Organizations are looking into new options for reallocating IT spend and freeing up money for digital transformation. By reevaluating how application services management is done and implementing a new approach focused more on performance and outcomes than resources, organizations can drive significant cost savings that can then be diverted to transformation. Learn more about such an approach in this white paper.

The “keep up” versus “step up” challenge

In the digital world, organizations of all types and sizes are reevaluating their strategies, business models, processes and systems to discover new ways to drive transformation and performance through advancing technologies such as cloud, Internet of Things, big data, mobility, cybersecurity and more. Digital technologies like these are revolutionizing how organizations operate, how they interact and serve their customers/citizens, and the kinds of products and services they deliver, opening the door to new revenue streams, improved efficiencies, increased customer loyalty and greater differentiation in the market. Investing in these technologies is no longer an option, but a business imperative to stay competitive in the 21st century.

A major challenge all organizations are facing on the path to digitalization is balancing the need for investing in transformative technologies and programs—i.e., “step up” activities—with the need to maintain the day-to-day “keep up” activities critical to running their business. Some also use the terms “run the business” versus “change the business,” or “bi-modal IT,” but regardless of the terminology used, the challenge is the same—organizations are finding it difficult to find funds for accelerating business transformation due to revenue stagnation, tight budgets and increasing regulation.

Every year, as part of CGI’s Voice of Our Clients program, we conduct in-depth, face-to-face interviews with client executives across the industries we serve to get a pulse on the trends impacting their organizations, the business implications of those trends, and their resulting top IT priorities. In 2015, we interviewed 965 executives—44 percent from the business side and 56 percent from IT— across 10 industries and 17 countries.

The results show that while digital transformation and the IT investments required for it are top of mind for executives, there is increasing tension in achieving the right balance between activities that run the business and those that change it. Executives are seeking to invest in the following:

  • IT modernization to drive agility and business transformation
  • Big data and digital insight to improve the customer experience
  • Supply chain optimization to digitally connect all stakeholders across the enterprise
  • Enhanced cybersecurity to protect stakeholders
  • New delivery models, including SaaS, cloud, managed services/outsourcing, etc., to align revenue and costs
  • IT human capital to attract and retain the talent required to manage the strategic and execution aspects of the organization