There is no doubt that 2023 is off to an uncertain start. However, despite the economic headwinds we expect that some areas of technology will see continued growth. In fact, from our conversations with business and technology leaders, it appears that many organisations will take the opportunity to right-size their businesses, remove excess fat and waste, and accelerate their transformation efforts. The plan is to emerge from a global slowdown – leaner, smarter and better.
Where there is an opportunity to automate organisations will take it – and technology spend will trump people spend in 2023.
But it won’t all be smooth sailing as technology buyers become more discerning than ever and manage costs closely.
Here is what tech providers should focus on to remain resilient in these uncertain times.
- Be prepared to work harder – especially cloud and SaaS providers
- Help customers optimise costs
- Accelerate innovation to stay ahead of M&A activity
- Employ security to manage risk
- Prepare for product-led growth
Read on to find out why.
Download Be Alert – Not Alarmed: Analyst Guidance for Tech Providers as a PDF
As the leader of the tech team, CIOs are working through many different strategies and initiatives to drive new digital initiatives and improve existing ones. They are often pulled into new initiatives by business leaders and have to make hard decisions on how to support a business that is increasingly digitalised.
But there are five initiatives that all CIOs should have on their list for 2022 as they will deliver impactful results quickly and will make future investments more manageable and reliable.
In 2022, these 3 technology investments will give you a fast start:
- AIOps. This will be an easy business case to build if you evaluate the benefits
- Hybrid Cloud Management. Even if your business is racing towards the public cloud, you will have some hybrid cloud services.
- Federated Data Management. Because your infrastructure and applications will be hybrid, your data needs to be too.
These strategic initiatives will also be crucial this year:
- Resolve technical debt. Improve architectures and increase agility.
- Improve Talent Recruitment and Employee Retention. Be aware that the “great resignation” is a reality
Click here to download 5 IT Initiatives to Jumpstart Your Digital Business in 2022 as a PDF.
Last week Zoom announced a USD 100 million Zoom Apps Fund to promote the development of Zoom’s ecosystem of Zoom applications, integrations, video, developer tools, and hardware.
As part of Zoom Apps Fund, the company will invest in a portfolio of companies that are promoting and innovating on Zoom’s video conferencing platform. The portfolio companies will receive initial investments between USD 250,000 and USD 2.5 million to build solutions. To support the practice, Zoom is providing its tools and expertise to various start-ups, entrepreneurs, and industry players to build applications and integrate Zoom’s functionality and native interface in their products.
In March, Zoom introduced an SDK designed to help programmers embed Zoom functionality inside their applications. Zoom SDK is a component of Zoom Developer platform which includes SDKs, APIs, webhooks, chatbots, and distribution for applications and integration. Last year Zoom launched Zoom Apps and Zoom Marketplace at its Zoomtopia virtual conference to bring applications and productivity into the Zoom experience.
Zoom is not alone in evolving their Unified communications as a service (UCaaS) capabilities and market. Tencent rolled out their video conferencing solution for the global market, Facebook expanded their offerings in videoconferencing applications through the integration of new features, Google announced a series of upgrades and innovations to better support the flexibility needs of frontline and remote workers in Google Workspaces, and Microsoft introduced Viva that aims to bring together communications, knowledge, learning, resources, and insights together.
“Ecosystm research shows that 50% of organisations will continue to increase use of collaboration platforms and tools in 2021. However, if videoconferencing remains just a tool to log in to for meetings without purpose-built workflows and functionality that suit worker profiles, then it will start losing its attractiveness. Vendors need to work on user interface, UX, the lighting, security, audio quality and many other aspects that draws users to the platform.
The big question is what next for videoconferencing vendors? How can engineering teams innovate to build the capabilities organisations want when they use drawing tools, share images, have chats and discussions within collaboration platforms? How do you make the experience real so employees can “live and breathe” in the environment?
Zoom investing in understanding what apps and workflows are suited for a particular vertical or business is fundamental to the future of video and collaboration and will be a big game changer.”
“Zoom is continuing to expand the markets in which they operate and investing in start-ups increases their opportunities to grow as a platform. Their App Marketplace already offers a rich source of innovations, with Zoom themselves appearing to develop integration with market leaders such as Salesforce and HubSpot in the CRM category. This has led to Zoom integrations in close to 80 CRM products – including integrations developed in-house by Salesforce and HubSpot to supplement Zoom capabilities.
They are promoting an open web and audio-conferencing platform that does not limit users to the walled-garden approach of competitors such as Microsoft Teams.
Zoom’s strategy creates the opportunity for CIOs to access a widely used, rich functionality, digital collaboration channel – one they can integrate seamlessly into their existing digital channels knowing that their customers are likely to be highly familiar with the user experience.”
Get more insights on the impact of the COVID-19 pandemic and technology areas that will see innovations, as organisations get into the recovery phase.
Over the next few months, we’re going to be focusing on the five stages of the Digital Value Journey and how an organisation and a leadership team can progress through these stages.
The Journey starts with baselining and then improving your execution capability.
Your Foundation
The quality of your execution needs to be consistently improved as you and your organisation make progress through your Journey. At the start, it is about developing the foundation on which you can build more complex and valuable business capabilities. You need that reliable, performing foundation that delivers what your customers and employees need every day.
For any Digital or IT organisation to succeed, it needs two critical things: a record of consistent success, and the trust from your organisation that past performance is a reliable predictor of the future.
Every day your customers and employees will be evaluating those two things. It’s like sitting a difficult exam every day. Failing one will be remembered – much more so than all the other exams that you successfully passed. To pass that exam you need to clearly understand what people are testing you on every day.
Understanding how the quality of your work will be evaluated is essential to creating and maintaining this firm foundation. Everything you do later in the Journey will depend on the foundation you establish at the start.
Evaluating your Foundation
And you don’t have the freedom to choose how that foundation is going to be evaluated. There is a universe – or perhaps that should be a multiverse – of metrics that you could use. Selecting the small set of metrics that your stakeholders believe demonstrate your performance is essential.
Too many metrics is just as bad as too few – you won’t know which ones to focus on so you will end up spreading yourself too thinly. Your stakeholders are the best people to tell you how to measure your performance. Work with them to determine the one or two indicators that they really care about.
Schools and universities have improved dramatically in explaining how they are going to evaluate a student’s performance since I attended! As part of almost every assignment, educators include an evaluation rubric to guide each student. This sets out what how the educator will assess the students work. So, getting great grades is dependent on understanding this rubric.
What is your rubric? Without one how will you know what outcomes your stakeholders value and how they will evaluate your work? Spending time to talk with your stakeholders about what they value, is a habit that is worth developing early and maintaining throughout the Journey.
Your Next Best Steps
Getting this execution foundation right is the basis for everything that follows.
In the first of a series of webinars on 22 April, we will be introducing the concepts and ideas that we will expand on over the series.
Getting a quality education is a long hard slog – and I can’t promise that starting this Digital Journey will be any different. At each stage of the Journey different levels of capability will be required, but, as with an education, these higher levels of capability will only be possible if the right foundation is in place. So, join us to see how you can use the Digital Value Journey to lift the performance of your organisation and its Digital or IT Team.
How do digital leaders shift from providing a cost-focused to a value-focused service? At the CXO Digital Leaders Dialogue series, together with Best Case Scenario, we will be in discussion with leaders who will share their experiences with navigating these challenges.
To learn more, or to register to attend, visit here
CEOs have an active role to play in an organisation’s transformation needs and journey – including in the technology decisions. Last month we spoke about why CEOs should get involved in their organisation’s IoT investments. Now, we look at Cloud – which has been a part of the CIO’s purview so far. Under the current circumstances, most organisations are actively pushing to go digital and the internal discussions will often revolve around empowering remote employees and digital customers. All the technologies that are being evaluated by organisations today have Cloud as their pillar. Increasingly, we see organisations adopt the hybrid and the multi-cloud. And organisations may not have the capabilities – technological and skills – to support the complexity of their Cloud environment. While a CEO does not have to understand the technology fully, it is important to understand the business impact of the technology.
Why should a CEO get involved in and have visibility into an organisation’s Cloud investments? There are a few important reasons.
#1 Cloud is not a cost-saving measure – it will enable you to transform
Organisations have matured in their Cloud adoption and no longer evaluate the benefits of Cloud only in terms of shifting CapEx to OpEx. If we look at the benefits of Cloud adoption, reduction of IT costs is not even in the top 3 benefits that organisations are seeking from Cloud anymore. Operational efficiency and collaboration emerge as key benefits (Figure 1) – while some companies still move to the Cloud for the savings, they stay there for other benefits.
This requires organisations to think of Cloud as a technology empowering their infrastructure and services. Cloud acts as an enabler for ease of doing business, real-time data access for productivity increase, and process automation. This impacts the entire organisation. It also involves prioritising the needs of certain functions over others – definitely not what a CIO should have to do.
If we look at just Cloud storage as an example, organisations can no longer have individual functions and their associated shadow IT teams having their own Cloud storage (and collaboration). This often turns out to be more expensive and there is a lack of consolidated view and management. While organisations forge ahead with the dream of having real-time information sharing across functions, a CIO has to consider the entire organisation’s technological and business needs – a CEO is the best person to guide the CIO in translating the organisation’s vision into IT priorities.
#2 In fact Cloud adoption may not cut costs at all!
Organisations are also re-evaluating the cost benefits of Cloud. Investing in a Cloud infrastructure with a short-term view on the investments involved has led to instances of Cloud solutions being brought back in-house because of rising costs. While security, data privacy and integration remain the key challenges of Cloud adoption (Figure 2), over a third of the organisations find Cloud more expensive than traditional licensing or owning the hardware.
Organisations find that the cost considerations do not stop after the adoption or migration. As businesses use Cloud to scale, there are several aspects that require constant re-evaluation and often further investments – cybersecurity measures, continuous data protection (CDP), disaster recovery management, rightsizing capacity, software and database licenses and day-to-day maintenance, to name a few. In addition to this, the cost of finding and recruiting a team of professionals to manage and maintain the Cloud environment also adds up to the OpEx.
If the CIO is talking about a Cloud migration for cost benefits only, the CEO and the CFO need to step in to evaluate that all factors have been taken into consideration. Moreover, the CIO may not have full visibility of how and where the organisation is looking to scale up or down. It is the CEO’s responsibility to share that vision with the CIO to guide Cloud investments.
#3 Cloud will increasingly be part of all tech adoption considerations
In this disruptive world, CEOs should explore possibilities and understand the technical capabilities which can give organisations an edge over their competitors. It is then up to the CIOs to implement that vision with this larger context in mind. As organisations look to leverage emerging technologies, organisations will adopt Cloud to optimise their resources and workloads.
AI is changing the way organisations need to store, process and analyse the data to derive useful insights and decision-making practices. This is pushing the adoption of Cloud, even in the most conservative organisations. Cloud is no longer only required for infrastructure and back-up – but actually improving business processes, by enabling real-time data and systems access. Similarly, IoT devices will grow exponentially. Today, data is already going into the Cloud and data centres on a real-time basis from sensors and automated devices. However, as these devices become bi-directional, decisions will need to be made in real-time as well. Edge Computing will be essential in this intelligent and automated world. Cloud platform vendors are building on their edge solutions and tech buyers are increasingly getting interested in the Edge allowing better decision-making through machine learning and AI.
In view of the recent global crisis, we will see a sharp uptake of Cloud solutions across tech areas. IaaS will remain the key area of focus in the near future, especially Desktop-as-as-Service. Organisations will also look to evaluate more SaaS solutions, in order to empower a mobile and remote workforce. This will allow the workforce of the future to stay connected, informed and make more decisions. More than ever, CEOs have to drive business growth with innovative products and services – not understanding the capabilities and challenges of Cloud adoption and the advancements in the technology can be a serious handicap for CEOs.
#4 Your IT Team may be more complacent about Cloud security than you think
Another domain that requires the CEO’s attention is cybersecurity. The Cloud is used for computing operations and to store data including, intellectual property rights, financial information, employee details and other sensitive data. Cybersecurity breaches have immense financial and reputational implications and IT Teams cannot solely be responsible for it. Cybersecurity has become a Board-level conversation and many organisations are employing a Chief Information Security Officer (CISO) who reports directly into the CEO. Cybersecurity is an aspect of an organisation’s risk management program.
Evaluating the security features of the Cloud offerings, therefore, becomes an important aspect of an IT decision-maker’s job. While security remains a key concern when it comes to Cloud adoption, Cloud is often regarded as a more secure option than on-premise. Cloud providers have dedicated security focus, constantly upgrade their security capabilities in response to newer threats and evolve their partner ecosystem. There is also better traceability with the Cloud as every virtual activity can be tracked, monitored, and logged. Ecosystm research finds that more than 40% of IT decision-makers think the Public Cloud has enough security measures and does not need complementing (Figure 3).
However, the Cloud is as secure as an organisation makes it. The perception that there is no need to supplement Public Cloud security features can have disastrous outcomes. It is important to supplement the Cloud provider’s security with event-driven security measures within an organisation’s applications and cloud interface.
It is the job of the CEO – through the CISO – to evaluate how cyber ready the IT Team really is. Do they know enough about shared responsibility? Do they have full cognizance of the SLAs of their Cloud providers? Do they have sufficient internal cybersecurity skills? Do they understand that data breaches can have cost and reputational impacts? As cybersecurity breaches begin to have more financial implications than ever and can derail an organisation, a CEO should have visibility of the risks of the organisation’s Cloud adoption.
Cloud is no longer just a technological decision – it is a business decision and takes into account the organisation’s vision. A full visibility of the Cloud roadmap – including the pitfalls, the risks and the immense potential – will empower a CEO immensely.
Have you noticed how IT shops are changing? ANZ Bank, BankWest, William Hill, REA, Sportsbet and many other organisations are restructuring their technology function – moving many of the functions that impact the product or customer experiences into the teams that are responsible for that product or the customer experience. These business restructures often go well beyond an IT change – it is usually about putting all of the resources that can impact the customer outcome into the same team in order to be able to drive change at pace. Some take it even beyond the customer and product teams, and move HRM to the Employee Experience team, ERP to the Finance team, CRM to the sales/marketing team/s etc.
So the question needs to be asked – if most of your IT team has been moved to the business teams, what is the role of the CIO? And the answer to that question, most of the time is “there is no role for a CIO”… In fact, many businesses that have made this move no longer have a CIO. When REA made the change, their CIO became the Chief Inventor; when William Hill combined IT and Product, the CIO effectively became the head of products.
But this doesn’t mean there is no role for the CIO – some will see the opportunity to embrace their technical side and become a “Chief Engineer” – as many businesses will maintain some technical capability in house. Some will become the head of Employee Technologies – your information and other workers will still need end-user computing devices, tech support etc. A potential pit stop role will be head of Digital as some companies are giving the responsibility to drive digital transformation to a senior executive (but as mentioned this role is just a pit stop as being digital quickly becomes everyone’s responsibility – not just that of a senior executive!). Some will embrace their passion for innovation and lead the big changes that the business will need to face, and others will step up to a senior management role within the business – possibly managing change, implementing automation, or another new competency required of the business.
So as a CIO you need to start mapping your future journey – when will your company or department embrace the “fast & innovative” approach to business and restructure around products or the customer (some call it the “Spotify model”, others the “software model” – but either way it is about being able to deliver customer value at pace)? What will your role be in the transition? And what will your job look like after the change? I recommend you drive this change and become a master of your own destiny – I know some who CIOs who had this change forced upon them, and it did not end well for them.
I have helped CIOs and their teams with this transition so please reach out if you are interested in having Ecosystm help your business become fast and innovative in order to drive better customer outcomes, and help your CIO and IT team to create a new digital-ready future.