DEJ completed a state of the market study titled, “24 Key Areas Shaping IT Performance Markets in 2022″ (publishing mid July). Access to a draft of the study has been available to user organizations from DEJ’s community for several weeks and one of the top questions that we received was, ” Is there a vendor that can address all of the key areas?”. A short answer to that question is, “No, not even close”. Publishing this study will be followed up with report(s) that are identifying top vendors in addressing key user requirements reported in the research and that analysis further proved that there is no clear leader in managing IT performance.
However, if anybody is to build a “silver bullet” for managing IT performance, the research shows what the key attributes of that solution should be. This Research Note identifies these 11 attributes.
1 – Managing data and creating insights at scale
This competency is on the top of the list, or very high, for nearly all key areas that organizations are looking to address. DEJ’s recent Observability market study shows that enabling unique customer experiences is their #1 goal. Eighty-four percent of organizations in the upcoming study reported that data management and analytics is a key enabler for creating and managing differentiating customer experiences. The same goes for key areas such as managing complexity, enabling a cloud native journey, maximizing the value of innovation and focusing on high-value work.
2 – True visibility into user experience
One of the key stories from the study is the increasing need to focus on high-value talent and bridge a modernization skills gap. Capabilities for monitoring and managing user experience from a user’s perspective were reported as a key requirement in multiple areas. It should be noted that the market for user experience monitoring solutions is not homogenous, as vendors are taking different monitoring approaches that result in diverse outcomes. Seventy-one percent of organizations in DEJ’s research reported that the metrics which IT is providing do not reflect a true user experience. Therefore, organizations should be looking beyond service availability and response times and deploy solutions that are also capturing user engagement and sentiment, usage patterns, benchmarking capabilities and business context of leveraging digital services.
3 – Effective in cloud native environments
DEJ’s 2020 version of a similar study revealed that managing dynamic complex environments is changing the landscape for IT performance management solutions. This year’s study shows that 68% of organizations that have adopted a cloud native approach improved their ability to create better customer experiences. However, 50%, or more of these organizations reported seven different challenges for adopting and managing cloud native environments. With more organizations looking to leverage cloud as an instrument for innovation and creating a competitive advantage, IT performance solutions have to include strong capabilities for managing these environments.
4 – Working well with open source technologies
Fort-six percent of organizations reported the inability to continue leveraging existing open source tools as a key obstacle for deploying new IT performance solutions. The study shows a 37% increase in the number of organizations building their IT performance strategies around open source over the last 2 years. Organizations reported that a do-it-yourself (DIY) approach is not effective in the long run and many of them are finding that using commercial solutions on top of open source to be a winning combination.
5 – Providing a business context
Seventy percent of organizations reported a lack of business context from management solutions as a key challenge. This has a negative impact on a number of other key areas, as organizations report a lack of business context as one of the key reasons for experiencing issues such as an inability to maximize the value of innovation, lack of visibility into IT performance, inefficient allocation of resources and the inability to create differentiating customer experiences.
6 – Measuring business impact
Only 39% of organizations in DEJ’s recent research reported that their innovation initiatives had a positive impact on business performance. However, that is not to say that most of the organizations aren’t benefiting from innovation, because out of the remaining 61% a total of 51% responded with “don’t measure/ don’t know”. Eighty-four percent of organizations reported that they are looking to deploy capabilities for connecting IT performance to business outcomes, which makes this capability the highest ranked in this research. Some vendors are providing capabilities for correlating IT performance with business goals, but what organizations are really looking for is a clear, transparent and measurable connection to business outcomes.
7 – Enabling a true Observability
The study reveals that 70% of organizations define Observability as the next generation monitoring. That shows that there is a lot of confusion around this concept and, as a result, 68% of IT practitioners (DevOps, ITOps, SREs, etc.) see Observability as a tactical initiative. At the same time, 69% of business executives reported “enabling technology as a competitive advantage” as their key goal for Observability.
In order to become a key enabler of technology as a competitive advantage, organizations should deploy solutions that would enable a true Observability and are based on the following principles:
- Data-driven
- Dynamic
- In the context of business outcomes
- Customer-centric
- Holistic
- Cost effective
8 – Ability to identify the change that is causing a problem
The study shows that 66% of MTTR is spent on identifying change that is causing a problem. And yet, 67% of organizations don’t have the ability to identify change(s) in their environments that have caused performance issues. As more organizations are managing dynamic and increasingly complex environments, this has become a critical capability for managing IT performance.
9 – Aligning collaboration and workflows with business objectives
Each of the 24 areas are equally important, but the one that often gets overlooked and is a key ingredient in effective IT performance strategies speaks about the importance of aligning team, tools and processes. The study shows that improving collaboration and workflows is critical for areas such as managing innovation, focusing on high-value work and addressing performance incidents. Each of these areas are key components of using technology as a business advantage and achieving the #1 goal for managing IT performance, enabling and unique user experiences.
In order to achieve that goal, organizations should enhance their collaboration capabilities around 5 core principles:
- Proactive
- Resilience
- Continuously learning
- Data-driven
- In a business context
10 – Intelligent resource allocation
The study shows that 68% of an IT team’s time is spent on tasks that do not contribute to key business outcomes. Also, 67% of organizations do not have visibility into how their IT resources are being used. Finding the right balance between resource utilization and performance is one of the key capabilities, as organizations are losing, on average, $5.1 million annually due to an inability to find that balance. This capability comes in different flavors, as some organizations are using AI, ML and context-based automation solutions, while others are focusing on visibility into inefficiencies and data-driven decisions for improving business processes.
11 – Closing the modernization skills gap
The study found that skills gap is the #1 obstacle for adopting a cloud based approach. Additionally, organizations are losing (revenue loss and/or increased cost), on average, $13.74 million annually due to a lack of talent for modernization. The study also shows a 2.5 times increase in the number of organizations reporting that it has become more difficult to find and retain talent over the last 3 years.
Recruiting and retaining talent with the skills needed for a cloud native world could be a challenging and expensive task. To bridge the skills gap, organizations are relying on automation, ML and AI and deploying solutions for managing cloud native environments that are tailored to an existing skill set of the IT Operations teams.
Summary
As mentioned above, a solution that includes all of these capabilities hasn’t been invented yet. But, each of these capabilities individually are available to user organizations. The key for effective IT performance management is finding the right mix of capabilities that is the best fit for creating a business value. However, the study shows that identifying that combination is more difficult than ever. The best approach for putting together all of the pieces of a puzzle is starting with the big picture, meaning defining desired business outcomes and working backwards to find competencies and vendors that are the best fit for organizations’ specific goals.
