Legacy Networks Keep HighTech Businesses Lagging
Syed is Accenture's global head of high technology and helps clients with growth strategies, business innovation and supply chain optimization.
Today, new artificial intelligence and advanced technologies place ever-increasing demands on data: incredible speed, high security and absolute reliability. Network problems caused by legacy networks represent a major obstacle for companies looking to reinvent themselves using these technologies. According to one of our most recent studies, high-tech companies are particularly vulnerable and experience the highest number of network problems (63%) compared to other industries.
These problems hinder the ability to innovate, lead to high costs and impact various business areas such as technology efficiency, business efficiency, customer experience, trust and privacy, sustainability, etc. For example, 71% of technology companies surveyed believe their company is at risk of increasing tech debt, compared to the global average of 56%.
Anti-parasitic solutions are not enough
IDC Global 2000 predicts that organizations will experience two to three network outages per year over the next two years. Interestingly, technology companies spend a larger share of their total IT budget on networking than other industry groups (30.9% compared to an average of 23.7% for technology companies). The problem is that nearly half of the network budget is often spent on upgrading existing networks.
As a result, the adoption of new network technologies, e.g. 5G, private cellular networks, Cloud Wide Area Network (Cloud-WAN), Low Earth Orbit (LEO) satellite networks, Wi-Fi 6E, etc. Network solutions (such as cloud, edge and AI-based operations) are vulnerable.
However, 78% of technology leaders believe legacy networks are a barrier to cloud growth and digital transformation. As explained in the IDC study, “Organizations that report using multiple AIOps-based technologies and methods believe they can avoid an average of 201 hours of downtime per year, primarily across servers, storage, networks, and security systems.”
So what stopped them?
To overcome the skills barrier
While most technology companies recognize the importance of modernization, 22% of CTOs believe their company has the right skills to implement advanced network solutions and begin the modernization journey. Given the number of infrastructure-related companies that exist, it's easy to imagine why this journey might seem daunting.
However, delaying building a network to meet current and future needs is not a sustainable strategy. As the growing demand for data puts more pressure on existing networks, the associated problems and costs also grow.
High-tech companies looking to survive or diversify have no choice but to take the necessary steps to upgrade their capabilities and modernize their network infrastructure.
3 steps to build a future network
To help technology companies embark on this journey, we have outlined a three-phase transformation approach that promotes greater business resilience, profitability and innovation.
• Allocate your budget to network upgrades. Businesses that modernize their existing network can achieve a 30% improvement in three years, reducing total network costs by up to 21% per year. Over 50% of the industry spends 2.4 times more on innovation than on maintenance.
• Stabilize your current network, then modernize it and accelerate innovation. Instead of one-off “solutions,” plan strategic network transformation interventions that not only solve the problem but also address long-term technology debt. Network transformation can be seen as a continuum of different phases: stabilization, modernization and accelerating innovation by optimizing the network at each phase. These measures should be aligned with the company's specific business priorities and level of preparedness for change.
• Adopt good online practices. Start by aligning your network strategy with the executive agenda by ensuring that business strategy and objectives are the foundation of your network strategy. It uses a cloud-based, software-defined network infrastructure to manage communication between multiple clouds. Invest in the skills of future network talent by developing yourself or working with partner networks.
To stay ahead of the competition, companies need to look ahead and think about the future. But how can companies grow and grow if their network is nitrogen? Modernizing networks and strengthening the digital core is essential to the success of any business. A modern network is built on flexibility and efficiency, it is designed to be creative and intelligent. This requires companies to constantly listen to technology and business needs and adapt their networks to keep up with these changes.
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