Legacy IT systems holding back digital transformation

Enterprise

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Major companies are looking to embrace digital technologies but are held back by legacy IT systems and rigid infrastructure, according a new research report on disruption, digital transformation and effective technology strategy.

Business leaders surveyed in the research blamed the length of time taken for IT projects and inflexible networking platforms for their slowness in adopting digital technologies, said Tim Dillon, founder and director of Tech Research Asia and who wrote the report. Australian telco Telstra commissioned it.

The study found that business leaders want digital technologies to improve customer experience, streamline operations and move commodity technology infrastructure to a managed environment, he said in a media briefing in Melbourne yesterday.

However, less than 20 per cent state that their IT organisations totally support their business goals. Findings of the research suggest that corporations need to “retune their networking and technology strategies,” said Dillon.

Jim Clarke, Telstra’s director for international marketing, products and pricing, said that “disruption is happening, regardless of what industry you are in”.

The faster companies realise this and take steps to overcome the legacy IT infrastructure, the faster they can roll out their digital strategies, said Clarke, who was also at the media briefing.

Telstra is transforming itself too, he added, by spending about A$3 billion over the next three years to achieve its own digital technology goals.

The lessons it learns will also help its customers. With strong network infrastructure in Asia-Pacific, Telstra also enhanced its customer base with its acquisition of Pacnet in 2014.

It now carries about one-third of all Internet traffic in Asia-Pacific. On top of the network, Telstra has added other services like managed services and hybrid cloud solutions, all of which aid Telstra’s ambition to transform itself from a telecom operator to a leading technology vendor.

The digital transformation research, undertaken in May this year, surveyed over 1,000 major private sector corporations in eight countries including Singapore, India, United States and Britain. The corporations employed between 100 and 200 people each and had regional operations.

In Singapore, about 100 IT decision makers took part in the survey.

Just over half of the survey participants in Singapore currently view the role of IT as primarily managing their organisations’ infrastructure with general maintenance of IT services. However, about a third said that IT supports business goals except that it does not move quickly enough.

The good news is Singapore respondents indicate that they have or are about to develop a digital transformation strategy. Over the next 12 months, their priority technology areas are in data storage and management, hybrid cloud and Big Data and analytics.

At the same time, they will use digital technologies to streamline operations and drive down costs. To free up their IT organisations to concentrate on business growth and innovation, they will also move basic IT infrastructure to a managed services environment.

Overall, Singapore echoes the research findings on the need to have a flexible telco network partly by buying managed services. This will help them improve customer engagement, pursue digital transformation strategies, all of which will help their corporations grow faster and more efficiently.

Grace Chng, a veteran tech writer, attended the Telstra Vantage event held in Melbourne.