the impact of it transformation on enterprise computing...current state of enterprise computing it...

The Impact of IT Transformation on Enterprise Computing

Sponsored by Logicalis Corporation & HP

Independently conducted by Ponemon Institute LLC

Publication Date: February 4, 2014

Sponsored by Logicalis Corporation & HP Ponemon Institute ©: Private & Confidential Report

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The Impact of IT Transformation on Enterprise Computing February 4, 2014

Part 1. Introduction We are pleased to present the findings of The Impact of IT Transformation on Enterprise Computing sponsored by the Logicalis Corporation and HP. The objective of this research is to better understand how the different stages of IT transformation can affect an organization, the challenges to advancing through each stage and how successful progression can improve an organization’s IT effectiveness. IT transformation is generally referred to as a complete overhaul of a company’s IT systems in order to become more analytical, proactive and responsive to changing business requirements. According to the findings of this research, IT transformation is a priority for companies in this study as well as the need to migrate to cloud or virtualized environments. A key takeaway from this research is how IT transformation at various stages can influence the effectiveness and efficiency of enterprise computing. We believe organizations engaged in the IT transformation journey will find the experiences represented in this research helpful in making the case for investing resources to progress through the IT transformation stages. We surveyed 605 bona fide IT practitioners in the United States. To ensure a knowledgeable respondent, only individuals involved in setting IT priorities, managing IT budgets, selecting vendors and contractors, determining IT strategy and evaluating program performance were permitted to complete the survey. The most salient findings are presented below. ▪ Achievement of IT transformation requires management’s vision of what is needed to make

their IT function more effective. A lack of vision is the biggest hurdle to IT transformation. ▪ As part of IT transformation, IT functions need to become more analytical and spend more

time on business-focused solutions. ▪ Companies in later stages of IT transformation achieve such benefits as the ability to respond

and support business changes with the necessary in-house expertise. ▪ The cost of IT system inefficiencies and failures decreases for companies in later stages of IT

transformation. ▪ Minimizing the risks associated with shadow IT is a challenge for all organizations in every

stage of IT transformation. ▪ A company’s confidence to overcome threats to IT system availability and performance

increases dramatically in later stages of IT transformation. ▪ CEOs and COOs play a bigger role in setting IT priorities in companies that have progressed

to later stages of IT transformation. The boards of directors also become more attentive to IT regulatory compliance.

▪ No matter what stage the company is in, trusted vendors and other third parties are critical to

achieving IT transformation.


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Part 2. Key Findings Key findings are presented below. We have organized the report according to the following topics: Stages of IT transformation Current state of enterprise computing How IT transformation improves enterprise computing Perceptions about IT transformation

Stages of IT transformation Key to the study is determining the stage in the IT transformation progression that best characterizes the organizations represented in this research. Pie Chart 1 reveals 24 percent of respondents say their organizations are in stage 3 or Converged Infrastructure, which means the IT function has moved from components to a unified reference architecture. This is followed by the following stages: Virtualization of Servers and Networks (18 percent of respondents) and Protection Services such as disaster recovery and security safeguards (18 percent of respondents). Pie Chart 1. Stages of transformation

The survey contained the following definitions of each of the six stages of IT transformation. Component-based Architecture (Stage 1) At this stage, organizations focus on point-based product acquisition. Organizations are challenged by having to work with time-consuming manual processes, over-or-under-utilized equipment and lack of flexibility to keep up with an organization’s changing needs. Thirteen percent of respondents say their organization is at stage 1. Virtualization (Stage 2) Organizations now move from strictly physical components to virtualized servers and networks. The challenge is management and capacity planning for increased agility and cost savings. As the number of virtualized systems grows, so does the opportunity for VM

13%

18%

24%

18%

15%

12%

Stage 1 Stage 2

Stage 3 Stage 4

Stage 5 Stage 6


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sprawl. The goal is to gain comprehensive visibility across their infrastructure, proactively manage service levels to avoid incidents and automate routine tasks such as provisioning. Eighteen percent of respondents say their organization is at stage 2.

Converged Infrastructure (Stage 3) A virtualized, managed component-based architecture moves to a unified reference architecture. For organizations seeking the benefits of cloud computing, this is a crucial juncture. Without the management and productivity advantages of a converged infrastructure, managing and operating an effective cloud-computing environment is costly, frustrating and ineffective. A converged infrastructure platform allows the organization to lower management costs and speed implementation and deployment of new services. Twenty-four percent of respondents say their organization is at stage 3.

Protection services (Stage 4) Disaster recovery, protection services and security safeguards are in place to make sure critical data is highly available and protected against any unplanned outages or disasters. Eighteen percent of respondents say their organization is at stage 4.

Automation and orchestration (Stage 5) The infrastructure is configured to apply IT Service Management (ITSM) to the virtualized data center. Once cloud computing concepts, (such as self service and consumption-based metering and chargeback) are applied to this type of automated environment, service management best practices can be applied. ITSM requirements include incident, problem and change management; dynamically updating a configuration management database (CMDB) and aligning technology with business priorities and policies. Organizations have achieved automation of important processes and creation of templates for routine procedures. Fifteen percent of respondents say their organization is at stage 5.

Cloud (Stage 6) Data center is fully virtualized, converged, automated and orchestrated so that the benefits of cloud computing are fully realized. Up-front and unpredictable capital expenditures are largely replaced with predictable monthly service costs, allowing you to more accurately plan spending. Twelve percent say their organization is at stage 6.


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Current state of enterprise computing IT transformation is a priority. As shown in Figure 1, only 12 percent of respondents say IT transformation is not a priority. While companies want to achieve IT transformation, the biggest barrier is a lack of vision on how to make their IT function more effective (55 percent of respondents). Fifty-one percent say budget is an issue followed by a lack of trusted vendors to support IT transformation. Figure 1. Challenges to IT transformation Three responses permitted

1%

9%

12%

16%

20%

30%

31%

35%

40%

51%

55%

0% 10% 20% 30% 40% 50% 60%

Other

Management does not see the need to migrate tocloud or virtualized environments

IT transformation is not a priority issue

Lack of clear accountability and leadership

Lack of collaboration with other functions

Insufficient personnel

IT and business units are not in alignment

Lack of in-house expertise

Lack of trusted vendors to support ITtransformation

Insufficient budget

Lack of vision on how to make the IT functionmore effective


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More IT analysis is required for transformation. Sixty percent of respondents say too much time tracking and compiling IT expenses and not enough time on IT analysis affects IT transformation. The majority of respondents also say they are constantly engaged in fighting fires and spending too much time on technical solutions and not enough time on business-focused solutions for customers. (Figure 2). Figure 2. Barriers to IT transformation Strongly agree and agree response combined

Blade-based services characterize the present IT architecture. According to 42 percent of respondents, their company mostly has blade-based servers followed by 35 percent of respondents who say mostly rack mount servers dominate, as shown in Figure 4. Figure 3. The server environment in the present IT architecture

27%

31%

23%

27%

25%

37%

0% 10% 20% 30% 40% 50% 60% 70%

Too much time spent on technical solutions andnot enough on business-focused solutions

IT function is constantly engaged in fighting fires

Too much time tracking and compiling ITexpenses and not enough on IT analysis

Strongly agree Agree

2%

21%

35%

42%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Cannot determine

A combination of both rack mount and blade-based services

Mostly rack mount servers

Mostly blade-based servers


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How IT transformation improves enterprise computing Based on the findings, respondents that self-report their organizations are at stages 5 and 6 seem to have a more efficient and effective IT function. In addition to respondents’ perception that IT transformation is a priority, the following are characteristics of organizations that have achieved stages 5 and 6: A clearer vision of how to make the IT function more effective A sufficient budget More likely to have trusted vendors to support IT transformation More likely to have in-house expertise and sufficient personnel There are also significant differences between organizations in stages 1 to 3 and later stages (4 to 6) in the following areas: Agility. In this research we define agile as the ability to rapidly adapt to changes in the organization. Agility is very low in stages 1 to 3 (only about 3 on a scale of 1 to 10). In contrast, organizations in stage six on average rate agility as 7. As discussed above, stage 6 is when the organization’s IT function is fully virtualized, converged, automated and orchestrated so that the benefits of cloud computing are fully realized. Figure 4. How agile is your organization? Scale of 1 (rigid) to 10 (agile)

3.01 2.65

3.09

4.23 4.2

7.01

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6


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Later stage organizations are proactive in forecasting requirements and responding to risks. As with agility, there is a significant difference in how respondents rate their organizations in stage 1 and in stages 5 and 6 (Figure 5). As defined above, stage 5 is characterized by automation of important processes and templates for routine procedures that can help and organization move from being reactive to proactive in addressing risks. In contrast, stage 1 organizations are characterized by having to work with time-consuming manual processes, over-or-under-utilized equipment and lack of flexibility to keep up with an organization’s changing needs. Figure 5. Is your organization proactive in forecasting requirements and responding to risks? Scale of 1 (reactive) to 10 (proactive)

3.55 3.41

4.65 5.09

6.88

8.12

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00



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Later stage companies are able to overcome threats to IT system availability and performance. Figure 6 reveals that in stage 4, organizations are beginning to rate their IT functions as becoming more successful in dealing with those issues that can reduce performance and system availability. Stage 4 is characterized by the deployment of disaster recovery, protection services and security safeguards to make sure critical data is highly available and protected against any unplanned outages or disasters. Figure 6. Can the company overcome threats to IT system availability and performance? Scale of 1 (not effective) to 10 (very effective)

The research also shows that IT system inefficiencies and failures have cost stage 2 companies an average of $45 million as opposed to costing stage 6 companies $21 million, as shown in Figure 7. Figure 7. The estimated cost of IT system inefficiencies and failures over the past year $000,000 omitted

3.62 4.12

5.45

6.07

8.56 8.39

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00



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$31.7

$44.6 $41.7

$34.2

$25.0

$21.1

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

$45.0

$50.0



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Dealing with shadow IT is a challenge for organizations at all stages. While stages 4 through six are shown to have greater agility, a proactive vs. reactive ability to address risks and the ability to reduce IT system downtime, when it comes to overcoming challenges caused by shadow IT there is not as big a difference among the various stages (Figure 8). Figure 8. Can the company overcome challenges caused by shadow IT? Scale of 1 (not effective) to 10 (very effective

At later stages of transformation, senior management is more likely to set IT priorities. At the early stage, the CIO is most likely the person to establish priorities, as shown in Figure 9. However, as the company progresses through the various stages of transformation the CIO’s role decreases and senior leadership’s role in setting priorities increases. Specifically, in stage 5, the participation of senior leadership in setting priorities doubles from stages 3 and 4 to 23 percent of respondents. The later stages are also more likely to have the IT transformation strategy fully or mostly aligned with key business objectives or mission. Figure 9. Who determines IT priorities?

3.21 3.19 3.25

3.68

6.23

5.16

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00


50%

45% 45% 41%

30%

25%

31% 27% 28%

30% 32% 32%

5%

10% 11% 10%

23%

28%

0%

10%

20%

30%

40%

50%

60%


Chief information officer No one function determines priorities

Senior leadership (CEO or COO)


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More financial resources are available for later stage companies to meet today’s business requirements. There is a vast difference between what early stage companies and later stage companies have to meet business requirements and to transform the IT function to higher stages. According to Figure 10, the highest IT expenditures in the present year occur on average in stage 5 companies. These companies spent about $70 million this year. In stage 5, the focus is on applying ITSM to the virtualized data center. In stage 1 the average is approximately $51 million. This is based on the investment in IT infrastructure to achieve automation of routine processes. Figure 10. IT expenditures in the present year $000,000 omitted

$50.8

$55.4 $51.5

$55.0

$69.7 $67.4

$0

$10

$20

$30

$40

$50

$60

$70

$80



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Figure 11 reveals that organizations in stage 5 also have the highest percentage of budget dedicated to IT transformation activities and investments in cloud infrastructure and services, an average of 33 percent and 48 percent respectively. In contrast stage 1 organizations spend only 8 percent on average for IT transformation and the cloud. Figure 11. Percentage of spending dedicated to IT transformation activities

Respondents in stage 3 and 4 organizations are more likely to predict a substantial increase (20 percent or more) in their IT spending over the next 12 months, as shown in Figure 12. More respondents in stages 1, 5 and 6 are more likely to predict that there will be no change in spending. Unlike stage 1, however, companies in stages 5 and 6 are realizing the benefits of IT transformation. The companies most likely to see substantial increase are those in stages 3 and 4. Figure 12. Will IT spending increase over the next 12 months?

8%

11%

16%

21%

33%

26%

0%

5%

10%

15%

20%

25%

30%

35%


10%

14%

25% 23%

14% 13% 12%

21%

30%

25%

21% 23%

55%

48%

28%

37%

52% 55%

0%

10%

20%

30%

40%

50%

60%


Substantial increase (> 20% ) Increase (1 to 20%) No change


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Trusted vendors are needed at every stage. Figure 13 indicates no matter what stage, companies believe vendors and other trusted third parties are essential or very important to achieving IT transformation. This is also true for the ability to demonstrate cost reduction and ROI to achieving IT transformation. Figure 13. Are vendors and other trusted third parties critical to IT transformation?

Early stage organizations are more likely to have their IT operations on premise and less likely to have virtualization. According to Figure 14, 73 percent of respondents in stage 1 and 78 percent of respondents in stage 2, say their IT operations are on premise. In contrast, 45 percent of stage 5 respondents and 40 percent of respondents in stage 6 say this is the case. Figure 14. Percentage of IT operations on-premise

32%

29% 31%

37%

33%

30%

35%

30%

27%

33% 31%

36%

18%

26% 28%

15%

20% 20%

0%

5%

10%

15%

20%

25%

30%

35%

40%


Essential Very important Important

73% 78%

65%

58%

45% 40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%



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Virtualization of servers mostly occurs in stage 5 and 6 organizations, as shown in Figure 15. On average, 65 percent of servers are virtualized in stage 5 organizations and an average of 53 percent of servers are virtualized in stage 6. Figure 15. Percentage of servers that are virtualized

Figure 16 reveals on average 35 percent of the IT environment is x86 compatible and this increases to an average of 52 percent in stage 5 and an average of 50 percent in stage 6. Figure 16. Percentage of IT environment that is x86 compatible

23% 21%

35%

48%

65%

53%

0%

10%

20%

30%

40%

50%

60%

70%


35%

29%

48% 49% 52%

50%

0%

10%

20%

30%

40%

50%

60%



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Perceptions about the IT function The research reveals striking differences in how the stages of IT transformation affect perceptions about the IT function. In this section of the report, we discuss the key findings about companies in stages 4, 5 and 6. The following are characteristics about companies in these stages. ▪ The boards of directors are more concerned about regulatory compliance ▪ IT is less likely to deal with fighting fires ▪ IT is more likely to spend time on IT analysis ▪ The focus is on business, not technical, solutions for customers ▪ Companies are better able to integrate IT operations and infrastructure in acquisitions ▪ There is a positive view of the capabilities of information technology service management The board of directors is more attentive to IT regulatory compliance. As soon as organizations achieve stage 4, more respondents say their company’s board demands compliance with all policies and regulations affecting IT operations (Figure 17). Figure 17. The board of directors demands compliance IT policies and regulations Strongly agree and agree response combined

37%

30%

44%

54%

50% 51%

0%

10%

20%

30%

40%

50%

60%



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IT transformation improves the daily functioning of IT. In the later stages, the IT function is less likely to constantly deal with fighting fires finding more time for analysis and planning. In stages 5 and 6, a higher percentage of respondents see their IT function as being more proactive, as shown in Figure 18. Figure 18. IT is less likely to engage in fighting fires in later stages Strongly agree and agree response combined

IT transformation improves understanding of the IT function. According to Figure 19, 75 percent of respondents in stage 1 companies say their company spends too much time tracking and compiling IT expenses rather than on analysis. This percentage drops dramatically among respondents in stages 5 and 6 to 43 percent and 32 percent respectively. Figure 19. IT does not spend enough time on analysis Strongly agree and agree response combined

68% 68%

60% 59%

35% 34%

0%

10%

20%

30%

40%

50%

60%

70%

80%


75% 71%

66% 62%

43%

32%

0%

10%

20%

30%

40%

50%

60%

70%

80%



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Focused on business—not technical--solutions for customers. As shown in Figure 20, 68 percent of respondents in stage 1 say their organizations are spending too much time on technical solutions as opposed to business-focused customer solutions. As mentioned above, stage 5 and 6 organizations have more alignment with the company’s mission and objectives. Sixty percent of respondents in stage 6 say their organizations take the time to create solutions that are business rather than technical. Figure 20. Insufficient time spent on business solutions for customers Strongly agree and agree response combined

In acquisitions, the company is able to easily integrate the IT operations and infrastructure. According to Figure 21, in stages 1 and 2, respondents are not likely to agree that this is possible (17 percent and 16 percent, respectively). However, in stage 6 40 percent of respondents believe they can accomplish such integration. Figure 21. Companies easily integrate IT operations and infrastructure in acquisitions Strongly agree and agree response combined

68%

56% 60%

52%

45% 40%

0%

10%

20%

30%

40%

50%

60%

70%

80%


17% 16%

26%

33% 31%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%



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Capabilities of the information technology service management (ITSM) are viewed positively. Only 29 percent of respondents in stage 5 and 23 percent of respondents in stage 6 see their company’s ITSM as having limited capabilities, features and services, as shown in Figure 23. This percentage grows to 56 percent and 54 percent in stages 1 and 2. Figure 23. ITSM provider has limited capabilities, features and services Strongly agree and agree response combined

56% 54%

43%

36%

29%

23%

0%

10%

20%

30%

40%

50%

60%



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Part 3. Methods A random sampling frame of 24,330 IT practitioners involved in setting IT priorities, managing IT budgets, selecting vendors and contractors, determining IT strategy and evaluating program performance were selected to complete the survey. All participants were located in the United States. As shown in Table 1, 722 respondents completed the survey. Screening and failed reliability checks removed 117 surveys. The final sample was 605 surveys (or a 2.5 percent response rate).

Table 1. Sample response Freq. Pct%

Total sampling frame 24,330 100.0%

Total returns 722 3.0%

Rejected and screened surveys 117 0.5%

Final sample 605 2.5%

Table 2 reports the total years of relevant experience. Respondents reported an average of almost 10 years of relevant IT experience and almost six years in their current position.

Table 2. Relevant experience Mean

Total years of relevant IT experience 9.72

Total years in current position 5.69

Pie Chart 2 reports the respondent’s organizational level within participating organizations. By design, 57 percent of respondents are at or above the supervisory levels. Pie Chart 2. What organizational level best describes your current position?

2% 1%

15%

23%

16%

33%

8% 2%

Senior Executive

Vice President

Director

Manager

Supervisor

Technician

Staff

Contractor/Consultant


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As shown in Pie Chart 3, 56 percent of respondents indicated that they or their immediate supervisor reports directly to the Chief Information Officer. This is followed by 11 percent that report directly to the Chief Technology Officer. Pie Chart 3. Primary Person you or your immediate supervisor reports to within the organization

Pie Chart 3 reports the industry focus of respondents’ organizations. This chart identifies financial services (19 percent) as the largest segment, followed by public sector (14 percent) and health, pharma & bio-tech (11 percent). Pie Chart 4. Industry distribution of respondents’ organizations

56%

11%

10%

7%

4%

4% 2%

2% 2% 1% 1%

Chief information officer

Chief technology officer

Data center management

Chief IT architect

IT risk management

Network engineering

Chief financial officer

IT compliance

Help desk and support

CEO/executive committee

IT administration

19%

14%

11%

9% 7%

6%

6%

6%

5%

4%

3%

3% 2% 2% 3%

Financial services

Public sector

Health, pharma & bio-tech

Retail

Industrial

Consumer products

Hospitality

Services

Technology & software

Transportation

Communications

Energy & utilities

Defense & aerospace

Education & research

Other


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As shown in Pie Chart 4, 70 percent of respondents reported their total annual revenue in the present year to be greater than $500 million. Pie Chart 5. Total annual revenue

Pie Chart 6 reports that 77 percent of respondents are from organizations with a global headcount greater than 1,000. Pie Chart 6. Worldwide headcount

8%

22%

23%

19%

19%

9%

$20 to $100 million

$101 to $500 million

$501 million to $1 billion

$1 to $5 billion

$5 to $10 billion

> $10 billion

23%

30%

31%

10%

6%

500 to 1,000

1,001 to 5,000

5,001 to 25,000

25,001 to 75,000

> 75,000


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Part 4. Caveats

There are inherent limitations to survey research that need to be carefully considered before drawing inferences from findings. The following items are specific limitations that are germane to most web-based surveys.

Non-response bias: The current findings are based on a sample of survey returns. We sent surveys to a representative sample of individuals, resulting in a large number of usable returned responses. Despite non-response tests, it is always possible that individuals who did not participate are substantially different in terms of underlying beliefs from those who completed the instrument. Sampling-frame bias: The accuracy is based on contact information and the degree to which the list is representative of individuals who are IT practitioners. We also acknowledge that the results may be biased by external events such as media coverage. We also acknowledge bias caused by compensating subjects to complete this research within a holdout period. Self-reported results: The quality of survey research is based on the integrity of confidential responses received from subjects. While certain checks and balances can be incorporated into the survey process, there is always the possibility that a subject did not provide a truthful response.


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Appendix: Detailed Survey Results The following tables provide the frequency or percentage frequency of responses to all survey questions contained in this study. All survey responses were captured in October 2013. Survey response Freq Pct%

Total sampling frame 24,330 100.0%

Total returns 722 3.0%

Rejected & screened surveys 117 0.5%

Final sample 605 2.5%

Screening Questions

S1. What best describes your role in managing the IT function within your organization? Check all that apply. Pct%

Setting IT priorities 59%

Managing IT budgets 45%

Selecting vendors and contractors 50%

Determining IT strategy 29%

Evaluating program performance 43%

None of the above [STOP] 0%

Total 226%

S2. How do you rate your level of involvement in the acquisition, procurement and/or implementation of IT products or services in your organization? Pct%

Very high level of involvement 25%

High level of involvement 41%

Moderate level of involvement 34%

Low level or no involvement [STOP] 0%

Total 100%

Part 1. Stages of IT Transformation

This survey examines your company’s stage of IT transformation from traditional on-premises to a fully functional cloud ecosystem. The following vignettes describe a typical business firm at six different stages or levels of progression. Please rate the vignette using the scaled questions provided below each scenario. Responses should be based on how closely the scenarios resemble your organization.

Q1. Component-based Architecture (Stage One): Focused on point-based product acquisition. At this level organizations are challenged by having to work with time-consuming manual processes, over-or-under-utilized equipment and lack of flexibility to keep up with an organization’s changing needs.

Q1a. How well does this scenario describe your company today? Pct%

1 and 2 (not accurate) 40%

3 and 4 25%

5 and 6 18%

7 and 8 11%

9 and 10 (very accurate) 6%

Total 100%


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Q1b. Looking ahead, how well will this scenario describe your company 24 months from today? Pct%


3 and 4 26%

5 and 6 16%

7 and 8 14%


Total 100%

Q2. Virtualization (Stage 2): Moving from strictly physical components to virtualized servers and networks. The challenge is management and capacity planning for increased agility and cost savings. As the number of virtualized systems grows, so does the opportunity for VM sprawl. The goal is to gain comprehensive visibility across their infrastructure, proactively manage service levels to avoid incidents and automate routine tasks such as provisioning.



3 and 4 20%

5 and 6 21%

7 and 8 20%


Total 100%



3 and 4 18%

5 and 6 23%

7 and 8 19%


Total 100%

Q3. Converged Infrastructure (Stage 3): A virtualized, managed component-based architecture moves to unified reference architecture. For organizations seeking the benefits of cloud computing, this is a crucial juncture. Without the management and productivity advantages of a converged infrastructure, managing and operating an effective cloud computing environment is costly, frustrating and ineffective. A converged infrastructure platform allows the organization to lower management costs and speed implementation and deployment of new services.



3 and 4 13%

5 and 6 15%

7 and 8 20%


Total 100%


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3 and 4 7%

5 and 6 11%

7 and 8 25%


Total 100%

Q4. Protection services (Stage 4): Disaster recovery, protection services and security safeguards are in place to make sure critical data is highly available and protected against any unplanned outages or disasters.



3 and 4 26%

5 and 6 16%

7 and 8 12%


Total 100%



3 and 4 18%

5 and 6 16%

7 and 8 15%


Total 100%

Q5. Automation and orchestration (Stage 5): The infrastructure is configured to apply IT Service Management (ITSM) to the virtualized data center. Once cloud computing concepts, (such as self service and consumption-based metering and chargeback) are applied to this type of automated environment, best practices can be applied. ITSM requirements include incident, problem and change management; dynamically updating a configuration management database (CMDB) and aligning technology with business priorities and policies. Organizations have achieved automation of important processes and creation of templates for routine procedures.



3 and 4 24%

5 and 6 19%

7 and 8 16%


Total 100%



3 and 4 18%

5 and 6 23%

7 and 8 22%


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Total 100%

Q6. Cloud (Stage 6): Data center is fully virtualized, converged, automated and orchestrated so that the benefits of cloud computing are fully realized. Up-front and unpredictable capital expenditures are largely replaced with predictable monthly service costs, allowing you to more accurately plan spending.



3 and 4 23%

5 and 6 13%

7 and 8 7%


Total 100%



3 and 4 21%

5 and 6 16%

7 and 8 8%


Total 100%

Part 2. Challenges to IT Transformation

Q7. What challenges keep your organization from moving ahead or progressing to higher stages of IT transformation? Please only select the top three. Pct%

Lack of vision on how to make the IT function more effective 55%

Insufficient budget (money) 51%

Lack of trusted vendors to support IT transformation 40%

Lack of in-house expertise 35%

IT and business units are not in alignment 31%

Insufficient personnel 30%

Lack of collaboration with other functions 20%

Lack of clear accountability and leadership 16%

IT transformation is not a priority issue 12%

Management does not see the need to migrate to cloud or virtualized environments 9%

Other 1%

Total 300%

Q8. Using the following scale, please rate the level of agility of your organization’s present IT function. We define agile as the capability to rapidly adapt in response to changes in the organization. Pct%

1 and 2 (rigid) 38%

3 and 4 32%

5 and 6 16%

7 and 8 9%

9 and 10 (agile) 5%

Total 100%

Q9. Using the following scale, please rate the degree to which your organization’s IT function is proactive in forecasting requirements and responding to risks. Pct%

1 and 2 (reactive) 20%

3 and 4 29%


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5 and 6 18%

7 and 8 18%

9 and 10 (proactive) 15%

Total 100%

Q10. How would you describe your organization’s overall ability to overcome threats to IT system availability and performance? Pct%

1 and 2 (Not effective) 12%

3 and 4 15%

5 and 6 31%

7 and 8 25%

9 and 10 (Very effective) 17%

Total 100%

Q11. How would you describe your organization’s overall ability to overcome challenges caused by shadow IT? Pct%

1 and 2 (Not effective) 31%

3 and 4 40%

5 and 6 12%

7 and 8 11%

9 and 10 (Very effective) 6%

Total 100%

Q12. Who determines IT priorities for your organization? Please choose only one function. Pct%

Chief information officer (CIO) 40%

No one function determines priorities 31%

Senior leadership (CEO or COO) 11%

Chief technology officer (CTO) 9%

Data center management 6%

Other 3%

Total 100%

Q13. In your opinion, is your organization’s IT transformation strategy aligned with key business objectives or mission? Pct%

Fully aligned 11%

Mostly aligned 13%

Partially aligned 24%

Not aligned 40%

IT transformation strategy does not exist 12%

Total 100%

Q14a. Is your organization’s budget adequate for meeting today’s business requirements? Pct%

Yes 46%

No 50%

Unsure 4%

Total 100%

Q14b. Is your organization’s budget adequate for transforming the IT function to higher stages (as defined above)? Pct%

Yes 31%

No 63%

Unsure 6%

Total 100%


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Q15. How important are vendors and other trusted third parties to achieving IT transformation in your company? Pct%

Essential 33%

Very important 31%

Important 21%

Not important 8%

Irrelevant 7%

Total 100%

Q16. How important is cost reduction and ROI to achieving IT transformation in your company? Pct%

Essential 20%

Very important 35%

Important 32%

Not important 7%

Irrelevant 6%

Total 100%

Part 3. Mapping Your Position

Q17. Which server environment most closely resembles your company’s present IT architecture? Pct%

Mostly rack mount servers 35%

Mostly blade-based servers 42%

A combination of both rack mount and blade-based services 21%

Cannot determine 2%

Total 100%

Q18. What percentage of your IT environment is x86 compatible? Pct%

Less than 10% 20%

10 to 25% 11%

26 to 50% 32%

51 to 75% 13%

76 to 100% 21%

Cannot determine 3%

Total 100%

Q19. What percentage of your IT operations is on-premise? Pct%

Less than 10% 7%

10 to 25% 10%

26 to 50% 14%

51 to 75% 22%

76 to 100% 42%

Cannot determine 5%

Total 100%

Q20. What percentage of your servers are virtualized? Pct%

Less than 10% 18%

10 to 25% 31%

26 to 50% 11%

51 to 75% 12%

76 to 100% 22%


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Cannot determine 6%

Total 100%

Q21. What best describes your company’s disaster recovery and business continuity plan? Pct%

We don’t have a plan 12%

We have an informal or “ad hoc” plan 21%

We have a formal plan, but it does not cover the entire enterprise 35%

We have a formal plan that covers the entire enterprise 30%

Cannot determine 2%

Total 100%

Q22. Does your company own its disaster recovery site? Pct%

Yes, we own it 49%

No, we are contracting to a vendor 33%

No, we don’t have a disaster recovery site 16%

Cannot determine 2%

Total 100%

Q23. Which of the following is your company using for disaster recovery? Please choice only one top choice. Pct%

Traditional cold site 38%

DIY 13%

DRaaS 20%

Cloud-to-cloud 29%

Other 0%

Total 100%

Part 4. Budget for IT Transformation

Q24a. What best describes your company’s IT expenditures in the present year? Please include all expenses and investments including spending on technologies, personnel and overhead. Your best guess is welcome. Pct%

Less than $1,000,000 0%

$1,000,000 to $5,000,000 8%

$5,000,001 to $10,000,000 10%

$10,000,001 to $25.000,000 16%

$25,000,001 to $50,000,000 20%

$50,00,001 to $100,000,000 21%

$100,000,001 to $500,000,000 16%

More than $500,000,000 4%

Cannot determine 5%

Total 100%


Page 33

Q24b. What percentage of the above spending is dedicated to IT transformation activities? Your best guess is welcome. Pct%

None 0%

1 to 5% 31%

6 to 10% 23%

11 to 15% 6%

16 to 20% 1%

21 to 25% 2%

26 to 30% 2%

31 to 35% 1%

36 to 40% 3%

41 to 45% 5%

46 to 50% 5%

More than 50% 13%

Cannot determine 8%

Total 100%

Q24c. What percentage of the above is dedicated to investments in cloud infrastructure and services? Your best guess is welcome. Pct%

Less than 1% 0%

1 to 5% 4%

6 to 10% 15%

11 to 15% 13%

16 to 20% 11%

21 to 25% 5%

26 to 30% 5%

31 to 35% 2%

36 to 40% 1%

41 to 45% 5%

46 to 50% 11%

More than 50% 21%

Cannot determine 7%

Total 100%

Q25. How much did IT system inefficiencies and failures cost your company over the past year? Inefficiencies might include productivity losses, business disruptions and other negative consequences. Pct%

Zero 0%

Less than $500,000 3%

$500,000 to $1,000,000 9%

$1,000,001 to $5,000,000 18%

$5,000,001 to $10.000,000 23%

$10,000,001 to $25,000,000 21%

$25,00,001 to $50,000,000 9%

$50,00,001 to $100,000,000 3%

$100,00,001 to $500,000,000 1%

More than $500,000,000 3%

Cannot determine 10%

Total 100%


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Q26. What one statement best describes your prediction of IT spending over the next 12 months? Pct%

Substantial increase in spending (20% or more) 13%

Increase in spending (1 to 20%) 27%

No change 44%

Decrease in spending (1 to 20%) 9%

Substantial decrease in spending (20% or more) 3%

Cannot determine 4%

Total 100%

Part 5. Attributions: Please rate each statement using the five-point scale provided

below the item.

Q26. My company’s board of directors demands that we are in compliance with all policies and regulations affecting IT operations. Pct%

Strongly agree 21%

Agree 23%

Unsure 30%

Disagree 17%

Strongly disagree 9%

Total 100%

Q27. My company’s information technology service management (ITSM) provider has limited capabilities, features and services. Pct%

Strongly agree 15%

Agree 26%

Unsure 44%

Disagree 11%


Total 100%

Q28. My company’s IT function is constantly engaged in fighting fires. Pct%

Strongly agree 31%

Agree 25%

Unsure 14%

Disagree 15%


Total 100%

Q29. My company’s IT help desk runs like a well-oiled machine. Pct%

Strongly agree 17%

Agree 23%

Unsure 26%

Disagree 26%


Total 100%

Q30. My company’s IT function receives rave reviews from end users. Pct%

Strongly agree 11%

Agree 20%

Unsure 19%


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Disagree 32%


Total 100%

Q31. My company is able to easily integrate the IT operations and infrastructure of acquired companies. Pct%

Strongly agree 11%

Agree 16%

Unsure 25%

Disagree 33%


Total 100%

Q32. Automation of my company’s runbook would improve response time and resolution accuracy while improving productivity and reducing costs. Pct%

Strongly agree 14%

Agree 17%

Unsure 34%

Disagree 27%


Total 100%

Q33. My company spends too much time tracking and compiling IT expenses and not enough time on IT analysis. Pct%

Strongly agree 23%

Agree 37%

Unsure 15%

Disagree 21%


Total 100%

Q34. My company focuses too much on technical solutions and not enough time on business-focused solutions for our customers. Pct%

Strongly agree 27%

Agree 27%

Unsure 19%

Disagree 18%


Total 100%

Part 6. Your role and organization

D1. What organizational level best describes your current position? Pct%

Senior Executive 2%

Vice President 1%

Director 15%

Manager 23%

Supervisor 16%

Technician 33%

Staff 8%

Contractor/Consultant 2%

Other 0%

Total 100%


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D2. Check the Primary Person you or your immediate supervisor reports to within the

organization. Pct%

CEO/executive committee 1%

Chief information officer 56%

Chief technology officer 11%

Chief IT architect 7%

Chief financial officer 2%

Data center management 10%

IT compliance 2%

IT risk management 4%

IT procurement 0%

IT administration 1%

Network engineering 4%

Help desk and support 2%

Other 0%

Total 100%

D3. Total years of relevant experience Mean Median

Total years of relevant IT experience 9.72 10.0

Total years in current position 5.69 6.0

D4. What industry best describes your organization’s industry focus? Pct%

Agriculture & food services 1%

Communications 3%

Consumer products 6%

Defense & aerospace 2%

Education & research 2%

Energy & utilities 3%

Entertainment & media 1%

Financial services 19%

Health, pharma & bio-tech 11%

Hospitality 6%

Industrial 7%

Public sector 14%

Retail 9%

Services 6%

Technology & software 5%

Transportation 4%

Other 1%

Total 100%

D5. What best describes your organization’s total annual revenue (in the present year)? Pct%

$20 to $100 million 8%

$101 to $500 million 22%

$501 million to $1 billion 23%

$1 to $5 billion 19%

$5 to $10 billion 19%

More than $10 billion 9%

Total 100%


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D6. What is the worldwide headcount of your organization? Pct%

500 to 1,000 23%

1,001 to 5,000 30%

5,001 to 25,000 31%

25,001 to 75,000 10%

More than 75,000 6%

Total 100% 15,523

Ponemon Institute

Advancing Responsible Information Management Ponemon Institute is dedicated to independent research and education that advances responsible information and privacy management practices within business and government. Our mission is to conduct high quality, empirical studies on critical issues affecting the management and security of sensitive information about people and organizations.

As a member of the Council of American Survey Research Organizations (CASRO), we uphold strict

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