According to a recent survey of 500 CEOs, CIOs, COOs and CFOs by Forbes Insights and Dell EMC, organizations that have completed a successful IT transformation report the highest competitive positions and have achieved upwards of 7% gains in both sales and profit over the past year. Many organizations plan to spend up to 50% of their total budget on IT transformation. The success of that transformation depends on multiple factors; transforming the existing IT infrastructure is just one of them.
Why your data center is an enabler of IT transformation
In this transformation journey, data center technology will undeniably play a major role. If we take a closer look at the top goals that organizations pursue through IT transformation, we see that they are very much in sync with the benefits of modern data centers. Today, it’s all about modernizing, automating and transforming the existing infrastructure. Only when these three steps are realized successfully will organizations accomplish the number 1 goal of IT transformation: reducing IT costs. Besides cost reduction, the other two major IT transformation objectives are being first to market with new products and services, and reallocating funds to strategic business projects.
To reduce IT costs, organizations must make their IT infrastructure as flexible and agile as possible. This allows them to easily build and run core business applications while also enabling the deployment of next-generation applications. That is where (hyper)convergence comes into play. It reduces the time and cost of deploying, configuring and managing hardware and software components separately, thus accelerating the time to value for IT investments. These cost savings allow companies to reallocate funds to business projects early on. This flexible and agile infrastructure is a prerequisite to then start automating the delivery of IT services and installing some form of self-service experience for the business owner. After modernization and automation of the data center comes what I believe may be the biggest moment of truth: ensuring that processes and teams are reengineered to manage this new IT environment and to drive business innovation. This represents the greatest challenge for IT departments.
Rocky road to success
So even if this three-step process of modernizing, automating and transforming IT sounds rather straightforward in theory, it is a rocky road in practice. Furthermore, technology itself often isn’t the major challenge. The survey shows that the way in which the IT department is perceived is one of the primary reasons why many IT transformations fail to deliver the expected results. It is hard to have the C-level suite aligned on the transformation goals when IT is still mainly considered as a cost center. To stop being ‘the IT guys who just deliver what business asks’, IT should proactively take the lead, position itself as a business enabler and demonstrate its business expertise and understanding of the company’s financial goals. At the same time, the C-level suite must help to establish a broader IT mindset within the organization.
A more constructive dialog between CIOs and CFOs will require a better financial underpinning of the CIO’s metrics to define success, and a broader focus of the CFO beyond on cost and maximum efficiency alone. If CFOs give priority to investments with a proven ROI, not much innovation will happen. 63% of the respondents in the study acknowledge that falling behind competitors is the biggest risk related to a poor CIO/CFO partnership – a rather disturbing observation, since the primary goal of IT transformation is to be first on the market with new products and services. So overcoming the barriers to better CFO/CIO collaboration should be a priority in every organization today!
CIO: IT expert and change agent
CIOs will increasingly be judged on their ability to help shape the organization’s future business model and help the business capitalize on the latest technology. Inevitably, the respective interests and focus areas of the CIO and CFO are moving in the same direction and are increasingly likely to overlap. They both depend on each other to build innovative customer experiences. CIOs find themselves in a challenging position in which they need to keep the traditional IT environment up and running while also proving themselves as change agents in the IT transformation. Modernizing the data center will not be the solution to every challenge, but it will provide a solid foundation for making this change happen.
The author of this article is Arnaud Bacros, Managing Director Enterprise Dell EMC Belux