The Future-Ready Enterprise
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- Godfrey Welch
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1 Driving Business Results in the United Kingdom Today while Preparing for the Challenges of Tomorrow Dell February 2016
2 What is a Future Ready Enterprise? A future-ready organisation is one that is always extending the abilities of its IT infrastructure and applications while also pursuing IT organisational practices that enable it to identify and address changing business and technology needs. These future-ready organisations not only react quickly to market changes but are also better able to become disruptors themselves. Extends IT infrastructure abilities Drives new sources of competitive differentiation Supports ongoing business processes Business success or failure ties directly to the effectiveness and timeliness of the business IT service delivery environments. 1
3 A recent IDC study quantified the extent to which future readiness matters in today s digital business world. IDC identified four levels of enterprise future readiness: The Four Levels of Enterprise Future Readiness Current Focused Future Aware Future Focused Future Creators Business success or failure ties directly to the effectiveness and timeliness of the business IT service delivery environments. The more future ready the organisations in the study were, the stronger their business outcomes across a wide range of key performance indicators (KPIs), from revenue growth and profitability to employee productivity and retention. 2
4 Key Findings The more future ready the organisations in the study were, the stronger their business outcomes across a wide range of key performance indicators (KPIs), from revenue growth and profitability to employee productivity and retention. Future Creators, the most future-ready organisations, outperformed all other groups and significantly outperformed Current Focused in all business metrics studied. Today, only 16% of companies in the United Kingdom fall into the Future Creators category. THE MOST IMPORTANT FINDINGS FROM IDC S STUDY Regardless of the level or scope of focus on the three technology aspects, an effective IT organisation that can work closely with lines of business (LOBs) is critical to becoming a truly future-ready enterprise. Future readiness is an ongoing journey. You can make immediate progress rather than waiting to reach the top of the index. #1 Future Creators 16% Today, only 16% of companies in the United Kingdom fall into the Future Creators category Organisations future-ready efforts can also deliver major benefits even if the organisations focus on improving whichever specific aspects of their IT infrastructure (converged, cloud, BDA) are most important for their needs today. 3
5 The Four Key IT Aspects That Define Future-Ready Companies The remaining 84% of companies are missing out on the complete benefits of future readiness, but IDC identified four areas where the right investments can speed the journey to a more successful future. Converged Infrastructure Enables simpler, more efficient, and more scalable IT infrastructure within an organisation s own datacenters. Cloud Provides greater agility, flexibility, and data control at the application level and the business level, improving productivity and enabling resource-intensive applications no matter where they are. Big Data and Analytics Enables better and faster business decisions by getting the right data to executives, frontline employees, and (increasingly) customers at the right time, with most advanced organisations also using BDA to automate critical business functions for improved accuracy and efficiency. Future-minded IT organisational practices Are the foundation that ensures the sustained effectiveness of investments in the other three areas. 4
6 Future-Readiness Drives Improved Business Results In today s economy, the success of organisations is driven by their ability to innovate and to adapt to change. A future-ready organisation has the IT infrastructure and organisational practices in place to both initiate change and adapt to outside disruptions. Many organisations that IDC speaks with are not future ready today, and they risk falling further behind if they don t take steps to begin their future-readiness journey. 5
7 Future-Readiness Category Profiles Current Focused Future Aware Future Focused Future Creators % of UK Sample 16% 33% 35% 16% Converged Evolutionary approach to IT infrastructure Evolutionary approach to IT service delivery Revolutionary approach to IT service delivery Revolutionary approach to IT service delivery Infrastructure Individualistic driven IT transformation Team-driven IT transformation IT organisation driven IT transformation Business driven IT transformation Cloud No cloud efforts driven by IT organisation Pilot/limited private cloud deployment Well-defined public and private cloud Cross cloud catalogues, audit/security and Ad hoc use of public SaaS, PaaS, and IaaS by IT organisation service catalogues data control clouds by BUs IT notification of cloud use by BUs IT organisation tracking use and Usage/performance tracking and automated implementing show-back/chargeback balancing across diversified clouds across multiple clouds Big Data/Analytics Little or no BDA strategy Department-level BDA strategy Business unit-level BDA strategy Enterprise-wide BDA strategy BDA outputs have little influence on BDA outputs have some influence on BDA outputs have strong influence on BDA outputs have significant influence on decision makers decision makers decision makers decision makers IT Organisation IT/LOB operate on a request/ IT/LOB are aligned for specific functions IT/LOB are aligned across all IT/LOB are aligned across all requirement basis IT workforce planning is 12-month meaningful activities meaningful activities Less likely to engage in IT hiring plan IT workforce planning considers future IT workforce planning includes workforce planning IT infrastructure and career planning career planning and infrastructure scenarios n = 200 Note: Figures may not add to 100% due to rounding. Organisations were measured and ranked by behaviours in each of the aspects that were most closely linked to positive business outcomes. Only 16% of the organisations in our UK study displayed the greatest degree of future readiness and were classified as Future Creators. They excelled across all four key aspects and reported the strongest results. Above is a summary of the four levels, as well as their key characteristics. 6
8 Future-Ready Organisations Enjoy Better Business Results 59% Future-Ready respondents that saw an increase in customer satisfaction IDC s Future-Readiness Enterprise Study showed that the higher organisations move on the future-readiness scale within individual aspects and across multiple aspects, the better their business outcomes across a range of metrics. The difference can be seen by comparing business outcomes between the most future-ready organisations and the least futureready organisations. KPI Improvements Seen over the Past Three Years Increase in customer satisfaction Increase in new customer acquisition Reduction in time to market for new products and services Increase in employee retention Increase in revenue from new products Increase in revenue or sales/bookings Increase in profit margin 15% 15% 19% 19% 23% 21% 33% 34% 43% 40% 50% 48% 54% 59% Increase in employee productivity 20% Future Creators n = 84 Current Focused n = % 7
9 The Future-Readiness Journey To maintain future readiness, organisations can t become complacent they will need to think of future readiness as an ongoing journey and stay nimble, adaptable, and innovative to maintain their competitive edge. IT Infrastructure has become the backbone of any fast growing business CFO, UK IT Services Company The economic benefits are clear future readiness corresponds to better business outcomes. But organisations that don t find themselves at the top of the scale should not be disheartened. Future readiness is an ongoing journey, and organisations can see significant improvements in business outcomes from increasing their future readiness regardless of their starting point. 8
10 Future Creators have innovative IT that seeks out new ways to do things How does your company adopt and use information technology and IT service delivery models? 12% 51% 16% 28% 43% 16% 50% 9% Future Creators are more likely (50%) to have an IT capability that is able to support their need for innovation and agility by actively engaging with business units to bring new technologies into play for competitive advantage. This contrasts with Current Focused organisations that are most likely (51%) to invest only in line with their competitors. Current Focused (n=41 Innovator Future Aware (n=77) Our IT organisation works closely with our business units to aggresively integrate technologies into customer facing programs and internal business initiatives. Future Focused (n=49) Early Majority Future Creators (n=33) To the extent our competitors are using technology to engage with customers and employees our organisation strives to make similar investments and use similar service delivery models to stay competitive. 50% Future Creators have IT capability that can support the agility and innovation that a fast moving business requires 9
11 Future Creators Moving Quickly to Private Cloud Future Creators are moving most quickly (16%) to transform their IT infrastructure from one of individual systems and silos supporting specific applications to a private cloud model of pooled compute, storage and networking. This gives them the flexibility to deploy new workloads more easily as business needs change. How does your company adopt and use information technology and IT service delivery models? 16% 7% 9% 8% 2X Future Creators Future Creators are twice as likely to run their IT infrastructure as a private cloud with homogenous compute, storage and networking. Current Focused (n=18) Future Aware (n=44) Future Focused (n=24) Future Creators (n=14) 10
12 Converged Infrastructure Provides Direct IT Infrastructure Benefits Converged infrastructure integrated bundles of hardware and software components grouped into a single optimised package allows organisations to better utilise their existing IT assets. It provides an agile, scalable foundation organisations can rely on as they change business processes and launch new services. Lower operating costs Improved business agility Converged IT Infrastructure Benefits % respondents 50% 49% Future-Ready respondents that saw lower operating costs Greater IT staff productivity 46% 50% Faster service/application provisioning 45% Greater resource utilisation 42% n = 100 Greater business agility/flexibility to adapt to changes in the market 40% 11
13 Future-Ready Organisations Have a More Sophisticated Approach to the Use of Converged Infrastructure While many organisations cite converged infrastructure benefits in terms of IT improvements, a higher percentage of futureready organisations are seeing business benefits from their converged infrastructure. For example, comparing Future Creators with Current Focused, we see: ture Creato 63% Of future creators see faster service provisioning as a significant benefit delivered by converged infrastructure, while only 25% of current focused see it as a significant benefit. By comparison, 16% of Current Focused and 48% of Future Creators see the ability to allocate IT staff to innovative projects as a significant benefit of converged infrastructure rent Focus While 20% of Current Focused and 41% of Future Creators see greater business agility as a benefit of converged infrastructure. 12
14 Future Creators More Closely Measuring Infrastructure Utilisation Future Creators are measuring not only more frequently but also more accurately. They are most likely to use an integrated suite of tools to measure utilisation rates (77%) and not rely on ad hoc or manual processes for measurement compared with Current Focused (30%). Measure Compute, Storage, Network Utilsation Daily/Ongoing or Regularly 93% 66% Future Creators that use integrated tools to measure utilisation rates 77% 33% 33% Current Focused (n=18) Future Aware (n=44) Future Focused (n=24) Future Creators (n=14) 13
15 Cloud Provides Agility, Flexibility, and Control Cloud adoption isn t about a specific product or service delivery model. It reflects an approach to application design, deployment, and delivery that allows organisations to get more effective use out of their own IT and data assets. Cloud gives organisations the ability to scale services up and down more quickly to better align with real business cycles and meet fluctuations in demand. Higher service availability Enablement of Big Data/analytics Greater developer productivity Improved business agility More effective use of infrastructure and data resources 46% 46% 46% 45% 52% Future Creators that find cloud enables higher service availability Faster service creation/launch of customer facing applications (faster time to market) Faster adoption of new business applications 38% 37% 52% n = 119 Faster service/application provisioning Reduced business risk Enablement of mobile device use in the enterprise 37% 34% 31% 14
16 Future Creators More Likely to Have Highly Diversified Cloud Strategies Future Creators are not only making more extensive use of cloud but also have more sophisticated cloud strategies using the right cloud option for each requirement. Can Easily Choose Among Three or More Cloud Options While Managing Them as a Single Resource 58% 23% Future Creators that find cloud enables higher service availability ture Creato 58% 6% 6% Current Focused (n=20) Future Aware (n=51) Future Focused (n=35) Future Creators (n=13) 15
17 Big Data and Analytics (BDA) Drives Business-Level Benefits for Future Creators Faster access to relevant information 60% Big Data and analytics (BDA) is critical for business innovation and transformation. It allows organisations to capture insights from, and better monetise, their data by getting the right information to the right individuals at the right time. BDA benefits go beyond data democratisation, with benefits including better ability to predict events. Better ability to predict events or outcomes Better information sharing throughout the organisation 44% 49% Faster reaction time to external events 44% Future Creators that find Big Data and Analytics gives their organisation faster access to relevant information 60% n = 116 Reduced cost of report generation Reduced data quality problems 43% 41% 16
18 Future Creators Providing More Access to BDA at All Levels Future Creators are also most likely to provide access to BDA (Big Data analytics) directly to executives to a significant extent, with 100% providing access compared with 77% of Current Focused. This implies that Future Creators have trust in the data. Staff don t have to spend time cleaning and checking data and making data actionable before sending it upstairs for decisions. Future Creator executives that have access to BDA at the right time 100% Have Access to BDA at the Right Time to a Significant Extent 77% 21% 60% 51% 77% 100% 81% 80% Current Focused (n=28) Executive Future Aware (n=41) Future Focused (n=23) Future Creators (n=24) LOB Operational Staff 17
19 IT Organisational Practices Are the Catalyst for Future Readiness While successful converged infrastructure, cloud, and BDA strategies are the technological underpinnings of future-ready organisations, effective and aligned IT organisations are also essential. An effective IT organisation contains the right people with the right skills to implement and maximise the benefits of those technologies. IT Organisation Very/Extremely Capable of Supporting Business Needs 82% 93% 97% Future Creators that find their IT organisation is very capable of supporting business needs 97% ture Creato 49% Current Focused (n=41) Future Aware (n=77) Future Focused (n=49) Future Creators (n=33) 18
20 Future Creators Have a Continuous Improvement Approach to IT Just as with their technology infrastructure, Future Creators continually work to improve their IT departments. This includes regularly and continuously improving the skills of the IT staff and measuring the success of the IT organisation through the lens of the LOB stakeholders. IT Organisation Has Service-Centric Culture, Tracked Outside In 93% 95% 67% Future Creators that find their IT organisation has a servicecentric culture 95% 35% Current Focused (n=41) Future Aware (n=77) Future Focused (n=49) Future Creators (n=33) 19
21 Pitfalls to Avoid Achieving greater levels of future readiness does not come without risks and pitfalls to avoid. Below are a few of those pitfalls. Going in without a plan Companies need to be deliberate and thoughtful about their approach to becoming more future ready. Becoming future ready involves more than simply throwing new technology into the IT mix. Proprietary system Key to being future ready is the flexibility to adapt to unforeseen circumstances. Locking into a proprietary offering or framework limits the organisation s flexibility and increases the risk of choosing a technology dead end. Big bets Organisations should take a stepwise approach to improving their future readiness, building incrementally on the IT infrastructure and practices they have in place. With so much of the business dependent on IT, upgrading the infrastructure amounts to performing an organisational heart transplant. 20
22 Essential Guidance Future readiness is critical to business success in today s mobile and data-driven world. To improve future readiness, companies must take several steps, including: >> Focus on long-term outcomes Future-ready enterprises are less focused on cost take-out and more focused on strategic business outcomes such as enhanced organisational agility, greater service availability, and more effective IT staff allocation. >> Take steps to improve your future readiness, no matter where your starting point is Set well-defined intermediate goals aligned with your long-term strategy to become more future ready. Regardless of where your organisation is now, moving up a single level or focusing on a specific aspect leads to significant improvements. >> Start your future-readiness journey by developing an overall strategy Future Creators have a strategy that drives their business decisions across technology, processes, and IT organisational practices. >> Focus on the areas that will have the biggest impact on your business Though future readiness is a journey, there is no single path to get there. >> Assess your own state of future readiness, and get help if you aren t where you need to be IDC has developed a Future-Ready Enterprise Index tool, which is available at You can use this tool to assess where you are on the future-readiness curve today. 21
23 Methodology The information for this InfoBrief came from IDC s June 2015 global Future-Ready Enterprise Study, sponsored by Dell. In the United Kingdom, IDC surveyed 200 members of senior and executive management in IT and lines of business as well as information workers with knowledge of converged infrastructure, Big Data, and/or cloud. They came from organisations with 100 employees or more across a broad range of industries. Survey respondents were asked about their current use of converged infrastructure, Big Data, and cloud as well as their IT department organisational practices. In addition, they were asked about a variety of KPI metrics, enabling IDC to create an index linking IT infrastructure and organisational metrics to KPIs. IDC developed the future-readiness levels Future Creators, Future Focused, Future Aware, and Current Focused using the following methodology: Responses to all questions in the survey were scored on a four-point maturity scale. For example, for the question What percentage of Current Focused Future Aware Future Focused Future Creators infrastructure is supported by hybrid cloud? 0% = 0 points and 50%+ = 3 points. Break points were manually normalised. IDC performed statistical analysis to identify questions best correlated to positive business outcomes. For example, the question What is the virtualisation rate of your IT infrastructure? is highly correlated to the business outcome % revenue growth over the past three years. IDC then selected a subset of 16 questions with the highest statistical correlation that also balanced the four key areas: converged infrastructure, cloud, BDA, and future-minded IT organisational best practices. Next, IDC created a maturity scoring histogram for all responders for the 16 questions to identify and score ranges for the four maturity categories and identified natural cutoffs based on mean and standard deviations. The survey was supplemented with two focus groups, one with senior IT managers and one with senior line-of-business managers. 22
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