Rise of Globalization Creates IT Imperative for Business Leaders

Posted by Mike Vizard on Sep 1, 2016 12:00:00 PM

USA.jpgGlobalization is one of those classic double-edged swords that cuts both ways. Most companies in the U.S. tend to think of globalization as an opportunity to expand into new markets. But, as it turns out many companies in those emerging markets view globalization as an opportunity to enter larger, and  more established markets.

Emerging markets and globalization

In fact, a new global survey of 1,800 business executives conducted by Epicor Software suggests that companies in emerging markets are making more aggressive use of IT to achieve those claims than companies in larger markets.

Specifically, the study finds that 77 percent of the executives surveyed in emerging markets cited having access to cutting edge technology as being a key to their success; compared to just 62 percent of the executives in developed markets.

The study suggests the reason for this is that companies in emerging markets simply have access to fewer resources; especially people with specific types of crucial skills. Because of that issue it turns out many of the companies in emerging markets are more willing to make use of, cloud applications to advance their aims. In contrast, many companies in developed markets are trying to extend business processes that depend heavily on premise IT environments that are considerably less flexible.

To drive that point home, the survey finds that three quarters of the executives in emerging markets said having flexible business processes was a significant factor in their success; versus 62 percent who said the same in developed markets.

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For IT services providers that observation makes a compelling argument for getting companies in established markets to reconsider their IT strategies. Many of them have crafted ambitious globalization plans that are already proving difficult to achieve. Most of the business applications they depend on today were never designed to support 24/7 business transactions distributed across the globe. Even fewer of them have the capital resources needed to build out the data centers required to support those applications.

Most business leaders understand they can’t grow their business unless they enter new markets. The hubris that might go before the fall is the assumption that there are not competitors in those markets aiming to expand their reach into the very developed markets that the companies those business executives lead now serve.

There’s a lot chatter these days about the need for greater IT agility to respond faster to rapidly changing business conditions. But few organizations have driven that mantra yet into the fabric of their IT operations. In fact, much of the usage of public clouds is being driven by developers often looking to end run internal IT departments that are perceived to be wedded to both inflexible technologies and outdated processes.

Opportunity for IT providers

IT services providers have a unique opportunity to broker conversations to heal that divide. Developers don’t typically appreciate all the complexity that goes into making IT infrastructure simple to use. Conversely, many IT operations specialists don’t really appreciate yet is the speed at which a digital business operating on a global basis needs to truly operate.

Of course, being able to broker that conversation means be able to understand the strategic business imperative that drives an investment in IT. Unfortunately, far too many IT services providers still wait for the business to figure that out as opposed to generating demand for IT services by proactively driving a conversation about the role IT plays in making the business competitive in the first place. IT service providers may not always get paid for providing that advice. But without the size, available opportunities to an IT services provider is not going to be nearly as large as it could or should be.

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Topics: IT Services Trends

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