Many CEOs and CIOs are now facing the “Digital Transformation” challenge of integrating Cloud, Mobility, Big Data Analytics and Social Media implementations to meet customer and market expectations.
IDC’s digital transformation predictions for 2016 and beyond are that “The disruptive impact of digital transformation is about to be felt in every industry as enterprises ‘flip the switch’ and massively scale up their DX initiatives to secure a leadership role in the DX economy.” Frank Gens , Senior Vice President and Chief Analyst at IDC, predicts that “In the next two years, two-thirds of Global 2000 CEOs will put DX at the center of their growth and profitability strategies.”
The 2016 Gartner CIO Agenda Report predicts that “In the next five years, CIOs expect digital revenues to grow from 16% to 37%. Similarly, public-sector CIOs predict a rise from 42% to 77% in digital processes.”
However, some other recent reports are sending warning messages about digital transformation.
A January 2016 Fujitsu Retail Digital Transformation report, Walking the digital tightrope, is based on a survey of more than 600 European CEOs and senior IT decision-makers. The survey findings are summarised in a February 23, 2016 Fujitsu Press Release, Four in Five Retail Digital Transformation Projects ‘a Gamble’ According to Fujitsu Research. Key findings are :
“Although most retailers say they are confident in their approach to digitalization, the vast majority admit that their digital transformation projects are ‘a gamble,’ and have no unifying strategy in place.Competing digital agendas across the businesses of many retailers, plus a failure to unify priorities is seen as one of the biggest threats to digitalization success.Retailers are under pressure to digitalize faster, but they are not confident that they are making the right decisions to drive success The majority of retailers are prioritizing digital when it comes to IT spend; however most would prefer a more balanced approach to investment More than three-quarters (76 percent) admit their organization would benefit from a more balanced approach to digital adoption”
The Cloud is key to digital transformation and the IDC FutureScape: Worldwide Cloud 2016 Predictions include the comment that “Digitization and transformation to virtualized, on-demand provider-based services are driving very rapid internal IT change. IT buyers are shifting steadily toward cloud-also and cloud-first strategies”
But there are two aspects to Cloud strategies: Public Cloud or Private Cloud? A 1 February 2016 Wikibon report describes “the increasing demand from internal business groups to have more simplified access to Cloud Computing resources. In essence, the user-level expectation, from developers or line of business users, is being defined by the Public Cloud services.” However, the Wikibon analysis focusses on a troubling question: why do so few Private Cloud implementations operate like Public Cloud services? The report suggests that:
“in order for in-house IT organizations to remain valuable and relevant to their lines of business, they need to be able to deliver Private Cloud services that are competitive (pricing, agility, breadth of services) with Public Cloud services. The IT focus has to shift away from operational “keeping the lights on” to driving new IT business value at a much faster rate.”
A key Wikibon recommendation is that ” For CIOs and IT organizations that are required to build Private Cloud Computing services, due to security, compliance or legacy-integration issues, it is critical to be setting the bar higher in the services that are delivered to the business.”
The report provides a link to Wikibon’s True Private Cloud framework, which “ allows IT to reduce costs and focus less on non-differentiated infrastructure capabilities, and allocate greater time and resources towards the application-level services that can differentiate the business.”
See Public Cloud IaaS is 3.5X the Size of True Private Cloud Adoption, for details of the analysis, the findings and further recommendations.