Global Data Centers, a division of NTT Ltd., has released a new report revealing that Digital Transformation projects are stalling due to a ‘hesitancy gap’, as enterprises struggle to navigate the risks and complexity associated with turning innovation from concept to reality. The report, Mind the Hesitancy Gap: There’s No Time to Waste in High Stakes Digital Transformation, shows that 26% of IT teams’ time is wasted laying the groundwork for Digital Transformation projects, costing UK enterprises an average of £2.01 million per year.
Despite a continued focus on Digital Transformation, half of UK enterprises admit their projects are always or regularly delayed as a result of too many barriers to overcome, or too much existing pressure on IT. At the same time, 65% are heavily reliant on multi-cloud services to underpin their projects, creating added integration challenges. In fact, 35% cite the complexity of connecting the range of cloud services and other technologies together as a major barrier to the progression of their Digital Transformation projects.
“In a rapidly evolving landscape, enterprises can’t afford to drag their feet on Digital Transformation, but it’s not surprising that many are feeling hesitant,” said John Eland, Chief Strategy Officer of Global Data Centers. “The complexity of connecting a mix of cloud services and other technologies together adds a significant challenge to overcome before transformation projects can turn into a reality. Adding further strain, there’s the risk that even just a Proof of Concept could have a negative impact on live production systems, leading to service failures that result in reputational or revenue damage. This is understandably causing enterprises concern, resulting in many projects falling behind and innovation to stagnate.”
Stephen Green, CTO, NTT Ltd. UK&I, explains how this issue is directly impacting the data centre industry and it can be overcome.
Up until now many companies have been complacent when it comes to undertaking Digital Transformation initiatives. Prior to the pandemic, our research found many Digital Transformation projects were stalling due to a ‘hesitancy gap’, with over half of enterprises admitting their projects were always or regularly delayed as a result of too many barriers to overcome.
There are a myriad of Digital Transformation blockers contributing to this ‘hesitancy gap’, including cost constraints, reluctance to move out of comfort zones, corporate complacency, lack of energy and corporate culture, among others. These factors have made it extremely difficult to accomplish change in a business – and often it’s the cultural elements that lead to failed projects.
The current global health crisis, however, has forced organisations to respond and adapt rapidly to become digital-first. Interestingly, over the last few months, strategic decisions have been made quickly and as a result, we’ve seen businesses embrace change and new technologies.
How Digital Transformation is driving change in the data centre industry
From a data centre perspective, a key step in our clients’ Digital Transformation projects involves migrating to purpose-built facilities that host Software-as-a-Service (SaaS) and cloud services. Many organisations are leveraging this transition to redesign and enhance their application landscape. In doing so, they are able to service their clients and partners through digital interfaces which, in turn, improves responsiveness and the client experience. Another driver behind moving towards purpose-built facilities is the ability to accomplish new levels of scale and agility which may not have been possible within an organisation’s own facilities.
Due to the impact of the pandemic, this conversation has been heightened. Within these discussions, fundamentally different approaches to business continuity and resilience have come to light. Many organisations, for instance, moved all their employees to work from home instead of the Disaster and Business Continuity sites that had been earmarked. As a result of many companies rethinking their Business Continuity plans, Disaster Recovery Data Centres are fast becoming a vestige of the past.
How this type of innovation looks within the industry
As Disaster Recovery is reimagined, we’ll continue to see significant data centre consolidation among our clients. Another key driver behind this is sustainability, which is fast becoming a key factor when it comes to considering doing business with a company.
Every major data centre provider and company is aspiring to become carbon-neutral. Today, NTT Ltd. is the third largest global provider of data centre space. We’ll be investing a further US$7 billion in the expansion of our data centre footprint and have recently announced the launch of the largest facility in the UK, London 1, which is being built to the very latest standards and is powered with 100% renewable energy sources.
For many organisations, however, becoming carbon-neutral within their own facilities is extremely challenging – the investments required are significant unless done at scale. As the larger providers accomplish the greening of their data centres, we can expect companies to further leverage this capability.
Building confidence in transformation efforts
An area we are focusing on to assist and accelerate our clients’ Digital Transformation efforts is to abstract the complexity of their underlying platforms. This way, they can focus on their desired business outcome while we focus on orchestrating and managing the building blocks.
In practical terms, this means working with industry leading vendors to build and integrate our intelligent solutions and managed services into outcome-focused offerings. Our clients can then deploy these rapidly without having to worry about the low-level detail. It’s similar to buying a car. We all know the car has a gearbox but very few of us really worry about the details of how it works. Instead, we are focused on getting from point A to B reliably.
We start, for example, by providing foundational elements such as the global data centre and network footprint. We abstract the complexity of multi-cloud networking for our clients and allow them to seamlessly connect to various SaaS providers. In many cases, our clients can consume these services simply by enabling them rather than having to build them for themselves. All of this allows them to be very responsive to their markets and clients.
Where clients prefer to kick the tyres, we bring them into our data centre innovation centres where they trial solutions from leading hardware and software providers with proof-of-concepts. Through this process, we have learned what works and what doesn’t, so we help our clients avoid pitfalls.
We also help clients with A/B scenario testing and deliver the outcomes with rapid sprints to reduce the cost of innovation projects. This is a crucial benefit for our clients as instead of purchasing equipment, waiting for it to arrive and finding time to provision it, we give them access to resources within very short time frames, eliminating initial upfront costs.
Finally, we provide a number of industrialised ‘factory’ services or blueprints that our clients can take advantage of. These are tried and tested patterns and practices that once again allow for accelerated adoption with proven outcomes.
How to avoid business disruption as a result of transformative change
The only way to avoid business disruption is to drive change yourself and embrace the changes playing out in your industry, quickly.
To thrive in a new and evolving market, companies need to implement new technologies which improve their business processes. Unfortunately, due to the enormous impact of COVID-19, those that were able to respond to changes quickly have increased their market share, while those that could not are having to rapidly rethink their business models.
How business leaders can work to close the hesitancy gap
A few months ago, I might have offered an opinion highlighting the need to embrace some key emerging technologies and to work with a service provider in a co-innovation project to effect change. But today, all the rules have shifted.
Whether we like it or not, change is upon us and as a result, we are working with our clients to reimagine many parts of their businesses. We’re having to consider a range of different factors such as how they are embracing cloud, while rethinking their data centres and how they are adopting software-defined infrastructure and consumption economics. We’re also looking at how they are connecting with their clients and partners, how they are redefining their office and navigating the future of work.
In most cases, businesses have been nudged across the ‘hesitancy gap’. The new challenge is keeping up the momentum of the past few months and in turn, solidifying the new normal.
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