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6 data-driven diagnoses for the digital dilemma

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Derek Britton Director of Communications and Brand Strategy, Micro Focus
Red and white sign displayed at Snowmass, near Aspen, Colorado, warning of potentailly deadly concequences of going further.
 

Confronted with countless pressures, IT leaders struggle to prioritize vital transformation strategies. It is a dilemma. But as no two dilemmas are the same, where should you focus?

We are emerging from the toughest couple of years of the digital era. It would be impossible to catalog all the IT challenges, even in a modest-sized organization. These lists will vary by organization. Business strategies differ, priorities vary by industry, regional differences exist. And in terms of scale, challenges in startups may have little in common with those faced by multinational corporations.

What seems constant, though, is that surviving and thriving this year, while establishing a strong vision for the future, are crucial. That is the heart of today's digital dilemma. So are there any common threads? Is there DNA that binds it all together? Here's what the world of technology has been saying.

Making digital investments that matter

Despite continued global market volatility, additional spending is predicted in key technology areas. As recently reported, worldwide spending on digital transformation-related IT technologies will grow 4%, to more than $4.4 trillion, in 2022, according to Gartner. These investments are expected to grow 5.5%, to more than $4.67 trillion, in 2023.

Leveraging software and technology as a strategic asset, rather than as a business cost, appears to be establishing itself as an investment best practice. A recent report from Digital Enterprise Journal (DEJ) stated that 44% of software enterprises reported that their software strategies have a direct impact on their competitive position.

At fewer than half, this suggests a trend is emerging, but is yet to achieve widespread positive results. A worrying statistic from the same report underlines that concern: 68% of IT's time is spent "on tasks that do not contribute to key business outcomes."

While budget is increasing, leveraging technology as a best practice remains elusive.

IT operations and transformation

The CIO's reputation rests upon IT's performance in serving the business. What is changing is the maturity of attitudes toward the strategic importance of IT as a partner of the business, rather than as a subservient function.

The DEJ study illustrates this, with a 41% increase in the number of organizations that reported that the key role of IT operations is "enabling innovation." Put another way, IT operations must support a transformation agenda, not (only) a business-as-usual one.

Yet the leap from operational service provider to transformational innovator involves significant rewiring. Foundational elements such as automation are proving to be a hygiene factor. The reported average loss due to a lack of automation capabilities for managing IT performance, according to the DEJ study, was $46 million.

IT provision must evolve from transactional to transformational.

Application delivery

When it comes to application development, everyone has seen the "go faster" memo. Market demand and user expectations have grown relentlessly and, with so much upheaval in the same period, the requirement for fast, flexible delivery of new applications and services is greater than ever. Which makes the 41% increase in revenue loss due to "delays in application releases since 2019," as reported in the DEJ study, an alarming statistic. 

Chastened by recent difficulties, the same number (41%) reported an increase in "enabling new and unique customer experiences" as the key driver for investing in IT in the last two years. Development shops are evolving their agile approaches to a more fundamental approach of value stream management.

According to a report from industry group Value Stream Consortium, "Value stream management practices are more common in higher-performing organizations," although at present, 80% of teams do not practice value-stream mapping.

Velocity is vital and is driving fresh approaches to value-based delivery methods.

Core business system modernization

A significant ingredient of the contemporary technology challenge is the question of how to protect, leverage and evolve heritage, longer-standing IT investments. According to a recent study by Micro Focus and Vanson Bourne, 72% favor modernization as an overall business strategy.

One major element is the drive toward leveraging cloud technology as part of a modernization strategy. DEJ reports a return-on-investment metric of 3.6 times from effectively managing cloud-centric modernization projects.

But modernization is not just a technology question; there are significant staffing and resourcing challenges. The Vanson Bourne/Micro Focus survey reports that 48% of respondents are looking to invest in solutions that "will enable them to close the skills gap for modernization."

Modernizing critical IT systems may require people, process, and technology change.

IT security and cyber resilience

Pressures remain at status red for beleaguered CISOs, as the threat landscape continues to spiral uncontrollably.

According to international law firm RPC, in 2021 hacking occurred on the financial data of 42 million Britons, which is half the population. Worrying, if unsurprising, given that in 2021, there was a 50% increase in overall attacks per week on corporate networks compared to 2020, according to a study by Checkpoint.

But the footprint to manage grows inexorably, and deciding what to protect changes constantly. For example, 55% of respondents in the DEJ report said they are using open-source technologies as elementary pieces for managing innovation. These require protection, too.

The CISO mandate for true cyber resilience requires pre-emptive, holistic threat detection and action.

Data management, governance, and analysis

A recent article in Forbes cited IDC, saying that organizations had spent $215 billion on big data and business analytics solutions, a 10% increase over the year before. Is it enough to keep up with production? Statista projects that the amount of data created globally in 2022 will reach 97 zettabytes. That is a huge amount of data to capture, secure, store, process, analyze, report, govern, and retire.

The DEJ report said that capabilities for managing IT data are the "primary difference maker" across all areas of their research. They further reported that the top 20% of organizations in terms of performance were 3.7 times more likely to improve customer engagement and experience: winning organizations win at data.

Being a top performer in terms of data management and analysis is becoming more important.

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