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Digital Transformation: Funding the Ongoing Journey

 

If a technology solutions salesperson walks out of your office without playing the "digital transformation" card, he or she is not likely long for that job.

Vendors, whether through strategic vision or competitive necessity, have latched onto the aspirations and concerns of business customers who fear digital disruption.

"Digital transformation rocketed to the top of mind for brands, enterprises, and organizations in 2016," writes R. "Ray" Wang, founder of Constellation Research and author of Disrupting Digital Business. "The fear of being disrupted by non-traditional competitors, margin pressure from competitors, and the realization that digital was more than just technologies gave boardrooms and CXOs the political capital to invest in digital transformation projects."

In fact, IDC recently asserted that "While the investment strategies may differ from company to company, the objective remains the same: to reimagine and reconstruct the business to compete in the increasingly digital economy that's platform-powered and ecosystem-enabled."

'Gobs of money'

But that can be an uncomfortable seat for the CIO trying to make forward-looking decisions while maximizing the return on existing investments. When it comes to transformation, Tech Target's Antone Gonsalves says, "the tech industry has turned the phrase into a forewarning that failing to spend gobs of money on technology today will lead to your company's demise."  

Of course, sorting through vendor hype has always been part of the CIO's charter. But the risks of poor decisions may never have been greater. That may be why many pundits and practitioners have latched onto Gartner's advocacy of a bimodal approach to IT, with one mode focused on agility and the other on stability and reliability.  

Wang, however, strongly disagrees with that approach, arguing that "the over-hyped, bi-modal approach to IT and digital transformation is a flawed fallacy perpetuated by ivory tower, non-pragmatic legacy research firms." That, he indicates, leads to one-off initiatives, when transformation requires a structured, organizational design.  

But a strategic, sustained approach to digital transformation shouldn't mean we have to throw the baby out with the bathwater. Many CIOs simply can't justify terminating highly functional, mission-critical applications and migrating them to the cloud. Instead, they need to free up resources for those transformational projects by squeezing out maintenance and support costs.  

Knowledge pays

Savvy customers can try to negotiate maintenance discounts from the likes of Oracle and SAP. But the reality is that many organizations feel they lack options, and therefore the leverage, to pull this off.  

In fact, there are many alternatives available, ranging from open source to different cloud options; the issue is to find one that will work over time, then obtaining the funding to get it done. One place to look for savings is in contracts that lock the organization into outdated support models that entail rising support fees and myriad maintenance costs, such as forced upgrades just to continue full support services.   

What's important is to stay focused on the big picture and take advantage of the right options, such as a third party focused on the task of software support that has dedicated, skilled staff and knowledge acquired across multiple customers. With more efficient staffing and support models you can afford to play the transformation card by freeing up the precious resources necessary to get in that game.    

Evaluating the Potential of Third-Party Support in Reducing IT Costs

Gartner offers best-practice techniques to help you learn how you can significantly reduce software maintenance and support costs for both on-premises and SaaS software environments.

Pete Bartolik, Guest Blogger

Mr. Bartolik has researched and written about technology and vertical market segments for many years and has worked on many market research, writing and social media projects. He was news editor of the IT management publication, Computerworld and a reporter for a daily newspaper.