CSCMP's Supply Chain Quarterly
May 19, 2019
Forward Thinking

Study measures pain points of digital transformation

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Firms report disruption as they adopt upgrades such as collocated data centers, cloud computing, and third-party security, Avant says.

Companies following "digital transformation" plans face an array of challenges in four key areas of updating their technology, including compute IT infrastructure, voice infrastructure, network infrastructure, and cybersecurity, an industry study shows.

Many of these organizations see the effort as an "evolve or die" imperative, including steps like shifting from physical, in-house technology platforms to third-party and cloud-based solutions, according to Avant Communications, the Chicago-based technology and infrastructure consulting firm that performed the study.

Avant released its "State of Disruption" report on April 9, including a survey of 300 U.S. enterprise technology leaders at the manager level and above who lead technology purchasing decisions. "We see the pace of change in IT accelerating with enterprises literally struggling to evolve or die," Drew Lydecker, president and co-founder of Avant, said in a release. "From networking infrastructure to cybersecurity to breakthrough technologies likes SD-WAN, we are seeing disruption across the board as organizations in all industries are advancing digital transformation."

That disruption is causing growing pains even as companies double down on their commitment to digital transformation, Avant found. The report examined "why technology leaders are not confident in their companies' ability to fulfill digital transformation initiatives" and found that the top three reasons are: lack of internal IT resources (32 percent), lack of internal IT expertise (24 percent), and lack of sufficient transformation-specific budget (also 24 percent).

For more details on those pains, the study calculated a Rate of Disruption Index (RDI), which represents the amount of transformation from legacy to modern digital technologies that organizations expect to see from the end of 2018 to the end of 2019. By comparing the rates at which disruptive technologies are replacing legacy solutions, the study found that certain transitions can be particularly stressful on particular sectors of the industry. For example:

  • the migration of company data centers from in-house servers to third-party colocation facilities is most disruptive in companies with $100 million to $1 billion in revenue, with those organizations reporting an RDI of 26 percent. (Companies of both greater and lesser size had far less disruption with this metric, all ranked at 7 percent or below.)
  • the move from in-house security resources to third-party managed security services is most disruptive in the e-commerce segment, with a 12 percent RDI. (This compares to 8 percent for financial services, 7 percent for healthcare/medical, 3 percent for consulting/business services, and 0 percent for manufacturing.)
  • the shift from physical servers to cloud-based IT infrastructure is expected to increase more amongst e-commerce companies than any other industry, with a 14 percent RDI. (Disruption in other industries included 8 percent for both financial service and healthcare/medical, 7 percent for consulting/business services, and 4 percent for manufacturing.)

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