Techaisle Blog

A Techaisle survey of nearly 900 midmarket firms in the US found that 42% believe that digital transformation is a key to employee empowerment. In an era where employees are expected to move fluidly across a wide range of tasks – and where staffers and contractors expect to be able to work at any time, from any location, with access to any data source they might require – employee empowerment is a key factor in driving corporate responsiveness, staff recruitment and retention and bottom-line success. No wonder improving workforce productivity is #1 in the list of midmarket business priorities.

Digital transformation offers a path to translating the promise of core technologies, such as mobility and cloud, into new empowerment and process options, via the creation of a connected workplace where applications and collaboration systems seamlessly connect to the anytime/anywhere/anyplace/any data demands of the modern workforce. And this digital transformation evolution leads in turn to realization of the other top issues shown above: reduced cost, increased profitability and growth, and better processes and customer outcomes.

The constraints
It is important that the channel step up to helping clients to build digital transformation strategies – because midmarket firms are struggling with a wide range of challenges that impede the evolution to an empowered workforce. From a workforce perspective, digital transformation demands change within both IT and the workforce as a whole. The key digital transformation challenges identified by midmarket firms – are lack of skills, a risk-averse culture and lack of adequate technology to support digitization initiatives.

The third of these issues, adequate technology, is often a digital transformation stumbling block for midmarket IT organizations. The digital transformation vision for employee empowerment includes self-service access to needed applications and data; the reality of many IT shops includes an inability to integrate data across different systems and to deliver it securely on an any place/any device/any application basis, and a mobility strategy that falls short of corporate requirements for security and data protection, auditability and disaster recovery.

The second issue, a risk-averse culture, extends beyond IT to executives who have not yet grasped the potential benefits associated with digital transformation – or, in the context of a fast-moving economy, the need for change. In some cases, this may simply reflect a desire to continue with ‘business as usual,’ while in others, it may stem from an inability to see how their firms can bridge the gap from their current reality to a brighter digital transformation future.

The top issue, lack of skills, is one that needs to be addressed by the channel. It will be years – possibly, decades – before digital transformation skills are so common that every midmarket firm has depth in both IT and in the workforce at large. Until that time, the channel needs to provide leadership to its midmarket clients: it needs to deliver the IT skills and guidance needed to evolve core technology to the point where it supports digital-transformation-ready connected solutions, and it needs to provide the advice that business leaders need, in order to understand and capitalize on the many business benefits that are gained from employee empowerment.

Bridging the gap
Laozi once said that “the journey of a thousand miles begins with one step”. With respect, though, he was not correct: a long and complex journey begins with a vision, and a plan, and proceeds to the steps along the path. What does this mean to growth-focused channel members looking to help clients to ‘bridge the gap’ to employee empowerment?

• From a business perspective, ‘bridging the gap’ means helping executive clients to see the productivity, profitability, agility and innovation potential of an empowered workforce – and perhaps, illustrating as well the possible threat associated with being late to the digital transformation party
• From a technology perspective, ‘bridging the gap’ means delivering a roadmap that shows how current infrastructure can follow a logical path to support for social, self-service and connected, ubiquitous data while enhancing security, backup, audit and DR
• From a skills perspective, midmarket firms need access to professionals who can define the path from basic IT potential to real business benefit – and will find that guidance in the channel, from firms that have themselves made the leap into the digital transformation (DX) future.

Employee empowerment begins with a vision – and a plan. Midmarket clients urgently need advisors who can deliver both – and the business benefits that are unlocked by DX-empowered employees.

Senior executives in midmarket organizations care about digital transformation – and as a result, channel members can leverage their understanding of key Digital transformation objectives and roadmaps into long-term, sustainable relationships with senior decision makers.

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Senior executives in midmarket organizations care about digital transformation – and as a result, channel members can leverage their understanding of key DX objectives and roadmaps into long-term, sustainable relationships with senior decision makers.A Techaisle survey of nearly 900 midmarket firms in the US found that 59% believe that digital transformation is a key to operational efficiency, streamlining processes within the business. In fact, operational efficiency is the most important issue driving digital transformation for most advanced, mainstream and least advanced midmarket firms.

Looking at the figure above, there is a clear progression as firms move from ‘siloed’ to ‘holistic’ DX strategies. The focus of innovation moves from containing IT costs to establishing IT sustainability – the ability to effectively manage IT delivery into the future. And primary business objectives also evolve, moving from a need to control operational cost to focus on profitability and product/process quality. IT advisors who can ‘connect the dots’ from tactical to strategic DX outcomes earn the opportunity to work with executive sponsors on long-term transformation roadmaps.

It is important that the channel step up to helping clients to build DX strategies – because midmarket firms are wrestling with a wide range of obstacles to digital transformation adoption. The ‘top 10’ list of midmarket DX inhibitors includes a lack of skills (the #1 impediment, cited by 31% of midmarket firms), reluctance to change current practices and corporate risk aversion, inadequate installed technology and a lack of investment capital for new systems, and an inability to build a compelling business case; lack of an executive sponsor and of technical leadership to support adoption of DX are also significant constraints.

Trusted channel members can help executive clients to address at least half of the top DX impediments. By working with executives to plot a DX path to operational excellence, the channel can provide the business case that underpins executive sponsorship for DX initiatives. And by investing in the technology skills needed to facilitate digital transformation – by delivering technical leadership – the channel can bridge the gap between the capabilities needed to achieve the DX vision and the constraints imposed by legacy systems and change-wary staff and management.

It’s said that Henry Ford once claimed that “If I had asked people what they wanted, they would have said faster horses.” But that’s not really true. Ford knew that people wanted to move faster and farther – they wanted to see and do things that they could not previously achieve. He was responding to the underlying, driving desire, and moving beyond the current constraints.

The midmarket is clearly looking for its own innovative suppliers – firms that are able to deliver the operational excellence associated with digital transformation by finding ways to move beyond current constraints. In collaboration with suppliers who are capable of supporting the whole journey from legacy to DX, channel leaders will establish the technical and operational roadmaps that their clients need to make the leap into the ‘next stage’ of competition – helping the clients who depend on them to build capabilities that are attuned to the needs of the digital business world.

The question of whether an SMB IT buyer benefits most from a strategy of working with a single or primary supplier responsible for integration and management of all resources, or whether it is better to procure individual components, systems and services from a larger group of ‘best of breed’ suppliers, is nearly as old as IT itself. The question is especially important to SMBs, which generally have limited internal resources, and would benefit from third party integration and streamlined procurement processes. Techaisle has observed a trend towards a more holistic procurement strategy as small businesses encounter increasing requirements for cross-product integration supporting digital business practices and develop greater appreciation for the value of a trusted technology advisor.

Preference for a single supplier

Over time, Techaisle’s SMB research has consistently found that a large proportion of SMB buyers would be comfortable dealing with a single primary vendor if that firm was able to supply all of the technology required to deliver on the full scope of IT/business requirements. Taken as a whole, the commentary from those in favor of a single supplier strategy highlight three imperatives:

1. Breadth of product portfolio matters
2. Services matter
3. Economics matter

The SMB IT solution stack

Figure below illustrates the Techaisle SMB & Midmarket IT solution stack. It is comprised of four main sections. At its core, the stack defines an SMB’s core systems (compute infrastructure) requirements. The software stack is positioned at the top of the systems components. The left-hand side of the figure highlights major categories included in the services stack. The right-hand side of the figure contains many of the major categories that comprise the security stack. A clearly-defined IT stack matters to a definition of what the ‘art of the possible’ looks like in the SMB IT world.

IBM’s acquisition of Red Hat makes sense on several levels: it adds a high-growth software portfolio to boost software and recurring revenue, and provides IBM with a bit of a ‘halo’ in the tech community, as it now controls the industry’s leading Open Source supplier.

Moving down a level, though, why might this acquisition matter – and to whom? Techaisle’s take on the most important angles that shaped and will determine the success of the deal. (Download Techaisle Take report)

Who does this matter to?

Imagine you are an enterprise with a large legacy infrastructure, possibly in a regulated industry (like financial services or government). You see that IT service delivery is advancing faster outside your walls than within your firm, as other businesses aggressively adopt cloud, Agile, DevOps and containers.

You are motivated to try to integrate these advanced platforms/products/methodologies into your environment as well – to capitalize on the advantages that they can deliver, or because you’re afraid that if you don’t act you’ll be left behind, watching competitors introduce new IT-enabled capabilities faster and at lower cost than you can.

In an organization like this, IT executives are unlikely to want to dive headlong into a deep/committed relationship with a public cloud provider like AWS. They will understand the importance of building a multi-cloud, hybrid IT infrastructure, but will want to manage that environment internally, with a focus on existing capabilities (both installed products and skills). “Cloud first” won’t be a living mandate – it might describe an approach to new and non-critical applications, but won’t be a serious consideration for core systems of record.

Advantages (and some potential pitfalls) of a combined IBM/Red Hat