South African organisations are spending more than 50% of their IT budget mainly on maintaining legacy systems and about 20% is spent on security requirements. Many CIOs are still trying to contend with the challenge of implementing a new digital strategy, while driving down IT spending and simplifying infrastructure.
So says Claude Schuck, regional manager for Africa at Veeam who explains there is still a gap between the customer demand and how effectively organisations can deliver application, service data availability 24/7, and ultimately drive down IT costs.
"Even for companies ahead of the curve, making progress with their digital strategies and juggling cost reduction while simplifying requests is still a mission. Where these gaps occur, new agile players enter the market with solutions that more directly address customer needs.
"An organisation that doesn't have the technology needed to meet customer demands, will see its customers go elsewhere - it might not happen overnight, but it will happen. A strategy is required for digital transformation, that mitigates against digital disruption, but also identifies market opportunities generated by the new business environment," explains Schuck.
Organisations, he continues, often end up overspending on their IT budget because IT departments get swayed too easily with 'new trends', internal request and demands.
"Sticking to a budget plan with a planned end goal in mind, is key in delivering an optimal service to the business. Executing it in its entirety will lead to optimal budget and feature utilisation. Often the changes a business needs to make to become digital are not just down to the CIO, for it is more than just a technology challenge that needs to be overcome. Before businesses can begin their digital journey, first they must overcome their own internal barriers to change," he points out.
Gavin Sheehan, general manager: Business Intelligence at Decision Inc, says CIO's with a focus on cost reduction can leverage new technologies and a move away from owned assets to assist them to make better use of available budgets and create space within their overall spend to continue driving their digital strategy.
"Cloud computing, user-based licensing models and collaboration tools are all affording the CIO an opportunity to reduce capital expenditure spend while still enabling the organisation to benefit from the latest technology and solutions. An additional benefit is that most of these costing models are demand based and as such the business can scale up, or down, depending on their immediate needs," he explains.
According to the Global VMware State of the Digital Workspace Report, study, organisations that have successfully executed digital initiatives saw improvements in their revenue streams.
"Over half of EMEA businesses (51%) that have successfully executed digital workspace initiatives saw improvements in their ability to more rapidly bring new revenue streams. Almost half (49%) of IT and business decision-makers in EMEA saw improvements in total management costs after successfully executing on digital workspace efforts, while 52% realised overall cost improvements.
"The top perceived barrier to digital adoption in EMEA was security concerns (43%), followed by the issues of budget (38%) and required skills needed to support implementation (25%)," reveals the study.
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