Research from Avanade has revealed that businesses that take steps to modernise their IT in today’s digital world can expect to increase revenues by an average of 14%. In addition, updating and enhancing IT systems and approaches can reduce the cost of business operations by over 13%.
The study focused on investigating how closely IT modernisation is linked to the success of large organisations’ digital transformation journeys, the key reasons for modernising and the barriers to doing so.
One of the most significant findings was that conventional IT systems are not fit for purpose. 65% of senior IT decision makers believe that the typical systems and approaches to IT in use today are not adequate to address the emerging digital business requirements.
Modernised IT systems and two approaches are needed, with 93% of senior IT decision makers agreeing that both a predictable approach to optimise core systems and an exploratory approach to innovate the business are both needed simultaneously. Appropriately, more than half of all respondents already expect to implement robotic process (56%), intelligent (61%) or cognitive (59%) automation technologies (including AI) in the next three years.
A cloud-first approach is necessary for a hybrid world, with 87% of respondents indicating their organisation is planning to implement vendor-provided cloud stacks, such as Microsoft Azure Stack, to integrate their on-premises data centre with public cloud. However, almost half are still running the majority of their custom applications on-premises.
IT benefits alone will not be enough to justify the business case for modernising with 93% of senior IT decision makers believing that business ROI benefits must be included alongside IT benefits to justify the need for modernisation. 87% percent of respondents are convinced that their organisation’s executives don’t fully appreciate the potential ROI of IT modernisation projects.
Vendor expertise is key to embracing new technologies, processes and approaches with senior IT decision-makers recognising the value of getting support from outside expertise, most notably in modern software engineering (84%) and cloud migration (81%).
“There is clear consensus that modern software engineering approaches and process automation technologies are key to addressing emerging digital business requirements, and promise huge rewards for businesses equipped to harness their full potential,” says Tyson Hartman, Global Platforms, Services and Offerings executive at Avanade. “It’s an exciting time for IT decision makers who can champion modernisation, articulate the business value and put in place the right skills to implement successfully.”