even those in the earliest stages of the journey are reaping measurable benefits that are driving business transformation, according to a new IDG Research Services survey commissioned by Insight Enterprises’ Cloud + Data Center Transformation solution area.
The survey, “The State of IT Modernization 2020,” examined the maturity of efforts to optimize IT operating environments, cloud strategies, applications and processes, including progress made, barriers encountered, and variations in initiatives at different phases of the journey. Respondents included 200 IT executives working in organizations with an average of 29,000 employees across a wide range of industries.
Among the findings:
- More than two-thirds of IT leaders believe that IT modernization is a prerequisite for business transformation, indicating that they now view their role as foundational in providing the building blocks for business growth and success.
- Just 25% have achieved their initial IT modernization objectives, in part because of hurdles including competing priorities, outdated processes and tools, outdated infrastructure, lack of in-house expertise, insufficient budget, and operational limitations such as inadequate application development and IT operations (DevOps) teams. The low completion rate also reflects the fact that 41% of respondents delayed or abandoned some projects in 2019, primarily because of competing priorities and the absence of a clear roadmap.
- Even the 26% of organizations in the beginning stages of modernization are seeing measurable impact on business operations ranging from improved quality of service (65%) and better customer experience/satisfaction (52%) to cost savings (50%), uptime (44%) and creation of new revenue-generating products and services (42%). Those who have made the most progress in IT modernization have seen even better results in all eight categories measured, notably including the ability to extract business value from data (56%).
The survey also revealed extensive efforts to optimize cloud strategy, substantial public cloud cost overruns, broad use of managed services to aid modernization activities, and key challenges facing IT teams in 2020. Results showed that:
- Cloud optimization was a major focus of virtually every organization regardless of maturity level in 2019, including implementation of cloud-native initiatives such as application modification (93%), increasing workloads deployed in the public cloud (92%) and/or the private cloud (91%), switching from an all-public or all-private cloud strategy to a hybrid cloud approach (89%), and adoption of a multicloud strategy using more than one public cloud provider (87%).
- 84% moved select workloads out of a public cloud to an alternative cloud or non-cloud location, reflecting the challenges and due diligence required to determine optimal workload placement in today’s multicloud and hybrid cloud landscapes.
- 69% reported higher-than-expected public cloud costs, averaging 62% higher than anticipated. Major causes run the gamut from data egress charges for shared persistent data, unplanned cloud adoption, and mergers and acquisitions to failure to take advantage of vendor volume discounts, oversubscription, and failure to optimize workloads to extract maximum value from cloud platforms.
- Adoption of managed services is widespread at every stage of the IT modernization journey, with an average of 95% of respondents outsourcing one or more IT operating environment functions to a managed services provider and 84% outsourcing cloud management.
- Governance is the #1 modernization challenge in 2020, followed by the need to define and optimize a new IT operating model spanning multiple cloud, on-premises and edge platforms (#2) and define and execute a strategy for integrating these centers of data (#3).
“This survey shows that organizations still face a steep learning curve when it comes to IT modernization, but the effort pays off almost immediately in new business efficiencies, improved user experiences, and support for innovations that can drive new revenue streams,” said Shawn O’Grady, senior vice president and general manager, Cloud + Data Center Transformation, at Insight. “The key is to perform the due diligence to create the roadmap that will pave the way for that business transformation, and then to implement the technology as well as the cultural changes required to effectively understand, implement, optimize and manage these new platforms. This is the work that our team of more than 1,200 architects, engineers and consultants does with our clients every day.”
The complete survey results are available at https://insightcdct.com/IT2020.
Today, every business is a technology business. Insight Enterprises Inc. (NASDAQ: NSIT) empowers organizations of all sizes with Insight Intelligent Technology Solutions™ and services to maximize the business value of IT. As a Fortune 500-ranked global provider of Digital Innovation, Cloud + Data Center Transformation, Connected Workforce, and Supply Chain Optimization solutions and services, we help clients successfully manage their IT today while transforming for tomorrow. From IT strategy and design to implementation and management, our 11,000+ employees help clients innovate and optimize their operations to run business smarter. Discover more at www.insight.com. NSIT-M