CIOs and CFOs say Delays in Digital Transformation Projects Hurt their Organizations

We keep hearing from the vendor community about the benefits of what I have characterized a “Infostructure” transformation—which involves moving to more software-defined architectures for “E”everything including computing resources, desktops, storage and networking functions. What we tend not to hear about very often from C-levels in their customer bases is the opportunity costs for not transforming in a timely manner.  With the publication of some interesting research by virtualization solutions provider Canopy, who provides Atos cloud powered by EMC and VMware solutions, insight on how CIOs and CFOs feel is available.  It is in a word, “illuminating.”

Missing out on transformation optimization value

Canopy’s research conducted by Vanson Bourne, surveyed 950 CIOs, CFOs and business decision makers in mid-market and enterprise firms in the U.S., U.K., Germany, France and the Netherlands (including 200 in the U.S.). And, while the researchers found that digital transformation is pervasive throughout enterprises, touching everything from customer service, sales and business development through to innovation, product development and talent attraction, the C-levels are concerned they are not moving fast enough.

A few findings from the report are worth mentioning:

• 75 percent of CFOs think their business is missing out on revenue opportunities by not having the right cloud applications and infrastructure in place to support digital business transformation.
• In fact, U.S. CFOs believe their business missed out on an average $41 million of revenue last year by not having the right cloud solutions in place to support their digital transformation.
• As a result, 81 percent of CIOs and CFOs fear their business will become uncompetitive with a large majority (74 percent) of them estimating this will happen as fast as the next 15 months.
• US-based CFOs estimated that if enhanced cloud capabilities were in place in their company, double digit growth could be achieved in 2015 with an average $75M revenue boost.
• 94 percent of respondents recognized the need to embrace cloud based applications and infrastructure to deliver digital transformation.
• 68 percent admitted that a lack of cloud investment was holding back vital digital initiatives.

To put it bluntly, the report does seem to confirm that we have reached a tipping point. This can be seen as good news for solutions vendors assuming there is willingness by C-levels to invest in next generation solutions, particularly in virtualization, SDN and security.

Source: Canopy (click to enlarge)

 “As our survey highlights, digital must be in the DNA of every department to help the business maximize market share and revenue,” said Jacques Pommeraud, Canopy CEO. “While ‘digital’ is a widespread term today, right now digital transformation is only happening in pockets. One key to unlocking digital transformation is cloud computing. From hospitality and retail to manufacturing, those emerging as winners are taking advantage of these digital capabilities.”

Additional insights to be gleaned from the report include findings about what is holding back customers from pulling the trigger on increased investment. These include:

• Concerns due to security (60 percent); data protection (40 percent); protection of intellectual property (26 percent); fears of vendor lock-in (36 percent)

Global CIOs acknowledged the missed opportunities and threats involved if IT doesn’t move to a more cloud based approach in the next 12 months including:

• 38 percent globally(53 percent in the U.S.) reported it would lead to reduced staff productivity
• 34 percent globally (37 percent in the U.S.) reported increased time to market
• 33 percent globally(39 percent in the U.S.) reported a reduced ability to service customers in new ways 
• 35 percent globally (33 percent in the U.S.) reported a risk of data theft

Edited by Maurice Nagle