Welcome to the digital economy. In two years, 65 percent of global GDP will be digitized, driven by digitally transformed enterprises. The pressure to successfully transform the business is driving $6.8 trillion of IT spending between now and 2023, according to IDC’s worldwide IT industry 2021 predictions.
Despite trillions of dollars spent on digital transformation (DX), only 26 percent of organizations have delivered an ROI, according to IDC’s research, and 80 percent of CEOs admit they are under tremendous pressure to deliver value and successful transformation projects.
Successful DX isn’t just about infrastructure and application modernization. It requires organizations to digitalize legacy processes, the workforce, operations, and leadership, and even reinvent business models. IDC estimates that by 2021, a third of organizations will accelerate innovation to support business and operating model reinvention to become more resilient.
To thrive in the digital economy, enterprises require speed, agility, resilience, skills, and the right culture to accelerate innovation. These are delivered by a modern technology framework built on cloud-centric infrastructure, next-gen security, and self-service.
Modernizing legacy business models, management, and culture are key imperatives for organizations to optimize the value of cloud.
The current crisis has been a catalyst for innovation and culture change, even for those organizations that previously struggled to deliver DX. IDC’s COVID-19 Impact Survey from June 2020 (Wave 6) shows that 58 percent of organizations admit their operating models need to be reassessed, as they need to be digitally enabled to ensure they can deliver higher automation, contactless solutions, and greater transparency and trust — all of which are imperative in the new reality. IDC’s COVID-19 research (Wave 11) further found that around 15 percent of organizations are increasing investments in projects focused on business model innovation.
Cloud as an Experience, Not Just a Destination
As cloud becomes the de facto engine for DX, it’s becoming an IT experience and an operating model rather than just a destination. As a result, all DX initiatives are dependent on a cloud delivery model for success.
The cloud journey is not just a technology challenge and is equally disruptive for the organization and its processes. This is why, to fully optimize the benefits of the cloud, it is vital to adapt your business model to a cloud-based model, too.
Organizations can start small with one service, such as virtual desktops delivered via a cloud platform, and add complementary services such as endpoint management or content collaboration — incrementally and at a pace that suits the organization. By incrementally taking services to the cloud, organizations are in control and can forge their own pathway to the cloud. As the operational model shifts to cloud, over time the organization develops new skills and capabilities, enabling a true cloud operating model.
Any CEO under pressure to demonstrate successful DX needs to appreciate that without transforming the way buy, consume, and deliver technology, their success is going to be limited. Shifting from traditional methods of IT consumption such as perpetual licenses to a more cloud-friendly and dynamic as-a-service model can help align operations and processes with IT transformation.
To learn more, listen in to IDC’s webinar on Digital Business Models and the Role of Cloud, sponsored by Citrix, on March 30.
