A study carried out by IDC for the publisher Apptio and Devoteam Management Consulting shows that digital transformation remains a priority for French

When the IT department finances digital transformation in France

Business

2020-11-02 16:57:51

A study carried out by IDC for the publisher Apptio and Devoteam Management Consulting shows that digital transformation remains a priority for French organizations. In almost one in two large companies it is funded by the IT department.

According to the IDC study for Apptio and Devoteam Management Consulting, the IT department is orchestrating the digital transformation in more than one two companies.

To understand the role of CIOs in the financing of digital transformation, the research firm

IDC

interviewed 50 IT decision-makers from large French companies and administrations (over 5,000 employees), as part of a white paper sponsored by Apptio and Devoteam Management Consulting.

Premier However, the health crisis does not seem to have had any impact on digital transformation. More than 90% of respondents even see it as an accelerator of transformation. Eight entreprises out of ten perceive digital as a lever to better meet customer expectations, more than six in ten consider that digital makes it possible to adapt to new working methods and six out of ten see it as a way to increase productivity . However, to maintain the budgets needed for the transformation, most organizations have had to cut costs elsewhere: more than half of them say they have frozen non-strategic projects, and 31% have renegotiated the scope of some contracts.

Insufficient financial governance

The survey also confirms the important place held by the IT department in digital transformation initiatives. Thus, in 57% of respondents, the ISD is responsible for these programs or is part of the steering body. Often, it is also she who holds all or part of the purse strings: in almost one in two cases, it finances more than half of the funds.clothing necessary for the transformation, or even all in 38% of cases. Finally, more than half of respondents (53%) consider that the IT department carries the bulk of the strategy.

According to the study, the IT department is mostly perceived as a key contributor to the activity of organizations.

Overall , the IT decision-makers questioned consider the results of the digital transformation to be positive (nearly eight out of ten companies), even if the authors note that non-IT decision-makers are more mixed. The first factor of failure mentioned for initiatives that do not ‘not providing the expected results is the lack of alignment with the professions, cited by 26% of respondents. Respondents also point to insufficient governance in one out of two cases, with indicators for monitoring the transformation absent or too much monitoring. light when they exist.

These difficulties arereflected in budget practices. Traditional IT budgets are most often co-constructed, with 74% of CIOs having an internal financial organization that facilitates relations with CFOs and the business lines. However, digital transformation is shaking up this budgeting process. Thus, in nearly two thirds of organizations, budgetary decisions with an impact on IT investments are taken outside the IT department (in particular the business lines in almost one in two cases). As a result, the IT department then finds itself with discrepancies that are difficult to manage, with “Shadow IT” projects that disrupt its roadmap. The challenge is therefore to better integrate the trades in the preparation of IT budgets, an avenue for improvement cited by 54% of respondents.

A heavy technical debt

Finally, the CIOs raise another obstacle which undermines budgetary flexibility: the rationalization of Legacy, at work in nearly nine companies onten, does not offer the expected results in 55% of cases. The complexity of this application heritage thus appears to be a major obstacle to optimizing the operating costs of the IT department, with internal resistance to change and organizations that are still too siled.

The IT department sees its positioning evolve in a positive way, becoming a strategic player in transformation, seen less and less as a cost center. However, efforts still need to be made on controlling IT costs, which remains an essential indicator for evaluating the performance of IT organizations, considered very important by 52% of respondents. For the respondents, this means in particular the modernization and automation of processes, a lever cited by nearly eight out of ten companies. Other promising avenues: the consolidation and closure of data, the generalization of DevOps and agile, API-based architectures or even migration to the Cloud. In order to follow andto steer these initiatives, more than 70% of respondents consider it necessary to equip themselves to have a consolidated view of IT spending.

About the study

Sponsored by Apptio and Devoteam Management Consulting, the white paper entitled “After the Covid-19 crisis – the IT department facing the challenge of financing the digital transformation” s ” is based on a survey carried out by IDC in June 2020 among 50 French companies and administrations with more than 5,000 people. Within these organizations, IDC interviewed CIOs, CDO (Chief Digital Officer), CTO (Chief Technical Officer), financial or performance directors.

The IT budgets of the organizations surveyed are between 60 and 100 M € for 36% of the respondents, between 100 and 250 M € for 27% and above 250 M € for 37% of the panel.