Tuesday, 17 May 2016 15:47

Digital transformation held back by legacy constraints

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Business leaders want to embrace digital transformation as a critical success factor but the inflexibility of legacy systems, inadequate IT skills, and lack of budget are holding enterprise back.

Brocade, a leader in networking solutions, has launched its latest global study ‘Unlocking the Power of Digital Transformation: Freeing IT from Legacy Constraints’, that identifies businesses are missing opportunities to unlock innovation more quickly and more effectively due to legacy technology and historical misperceptions about the role of IT departments.

According to the report, 79% of IT teams in Australia felt that if they had more opportunity to be flexible in their approach to technology, benefits would include the elimination of shadow IT (35%), increased competitiveness (34%), more time to focus on innovation (24%), a 12% increase in revenue and 10% decrease in costs over the next 12 months.

Gary Denman, managing director for ANZ, Brocade, said: “We know from experience, and our report confirms, how critical IT is to enable innovation, but too many businesses are restricted in their ability to adopt digital transformation and drive this change. It’s clear that if IT departments could spend less time ‘keeping the lights on’, then they could devote more time to creating value, reducing costs and increasing revenues. Organisations need to be more fluid with their uptake and deployment of technology.”

It wasn’t supposed to be this way (the following figures are localised for Australia)

The new study looked at the current state and perceptions of the IT department in U.K, U.S., Germany, Singapore, France and Australia. It revealed that daily tasks in Australia, such as maintaining data security and privacy and legacy systems, are taking so much time (75% and 70% respectively), that opportunities to innovate and transform are being missed in many businesses. Also, 66% felt frustrated when the IT department could not readily deliver what the business demanded.

“For the last two decades, legacy IT infrastructure held back businesses from innovating on their terms,” said Denman. “The IT department has found itself having to say ‘no’ to new business opportunities too often. It wasn’t supposed to be that way.”

“Modern New IP technologies unlock the power of the network as a platform for innovation enabling the IT department to be able to say ‘yes’ to all kinds of business opportunities that surface daily in today’s era of digital transformation. The network is the critical key to unlocking the power of digital transformation and freeing the IT department from legacy constraints that hinder innovation.”

Freedom from legacy ‘lights on’ approach critical to future innovation and performance

Digital transformation is a big priority, yet IT professionals are faced with making trade-offs that impact their ability to embrace new technologies and approaches. 90% are currently adopting digital transformation strategies, with 100% claiming their CIO views this as vital to achieving business objectives, yet 93% state they are restricted in their ability to support it adequately. This is due to lack of budget (46%), security concerns (40%), the inflexibility of current systems (26%), and the time drain of maintaining legacy systems (14%). More alarmingly 34% said that the limits of legacy technology are preventing their organisation’s IT department from delivering even on immediate business demands, let alone enabling innovation for the future.

Unlocking the door to better future business performance

94% identified situations in the last year where the IT team has had to defer or decline requests that would have clearly benefitted the business, with 53% saying that these situations resulted in missing short-term business benefits and 74% missed long-term benefits. According to the report, more than 78% felt that if they had more opportunity to be flexible in their approach to technology, there would be clear business benefits, including increased competitiveness (34%), more time to focus on innovation (24%), and the elimination of shadow IT (35%). Respondents also claimed that the business’ bottom line would benefit, projecting that the ability to innovate to a greater degree could result, on average, a 12% increase in revenue and a 10% decrease in costs over the next 12 months.

“As companies move to digitise their businesses, they need an underlying network infrastructure that allows them to innovate quickly. We believe the network must become a platform for innovation to develop, deliver and secure applications. This is best achieved through implementing network architectures that are software-centric, open and agile, such as the New IP,” said Denman.

The research was conducted by independent research house Vanson Bourne in April 2016. 630 decision-makers in organisations with more than 500 employees in the U.S., U.K., France, Germany, Singapore and Australia were surveyed.

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Ray Shaw

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Ray Shaw ray@im.com.au  has a passion for IT ever since building his first computer in 1980. He is a qualified journalist, hosted a consumer IT based radio program on ABC radio for 10 years, has developed world leading software for the events industry and is smart enough to no longer own a retail computer store!

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