IT transformation: key challenges, trends and market drivers

While IT infrastructure transformation is among the top priorities, businesses face several challenges in implementing the technology and process.

Everest Group identifies top challenges in IT transformation. For most businesses (77 percent) buying technology is easy, but making the solutions work together is the challenge. Lack of talent and resources is another major crisis involved in IT overhaul.

A major trend identified by the research firm, which in fact has resulted from the ongoing challenges, is the need for transformation consulting. More than half (52 percent) of the transformation sourcing engagements now include consulting.

IT transformation trends

Another significant change to IT is the collapsing of IT stack due to the increasing automation and integration of emerging technologies. The news, software-defined and service-oriented IT architecture with agile, outcome-oriented stacks, obviates the functional siloes common to traditional IT.  This has led enterprises to reimagine their IT service model into one where IT functions as a broker of services, the architecture is automation led and cloud native, and service delivery is DevOps oriented.

Based on the above scenarios, Everest Group predicts three major trends for IT transformation in 2018:

  • Cloud service providers will no longer be just infrastructure providers; rather they will emerge as business transformation partners.
  • IT service providers will be expected to help enterprises to compare and consume IT infrastructure services best suited to their workload requirements.
  • Enterprises will continue to explore open systems as they look to minimize their historical vendor lock-in issues

In view of these changes, enterprises and service providers need to focus on the 4 “S” which will drive the IT transformation.  “The Driving FourS” include Structure, Skills, Service Metrics and Sourcing Models.

According to Forrester Research, global IT services market is expected to grow at a modest rate of 1.5 to 2 percent per year through 2020. Key drivers for the market include investments in digital technologies, automation, DevOps, as-a-service models and application modernization.

Cloud and security services will be the fastest growing segments within the global IT services market, with cloud services logging a 24 percent compound annual growth rate (CAGR) and security services seeing a 15 percent CAGR from 2016 to 2020. The traditional datacenter services will experience a 3 percent decline over the same period.

Rajani Baburajan

[email protected]

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