We’ve seen IT titans collapse this year owing to mismanagement, recklessness, economic hardship, a lack of innovation, or a mix of unforeseeable causes. At the same time, new leaders have emerged: businesses that have seen an opportunity in our environment of eternal uncertainty, grabbing the chance, and taking a risk to go forward.
The digital environment of today necessitates awareness. Not only must tech executives prepare their teams and organizations for disruption, but they must also guarantee that their products and services are nimble enough to embrace the unforeseen changes that lie ahead. Not alone are global, existential issues driving change; IT executives must also handle new regulatory challenges, unknown cyber-threats, a rising IT skills gap, frenzied emerging technology hype, and more.
Here are five pieces of advice that the tech world has learned this year about disruption, innovation, and constant change, and the takeaways for managers to drive growth through a transformation in the year ahead.
Economic uncertainty demands strategic digital investment.
Inflation and recessionary economic circumstances are posing problems for businesses all around the world. In a down or declining economy, common wisdom suggests decreasing expenditures, especially technology spending. Nonetheless, Gartner estimates suggest that IT spending will continue to rise (although dampened by inflation), with tech spending expected to climb by more than 5% in 2023. Because technology is so firmly embedded in the global economy, it must play a role in responding to economic volatility, potential recession, and recovery. When IT was exclusively “back office,” it was an expense that could be reduced. IT now provides both efficiency and income and cannot be reduced without negatively impacting company performance.
That is not to argue that managers should relax and enjoy the security of a predictable budget. Economic pressure increases the need and urgency to realize time-to-value for digital investments, and CEOs continue to seek higher returns on technology expenditures. The current economic climate presents an opportunity for firms to strategically invest in digital solutions. As the receivers of substantial technology spending, managers must guarantee that strategic technology deployments optimize company returns.
For example, automating finance processes to facilitate fast and accurate data analysis can support the business in making sound financial decisions during times of uncertainty. Migrating to cloud-based infrastructure services and cloud-native applications can drive better IT costs and operational efficiency. The expansion of citizen development initiatives with no-code or low-code tools can support agility and speed across departments. Within all business functions, consider opportunities to use technology to reshape revenue streams, change cash flow, or create new value propositions. Through strategic digitalization, managers can help their enterprise to emerge from economic disruption stronger, leaner, and more innovative.
Labor market volatility inhibits innovation.
Managers in the technology industry are no strangers to labor market instability. From the Great Resignation of 2021 and beyond to enormous layoffs at digital behemoths that have dominated news headlines in recent months, the IT workforce appears to be in continual flux. Employees continue to abandon their jobs due to burnout and dissatisfaction. Managers struggle to acquire critical tech talent, but if they do, continuously rising tech wage expectations place a pressure on budgets and can lead to layoffs. Continuous disruption is incompatible with innovation. According to Gartner researchers, labor instability will cause 40% of firms to suffer a meaningful economic loss by 2025, prompting a shift in personnel strategy from acquisition to resilience. In other words, talent retention is becoming as critical as profit margins or customer retention on the balance sheet.
The organizations that we see solving the talent volatility problem do so by looking for technical talent that is likely to stick around instead of continuing to seek out “unicorns.” Rather than fixate on technical wizardry, they look for people with the baseline skills they need, who are interested in business operations. Employees who will stay at the organization for five years (or more) stand to generate far more business value than high-flying superstars who might move on to their next job within 18 months. Hiring and retaining the right talent also creates a virtuous cycle, as top talent desires to work for organizations that are innovative. In a recent Gartner survey, more than 50% of employees reported a desire to contribute to meaningful work that drives change.
In 2023, IT managers must employ long-term value creation and staying power. Look for applicants that want to learn about the business and make a difference, who are eager to learn new skills, and who are resilient and flexible enough to develop with the firm and modify their function in response to a changing business climate. Offer a value proposition that fosters retention at the same time. Prioritize key aspects for top personnel, such as competitive remuneration, the chance to contribute to meaningful work, and employment flexibility.
Sustainability must be a top tech priority.
At COP27, U.N. Secretary-General António Guterres stated that “we are on a highway to climate hell.” As political solutions to climate change continue to look murky, the tech industry will play a key role in addressing the global climate crisis.
IT has a huge impact on organizations’ carbon footprints. The embodied carbon of laptops, cell phones and countless other devices used across enterprises contributes significantly to enterprises’ greenhouse gas emissions. Technologies like cloud and artificial intelligence (AI) consume colossal amounts of energy, which only serves to increase as such technologies gain computing power. In fact, Gartner predicts that by 2025, without sustainable AI practices, AI will consume more energy than the human workforce.
Yet, paradoxically, it is the application of these technologies that will identify sustainable business opportunities and drive enterprise sustainability efforts. The IT circular economy is growing, as executives show interest in reducing, reusing, and recycling PCs, mobile devices, and other electronic equipment. Sustainable AI practices have emerged, such as the use of specialized hardware to reduce energy consumption, energy-efficient coding, transfer learning, small data techniques, federated learning, and more. Hyperscale cloud service providers are leading the IT industry on environmental sustainability and running their facilities with world-class energy effectiveness and carbon-neutral operations due to growing customer demand, public reputation, investor attraction, energy costs, and regulatory policies.
A recent Gartner survey found that 87% of business leaders expect to increase their organization’s investment in sustainability over the next two years. That same survey found that 86% of business leaders see sustainability as an investment that protects their organization from disruption. Additionally, 83% said sustainability activities have directly created both short- and long-term value for their organization, and 80% indicated that sustainability has helped their organization optimize and reduce costs. Sustainability investment offers a “two for one” by supporting responsible consumption while simultaneously benefiting the business. Tech can be the driving force behind these efforts.
Organizations need a new sustainable technology framework that increases the energy and material efficiency of IT services, enables enterprise sustainability through technologies like traceability, analytics, renewable energy, and AI, and deploys IT solutions to help customers achieve their own sustainability goals. Managers should lead the charge by championing technology-led sustainability solutions and practices within their teams.