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The Future-Ready Enterprise Driving Business Results in the United Kingdom Today while Preparing for the Challenges of Tomorrow An IDC InfoBrief, Sponsored by Dell | February 2016

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The Future-Ready EnterpriseDriving Business Results in the United Kingdom Today

while Preparing for the Challenges of TomorrowAn IDC InfoBrief, Sponsored by Dell | February 2016

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The Future-Ready EnterpriseDriving Business Results in the United Kingdom Today while Preparing for the Challenges of Tomorrow

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What is a Future Ready Enterprise?A “future-ready” organisation is one that is always extending the abilities of its IT infrastructure and applications while also pursuing IT organisational practices that enable it to identify and address changing business and technology needs. These future-ready organisations not only react quickly to market changes but are also better able to become disruptors themselves.

Source: IDC’s Future-Readiness Enterprise Study | June 2015

Extends IT infrastructure abilities

Drives new sources of competitive differentiation

Supports ongoing business processes

Business success or failure ties directly to the effectiveness and

timeliness of the business’ IT service delivery environments.

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The Four Levels of Enterprise Future ReadinessA recent IDC study

quantified the extent to which future readiness

matters in today’s digital business world.

IDC identified four levels of enterprise future readiness:

Business success or failure ties directly to the effectiveness and timeliness of the business’ IT service delivery environments. The more future ready the organisations in the study were, the stronger their business outcomes across a wide range of key performance indicators (KPIs), from revenue growth and profitability to employee productivity and retention.

Source: IDC’s Future-Readiness Enterprise Study | June 2015

Current Focused Future Aware Future Focused Future Creators

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THE MOSTIMPORTANT FINDINGS

FROM IDC’S STUDYRegardless of the level or scope of focus on the three technology aspects, an effective IT organisation that

can work closely with lines of business (LOBs) is critical to becoming a truly future-ready enterprise.

Organisations’ future-ready efforts can also deliver major benefits even if the organisations focus on improving

whichever specific aspects of their IT infrastructure (converged, cloud, BDA) are most important

for their needs today.

Future Creators

16%#1

Key FindingsThe more future ready the organisations in the study were, the stronger their business outcomes across a wide range of key performance indicators (KPIs), from revenue growth and profitability to employee productivity and retention. Future Creators, the most future-ready organisations, outperformed all other groups and significantly outperformed Current Focused in all business metrics studied. Today, only 16% of companies in the United Kingdom fall into the Future Creators category.

Future readiness is an ongoing journey. You can make immediate progress rather than waiting to reach the top of the index.

THE MOSTIMPORTANT FINDINGS

FROM IDC’S STUDYRegardless of the level or scope of focus on the three technology aspects, an effective IT organisation that

can work closely with lines of business (LOBs) is critical to becoming a truly future-ready enterprise.

Organisations’ future-ready efforts can also deliver major benefits even if the organisations focus on improving

whichever specific aspects of their IT infrastructure (converged, cloud, BDA) are most important

for their needs today.

Today, only 16% of companies in the United Kingdom fall into the

Future Creators category

Future Creators

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The Four Key IT Aspects That Define Future-Ready Companies

Converged InfrastructureEnables simpler, more efficient, and more scalable IT infrastructure within an organisation’s own datacenters.

CloudProvides greater agility, flexibility, and data control at the application level and the business level, improving productivity and enabling resource-intensive applications no matter where they are.

Future-minded ITorganisational practicesAre the foundation that ensures the sustained effectiveness of investments in the other three areas.

Big Data and AnalyticsEnables better and faster business decisions by getting the right data to executives, frontline employees, and (increasingly) customers at the right time, with most advanced organisations also using BDA to automate critical business functions for improved accuracy and efficiency.

The remaining 84% of companies are missing out on the complete benefits of future readiness, but IDC

identified four areas where the right investments can speed the journey to a more successful future.

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Future-Readiness Drives Improved Business ResultsIn today’s economy, the success of organisations is driven by their ability to innovate and to adapt to change. A future-ready organisation has the IT infrastructure and organisational practices in place to both initiate change and adapt to outside disruptions.

Many organisations that IDC speaks with are not future ready today, and they risk falling further behind if they don’t take steps to begin their future-readiness journey.

Source: IDC’s Future-Readiness Enterprise Study | June 2015

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Future-Readiness Category Profiles

% of UK Sample 16% 33% 35% 16%Converged •EvolutionaryapproachtoITinfrastructure •EvolutionaryapproachtoITservicedelivery •RevolutionaryapproachtoITservicedelivery •RevolutionaryapproachtoITservicedeliveryInfrastructure • IndividualisticdrivenITtransformation •Team-drivenITtransformation • ITorganisation–drivenITtransformation •BusinessdrivenITtransformation

Cloud •NocloudeffortsdrivenbyITorganisation •Pilot/limitedprivateclouddeployment •Well-definedpublicandprivatecloud •Crosscloudcatalogues,audit/securityand •AdhocuseofpublicSaaS,PaaS,andIaaS byITorganisation servicecatalogues datacontrol cloudsbyBUs • ITnotificationofcloudusebyBUs • ITorganisationtrackinguseand •Usage/performancetrackingandautomated implementingshow-back/chargeback balancingacrossdiversifiedclouds across multiple clouds

BigData/Analytics •LittleornoBDAstrategy •Department-levelBDAstrategy •Businessunit-levelBDAstrategy •Enterprise-wideBDAstrategy •BDAoutputshavelittleinfluenceon •BDAoutputshavesomeinfluenceon •BDAoutputshavestronginfluenceon •BDAoutputshavesignificantinfluenceon decision makers decision makers decision makers decision makers

IT Organisation • IT/LOBoperateona‘request/ • IT/LOBarealignedforspecificfunctions • IT/LOBarealignedacrossall • IT/LOBarealignedacrossall requirement’basis • ITworkforceplanningis12-month meaningfulactivities meaningfulactivities •LesslikelytoengageinIT hiringplan • ITworkforceplanningconsidersfuture • ITworkforceplanningincludes workforce planning IT infrastructure and career planning career planning and infrastructure scenarios

n = 200 Note: Figures may not add to 100% due to rounding.Source: IDC’s Future-Readiness Enterprise Study | June 2015

Organisations were measured and ranked by behaviours in each of the aspects that were most closely linked to positive business outcomes. Only 16% of the organisations in our UK study displayed the greatest degree of future readiness and were classified as Future Creators. They excelled across all four key aspects and reported the strongest results. Above is a summary of the four levels, as well as their key characteristics.

Current Focused Future Aware Future Focused Future Creators

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Future-Ready Organisations Enjoy Better Business Results

Source: IDC’s Future-Readiness Enterprise Study | June 2015

IDC’s Future-Readiness Enterprise Study showed that the higher organisations move on the future-readiness scale within individual aspects and across multiple aspects, the better their business outcomes across a range of metrics. The difference can be seen by comparing business outcomes between the most future-ready organisations and the least future-ready organisations.

Future-Ready respondentsthat saw an increase

in customer satisfaction

KPI Improvements Seen over the Past Three Years

Increase in customer satisfaction

Increase in new customer acquisition

Reduction in time to market fornew products and services

Increase in employee retention

Increase in revenue from new products

Increaseinrevenueorsales/bookings

Increase in profit margin

Increase in employee productivity

59%19%

54%19%

50%23%

48%33%

43%21%

40%15%

15%34%

32%

Future Creators n = 84

n = 156Current Focused

20%

59%

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The Future-Readiness Journey

Source: IDC’s Future-Readiness Enterprise Study | June 2015

To maintain future readiness, organisations can’t become complacent — they will need to think of future readiness as an ongoing journey and stay nimble, adaptable, and innovative to maintain their competitive edge.

The economic benefits are clear — future readiness corresponds to better business outcomes. But organisations that don’t find themselves at the top of the scale should not be disheartened. Future readiness is an ongoing journey, and organisations can see significant improvements in business outcomes from increasing their future readiness regardless of their starting point.

“IT Infrastructure has become the backbone of any fast growing business” CFO, UK IT Services Company

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Future Creators have innovative IT that seeks out new ways to do things

Source: IDC’s Future-Readiness Enterprise Study | June 2015

Future Creators are more likely (50%) to have an IT capability that is able to support their need for innovation and agility by actively engaging with business units to bring new technologies into play for competitive advantage. This contrasts with Current Focused organisations that are most likely (51%) to invest only in line with their competitors.

How does your company adopt and use information technology and IT service delivery models?

Future Creators have IT capabilitythat can support the agility and innovationthat a fast moving business requires

Current Focused(n=41

Future Aware(n=77)

Our IT organisation works closely with our business units to aggresively integrate technologies into customer facing programs and internal business initiatives.

To the extent our competitors are using technology to engage with customers and employees our organisation strives to make similar investments and use similar service delivery models to stay competitive.

Future Focused(n=49)

Future Creators(n=33)

Innovator Early Majority

12%16%

43%

50%51%

28%

16%

9%

50%

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Future Creators Moving Quickly to Private Cloud

Source: IDC’s Future-Readiness Enterprise Study | June 2015

Future Creators are moving most quickly (16%) to transform their IT infrastructure from one of individual systems and silos supporting specific applications to a private cloud model of pooled compute, storage and networking. This gives them the flexibility to deploy new workloads more easily as business needs change.

How does your company adopt and use information technology and IT service delivery models?

Future CreatorsFuture Creators are twice as likely to run their IT infrastructure as a private cloud with homogenous compute, storage and networking.

Current Focused(n=18)

Future Aware(n=44)

Future Focused(n=24)

Future Creators(n=14)

7%9%

8%

16%

2X

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50%

Converged Infrastructure Provides Direct IT Infrastructure Benefits Converged infrastructure — integrated bundles of hardware and software components grouped into a single optimised package — allows organisations to better utilise their existing IT assets. It provides an agile, scalable foundation organisations can rely on as they change business processes and launch new services.

n = 100Source: IDC’s Future-Readiness Enterprise Study | June 2015

Converged IT Infrastructure Benefits% respondents

Future-Ready respondents thatsaw lower operating costs

50%

49%

46%

45%

42%

40%

Lower operating costs

Improved business agility

Greater IT staff productivity

Fasterservice/applicationprovisioning

Greater resource utilisation

Greaterbusinessagility/flexibilityto adapt to changes in the market

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Future-Ready Organisations Have a More Sophisticated Approach to the Use of Converged Infrastructure While many organisations cite convergedinfrastructure benefits in terms of IT improvements, a higher percentage of future-ready organisations are seeing business benefits from their converged infrastructure. For example, comparing Future Creators with Current Focused, we see:

Of future creators see faster service provisioning as a significant benefit delivered by converged infrastructure, while only 25% of current focused see it as a significant benefit.

By comparison, 16% of Current Focused and 48% of Future Creators see the ability to allocate IT staff to innovative projects as a significant benefit of converged infrastructure

While 20%of Current Focused and 41%of FutureCreators seegreater business agility as a benefit of converged infrastructure.

63%

Current Focused Future FocusedFuture Aware Future Creators

Current Focused Future FocusedFuture Aware Future Creators

Source: IDC’s Future-Readiness Enterprise Study | June 2015

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Future Creators More Closely Measuring Infrastructure UtilisationFuture Creators are measuring not only more frequently but also more accurately. They are most likely to use an integrated suite of tools to measure utilisation rates (77%) and not rely on ad hoc or manual processes for measurement compared with Current Focused (30%).

Measure Compute, Storage, Network UtilsationDaily/OngoingorRegularly

Source: IDC’s Future-Readiness Enterprise Study | June 2015

77%Future Creators that use integrated tools to measure utilisation rates

Current Focused(n=18)

Future Aware(n=44)

Future Focused(n=24)

Future Creators(n=14)

33% 33%

66%

93%

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Cloud Provides Agility,Flexibility, and ControlCloud adoption isn’t about a specific product or service delivery model. It reflects an approach to application design, deployment, and delivery that allows organisations to get more effective use out of their own IT and data assets. Cloud gives organisations the ability to scale services up and down more quickly to better align with real business cycles and meet fluctuations in demand.

n = 119Source: IDC’s Future-Readiness Enterprise Study | June 2015

52%

Future Creators that find cloud enables higher service availability

52%

46%

46%

46%

45%

38%

37%

37%

34%

31%

Higher service availability

EnablementofBigData/analytics

Greater developer productivity

Improved business agility

More effective use of infrastructureand data resources

Fasterservicecreation/launchofcustomerfacing applications (faster time to market)

Faster adoption of new business applications

Fasterservice/applicationprovisioning

Reduced business risk

Enablement of mobile device usein the enterprise

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58%

Future Creators More Likely to Have Highly Diversified Cloud StrategiesFuture Creators are not only making more extensive use of cloud but also have more sophisticated cloud strategies using the right cloud option for each requirement.

Source: IDC’s Future-Readiness Enterprise Study | June 2015

Can Easily Choose Among Three or More Cloud Options WhileManagingThemasaSingle Resource

Future Creators that find cloud enables higher service availability

Current Focused Future FocusedFuture Aware Future CreatorsCurrent Focused

(n=20)Future Aware

(n=51)

Future Focused(n=35)

Future Creators(n=13)

6% 6%

23%

58%

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Big Data and Analytics (BDA)Drives Business-Level Benefitsfor Future Creators Big Data and analytics (BDA) is critical for business innovation and transformation. It allows organisations to capture insights from, and better monetise, their data by getting the right information to the right individuals at the right time. BDA benefits go beyond data democratisation, with benefits including better ability to predict events.

n = 116 Source: IDC’s Future-Readiness Enterprise Study | June 2015

60%Future Creators that find Big Data and Analytics gives their organisation faster access to relevant information

60%

49%

44%

44%

43%

41%

Faster access to relevant information

Better ability to predict events or outcomes

Better information sharingthroughout the organisation

Faster reaction time to external events

Reduced cost of report generation

Reduced data quality problems

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Future Creators Providing More Access to BDA at All Levels

Source: IDC’s Future-Readiness Enterprise Study | June 2015

Future Creators are also most likely to provide access to BDA (Big Data analytics) directly to executives to a significant extent, with 100% providing access compared with 77% of Current Focused. This implies that Future Creators have trust in the data. Staff don’t have to spend time cleaning and checking data and making data actionable before “sending it upstairs” for decisions.

Have Access to BDA at the Right Time to a Significant Extent

Future Creator executives that have access to BDA at the right time 100%

77%

60%

77%

100%

21%

51%

81% 80%

Current Focused(n=28)

Future Aware(n=41)

Future Focused(n=23)

Future Creators(n=24)

Executive

LOB Operational Staff

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97%

IT Organisational Practices Are the Catalyst for Future Readiness

Source: IDC’s Future-Readiness Enterprise Study | June 2015

Whilesuccessfulconvergedinfrastructure,cloud,andBDAstrategiesare the technological underpinnings of future-ready organisations, effective and aligned IT organisations are also essential. An effective IT organisation contains the right people with the right skills to implement and maximise the benefits of those technologies.

Future Creators that find their IT organisation is very capable of supporting business needs

ITOrganisationVery/ExtremelyCapableof Supporting Business Needs

Current Focused Future FocusedFuture Aware Future Creators

Current Focused(n=41)

Future Aware(n=77)

Future Focused(n=49)

Future Creators(n=33)

49%

82%93% 97%

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95%

Future Creators Have a “Continuous Improvement” Approach to IT

Source: IDC’s Future-Readiness Enterprise Study | June 2015

Just as with their technology infrastructure, Future Creators continually work to improve their IT departments. This includes regularly and continuously improving the skills of the IT staff and measuring the success of the IT organisation through the lens of the LOB stakeholders.

IT Organisation Has Service-Centric Culture, Tracked “Outside In”

Future Creators that find their IT organisation has a service-centric culture

Current Focused(n=41)

Future Aware(n=77)

Future Focused(n=49)

Future Creators(n=33)

35%

67%

93% 95%

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Pitfalls to Avoid Achieving greater levels of future readiness does not come without risks and pitfalls to avoid. Below are a few of those pitfalls.

Going in without a planCompanies need to be deliberate and thoughtful about their approach to becoming more future ready. Becoming future ready involves more than simply throwing new technology into the IT mix.

Proprietary systemKey to being future ready is the flexibility to adapt to unforeseen circumstances. Locking into a proprietary offering or framework limits the organisation’s flexibility and increases the risk of choosing a technology dead end.

Big betsOrganisations should take a stepwise approach to improving their future readiness, building incrementally ontheITinfrastructureandpracticestheyhaveinplace.WithsomuchofthebusinessdependentonIT,upgrading the infrastructure amounts to performing an organisational heart transplant.

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Essential Guidance Future readiness is critical to business success in today’s mobile and data-driven world. To improve future readiness, companies must take several steps, including: >> Focus on long-term outcomes Future-ready enterprises are less focused on cost take-out and more focused on strategic business outcomes such as enhanced organisational agility, greater service availability, and more effective IT staff allocation.

>> Take steps to improve your future readiness, no matter where your starting point is Set well-defined intermediate goals aligned with your long-term strategy to become more future ready. Regardless of where your organisation is now, moving up a single level or focusing on a specific aspect leads to significant improvements.

>> Start your future-readiness journey by developing an overall strategy Future Creators have a strategy that drives their business decisions across technology, processes, and IT organisational practices.

>> Focus on the areas that will have the biggest impact on your business Though future readiness is a journey, there is no single path to get there.

>> Assess your own state of future readiness, and get help if you aren’t where you need to be IDChasdevelopedaFuture-ReadyEnterpriseIndextool,whichisavailableatwww.dell.co.uk/fre.Youcanusethistooltoassess where you are on the future-readiness curve today.

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Methodology The information for this InfoBrief came from IDC’s June 2015 global Future-Ready Enterprise Study, sponsored by Dell. In the United Kingdom, IDC surveyed 200 members of senior and executive management in IT and lines of business as well as information workers withknowledgeofconverged infrastructure,BigData,and/orcloud.They came from organisations with 100 employees or more across a broad range of industries. Survey respondents were asked about their current use of converged infrastructure, Big Data, and cloud as well as their IT department organisational practices. In addition, they were asked about a variety of KPI metrics, enabling IDC to create an index linking IT infrastructure and organisational metrics to KPIs.

IDC developed the future-readiness levels — Future Creators, Future Focused, Future Aware, and Current Focused — using the following methodology:

Responses to all questions in the survey were scored on a four-point maturity scale. For example, for the question “What percentage of

infrastructure is supported by hybrid cloud?” 0% = 0 points and 50%+ = 3 points. Break points were manually normalised.

IDC performed statistical analysis to identify questions best correlated topositivebusinessoutcomes. For example, thequestion“What is thevirtualisation rate of your IT infrastructure?” is highly correlated to the business outcome “% revenue growth over the past three years.”

IDC then selected a subset of 16 questions with the highest statistical correlation that also balanced the four key areas: converged infrastructure, cloud, BDA, and future-minded IT organisational best practices.

Next, IDC created a maturity scoring histogram for all responders for the 16 questions to identify and score ranges for the four maturity categories and identified natural cutoffs based on mean and standard deviations.

The survey was supplemented with two focus groups, one with senior IT managers and one with senior line-of-business managers.

Current Focused Future Aware Future Focused Future Creators