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Pivot to IT Modernization

As the pace of change in technology continues to accelerate, Strategic Sourcing and Vendor Management are in an optimal position at their companies. These groups can see what’s happening and what’s working—and why, such as where emerging technology is a good fit. This helps the enterprise to avoid missteps, be faster and more nimble as it navigates through complex changes.

Blog_Pivot to IT modernization

Digital Disruption

Digital adoption is disrupting many industry segments, creating complexities, shaking things up and forcing enterprises to take a hard look at the timelines to execute against business and technology strategies. 

Enterprises that haven’t made the transition to digital are going to have to make their changes “while the plane is flying in the air.” They are coming to grips with what their businesses look like, what digital disruption means in the marketplace and how they are going to react, says Michael Janssen, Chief Research Guru at Everest Group.

Marketplace Changes Ahead

Increased focus on IT Modernization and enterprises piloting new digital frameworks—automation, Cloud, DevOps applications—is now moving to full-on implementation. Analysts at Everest Group believe that IT modernization will capture the majority of dollars going forward this year. And, according to Gartner, through 2019, every $1 that enterprises invest in innovation will require an additional $7 in core execution. Consistently at Genesis10, we see our clients accelerate their digital business transformation initiatives which in turn drives them to modernize infrastructure and applications.

Everest Group CEO Peter Bendor-Samuel explains that having done sufficient experimentation, building confidence in new models, the industry, with new funding, is prepared to act. As part of the recent federal tax cut and repatriation of funds back to the U.S., political pressure is on companies to use part of those funds for investment, and “IT is raising its hand very high,” he says. “IT is prepared to modernize, to become more efficient, more agile and better aligned with the business—and it is going to need substantial capital to do it.”

Drilling Down

As a whole, the industry is aware of this pivot to digital. For the past three years, it’s been a story of demonstrating mastery of technology and/or acquiring technology. Investments now are focused on positioning to drive these initiatives. The next challenge to tackle is the workforce. Do businesses have the skills and capabilities required to deliver? Despite a robust economy and strong demand for talent, 2018 IT job growth is essentially flat according to Staffing Industry Analysts. Many will attribute this to the shortage of IT talent for high-demand skillsets particularly in the emerging technology arena. Tight talent market is further exacerbated by immigration reform and changing risk appetite. 

According to Remster Bingham, Vice President of Recruiting at Genesis10, the six most challenging technology areas to recruit for are: DevOps, Artificial Intelligence, Data/BI, Cloud, CyberSecurity and Blockchain. The tight labor market, supply and demand and immigration reform are compounding factors. Recently, Genesis10 surveyed IT Executives from Fortune 1000 companies to understand how they are responding to the tight labor market to infuse capabilities and shore up resourcing gaps.  This is what we learned:

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From the survey, we understand that due to continued pressure to reduce cost, IT Executives are shifting to use management consulting firms for strategy work and less for execution and sustainment work efforts.

The pressure is certainly on to take cost out, do more with less and most definitely capitalize on technology. Having access to talent will play a critical role in the game of speed.

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Ami Sarnowski contributes regularly to the Genesis10 blog. Read her post, Robot or Mom? What Will the Future Hold with AI?

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