Overcoming the #1 Barrier to Digital Transformation

David Rowe
Chief Product Officer & EVP, Global Transformation
3 min read

For years, IT has had clearly defined responsibilities: Keep critical business systems up and running, control costs and meet security and compliance requirements. Even today, most of your IT budget is likely spent keeping the lights on. But this traditional focus is holding organizations back in an era of accelerating focus on customer experience enabled via digital transformation.

The role of IT is evolving quickly and becoming more prominent. Your key priorities should be shifting from predominantly maintaining current operations toward helping your company achieve its business objectives, using technology as a transformative tool. More than ever, successful IT teams are focusing on growing the business, improving margins and expanding globally, through strategies such as improving customer experience and enabling new business models.

CEOs consistently cite business growth as their number-one priority. Digital innovation is now frequently identified by CEOs as a top priority for achieving that business growth. Digital transformation presents numerous new challenges, but also creates exciting opportunities. CIOs can’t help the business digitally transform and grow without expanding their mindset from maintaining the status quo to including a relentless focus on experimenting and innovating. But nothing can be achieved without first freeing up funds to invest in these new digital initiatives.

Is Budget Holding Back Your Business?

All too often, opportunities for business transformation are hindered by insufficient budgets. The number-one barrier to digital transformation is insufficient budget and resources, according to a new survey of 4,000 businesses by research firm Vanson and Bourne for Dell Technologies.

According to the survey, approximately 8 in 10 respondents stated that digital startups pose a threat to their organization, now or in the future. They understand that these nimble competitors are more agile, employ data more effectively and are early adopters of smart technologies.

To keep pace and fend off these startups, organizations have made customer engagement and satisfaction a top priority. They are also increasingly focusing on mobility and social media, as well as harnessing data for informed decision making.

Digital opportunities are in sight, but only 32 percent of survey respondents said they were doing well organization-wide.

Are You Locked into Traditional Models?

According to IDC, organizations spend as much as 90 percent of IT budgets on current systems. This leaves little budget for driving business transformation and new digital initiatives. Ensuring a robust, secure platform for business operations is table stakes for the IT team, but current systems and the accompanying legacy vendor business models are now consuming the vast majority of IT resources, preventing needed investments in digital transformation.

If maintaining the status quo is limiting your innovation budget and keeping your business from meeting its objectives, how can you take control of costs and regain your momentum? One area with huge IT savings opportunity is the traditional legacy software vendor model for maintaining ERP systems, including maintenance and support fees.

To fund digital transformation, take a close look at your total maintenance costs and related ROI for maintaining enterprise software from big ERP vendors such as Oracle or SAP. To truly understand your total costs, you need to consider more than just maintenance fees — which are typically 22 percent of upfront licensing costs, but paid every year. Traditional ERP platforms also require ongoing expensive upgrades and other costs related to inefficient software vendor support models, including the cost to support customized code and a one-size-fits-all support model. Annual maintenance fees are only the tip of the iceberg, with total maintenance costs about double your maintenance fees.

With the right approach to maintenance, you can cut your annual support fees in half, in addition to delaying or avoiding costly product upgrades for even more savings, freeing up precious IT resources for more important priorities. You can quickly estimate your savings with this online software support savings calculator.   

The Ability to Innovate Quickly Is Key

Innovation agility is an effective strategy for driving transformation in the real world. With an innovation agility approach, you can innovate far more quickly by optimizing your core IT systems to liberate resources — your people, your money and your time — so you can reinvest them in initiatives that most directly and rapidly impact your business. The alternative, waiting for new ERP platforms from legacy vendors and then spending vast sums to re-implement onto these future, unproven systems, puts you behind in the race to competitive advantage in a digital world.

By aggressively investing in digital initiatives using optimized resources today, you put innovation foremost and avoid the Sisyphean task of first perfecting an elusive “digital core.” Focus digital investments at the point of impact with systems of engagement, where you engage with customers, employees and partners, not on yet another reimplementation or upgrade of already robust systems of record.

Key Takeaways

Industry analysts frequently recommend managing mature ERP applications in collaboration with new digital investments like cloud, social, mobile, IoT and analytics in a hybrid IT configuration. A hybrid IT approach is the best of both worlds, combining the robust foundation of your core ERP applications with the innovative digital investments you need today to create competitive advantage.

If your IT budget is keeping your organization from meeting today’s challenges, you’re not alone. With the right approach to IT optimization, you’ll be able to move your business forward to unleash the potential of a digital economy. Don’t wait to innovate.

David Rowe

Chief Product Officer & EVP, Global Transformation

Mr. Rowe serves as Chief Marketing and Product Officer & EVP, Global Transformation. In this role, he is responsible for Rimini Street’s global product and marketing strategy and execution. He also leads initiatives to reinvent, transform and scale Rimini Street’s business for billion-dollar revenue operations.

More from David Rowe

On-Premises ERP Innovation: A New Path Forward without the Platform Upheaval
Blog
On-Premises ERP Innovation: A New Path Forward without the Platform Upheaval
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
3 min read

The enterprise software landscape witnessed a seismic shift with our announcement of the partnership with ServiceNow, made public during their Q3 2024 financial results. Rimini Street and ServiceNow’s collaboration introduced a groundbreaking approach for organizations running on-premises ERP systems to access cutting-edge automation, visibility and AI capabilities without the traditional requirement of a complete migration […]

Rimini Street + ServiceNow
Blog
Rimini Street + ServiceNow
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
3 min read

Titans of Transformation Partnerships that combine deep expertise with cutting-edge innovation are rare and invaluable. The recently announced collaboration between Rimini Street and ServiceNow represents just such a union – a powerful alliance poised to tackle some of the IT industry’s most formidable challenges. This partnership brings together two companies with parallel 20-year histories of […]

Three Ways CIOs Must Rethink Cloud ROI
Blog
Three Ways CIOs Must Rethink Cloud ROI
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
4 min read

While cloud workloads will continue to grow, savvy tech leaders must take a step back and evaluate the true ROI of moving to the cloud. Here’s three ways to get started. If there’s one habit CIOs should consider adopting, it’s a commitment to take a critical look at their cloud Return On Investment (ROI). Over […]

Delivering More Value by Supporting More Software
Blog
Delivering More Value by Supporting More Software
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
2 min read

Need to focus your limited IT resources on innovation while ensuring your complex software portfolio continues to support mission-critical operations? A new service offering called Rimini Custom™ can help. Here’s how. As an IT leader, your purview is growing more—not less—complex every day. In fact, an eye-opening report from Salesforce indicated that, on average, organizations […]

Feeling the Pressure of Moving ERP to the Cloud? It’s Not as Urgent as Vendors Would Have You Think.
Blog
Feeling the Pressure of Moving ERP to the Cloud? It’s Not as Urgent as Vendors Would Have You Think.
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
4 min read

Implement hybrid IT instead and invest the savings in transformation.   An October 2020 Diginomica article, “Don’t be a sheep – challenge the call to re-platform ERP” from author Brian Sommer, contains some pragmatic advice for CIOs feeling the pressure of moving ERP to the cloud.   It’s not necessary to replace or re-platform important […]

yellow paper airplane
Blog
On-Going IT Response to the Global Pandemic: The View from a Front-Row Seat
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
4 min read

In January’s “2020 State of the CIO Executive Summary,” the news was good for CIOs… They were getting increased recognition from CEOs and colleagues for their growing and essential leadership role in business strategy, innovation, and revenue generation — while decreasing time spent on important yet “back-office” activities such as optimizing the enterprise IT infrastructure […]

How to Join the Digital Vanguard
Blog
How to Join the Digital Vanguard
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
3 min read

Is your organization a digital laggard or a member of the digital vanguard? I’ve been reading Deloitte’s 2018 CIO Survey, which makes a point of distinguishing between “vanguard” organizations where IT actively contributes to creating new businesses and business opportunities and everyone else. The traditional role of the CIO has been to be an operational […]

Strategies for Supporting SAP S/4HANA From “Wait And See” To “Full Speed Ahead”
Blog
Strategies for Supporting SAP S/4HANA From “Wait And See” To “Full Speed Ahead”
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
5 min read

Clients of Rimini Street’s support for SAP have the freedom to make independent decisions about S/4HANA – but that doesn’t necessarily mean they reject SAP’s reinvention of its ERP software. Some are moving forward with S/4HANA, while continuing to rely on Rimini Street for high quality and cost effective support of their existing SAP Business […]

Biggest Obstacle to Innovation, IT Leaders Say: “Keeping the Lights On”
Blog
Biggest Obstacle to Innovation, IT Leaders Say: “Keeping the Lights On”
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
3 min read

Businesses want to innovate faster because they know successful innovators tend to be the most successful businesses. Yet if you survey IT and finance leaders, as we did recently in conjunction with Vanson Bourne, a technology market research firm, you will find many are dissatisfied with the pace of innovation happening in their organizations. The […]

Why a Stable, Available Business Platform is Key — Today and Tomorrow
Blog
Why a Stable, Available Business Platform is Key — Today and Tomorrow
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
3 min read

As the role of IT evolves from keeping the lights on to helping shape business strategy, technology leaders are challenged to find room for those strategic projects in their schedules and in their budgets. In a recent poll by CIO, 72 percent of those surveyed admitted they are struggling to balance business innovation and operational […]

Video: SAP Expert Vinnie Mirchandani Sees No Rush to S/4HANA
Blog
Video: SAP Expert Vinnie Mirchandani Sees No Rush to S/4HANA
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
4 min read

SAP is in a hurry to get customers to move to its next generation S/4HANA platform. Yet most SAP customers are in no hurry to move — nor should they be, according to SAP watcher Vinnie Mirchandani. Vinnie is the author of two books focused specifically on SAP, SAP Nation and SAP Nation 2.0, and […]

Smart Strategies That Will Boost IT Cost Optimization
Blog
Smart Strategies That Will Boost IT Cost Optimization
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
3 min read

Digital transformation is picking up speed. It’s driving businesses to rethink their traditional imperatives and bringing a new focus on customer engagement and disruptive business models. As companies emphasize new priorities, they need to optimize inefficient processes and reduce burdensome costs that are a drag on their business. For IT, that requires some tough choices. […]

What You Need to Know About Bimodal IT
Blog
What You Need to Know About Bimodal IT
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
3 min read

The digital economy is all about fast innovation and getting new products to market more quickly than competitors. IT needs to step up its game to help drive innovation, without sacrificing top priorities such as compliance, cost control and maintaining availability. The stakes are high even for massive, successful businesses. Today, 50 percent of the […]

Three Ways CIOs Can Successfully Support Business Objectives
Blog
Three Ways CIOs Can Successfully Support Business Objectives
David Rowe
David Rowe
Chief Product Officer & EVP, Global Transformation
4 min read

It’s no secret that we’re doing business in a fast-paced, disruptive environment. To keep pace with rapid change, IT is becoming more strategic, and expectations are growing. According to CIO, “boards of directors, CEOs and business colleagues are turning to the CIO to lead digital transformations, win customers and drive revenue.” CIOs are feeling the […]