In just a few short years, information technology has gone from tactical, to strategic, to existential in nature.
IT departments are well-accustomed to dealing with the pressure that comes with delivering and supporting the platforms and systems upon which their businesses depend. In normal times – that is, anything prior to 2020 – these pressures manifested themselves in the form of issues such as competing priorities, stretched budgets, and limited resources. Ah, the good ol’ days!
But, of course, 2020 was an altogether different year. Where once the risks of technology delays and failures resulted in competitive disadvantage, regulatory headaches, and missed opportunities, now, technology failures can mean nothing less than the end of the business as a going concern. In just a few short years, information technology has gone from tactical, to strategic, to existential in nature. Talk about pressure!
If that seems too far of a stretch, consider the following: In the first quarter of 2020, the top priorities and challenges for most businesses were things like improving customer experience, getting a handle on data, dealing with digital disruption, and continuing core modernization and digital transformation strategies. Worthy and complex priorities to be sure. However, that all changed suddenly with the pandemic. Businesses and their IT organization had to pivot quickly to the immediate technology and process triage required to keep the business alive and running when entering an office, store or customer location was no longer possible. Most companies have survived this triage – albeit some better than others – and with 2020 (but not the pandemic) behind us, it’s time to take a breath and consider what’s next.
Shift in the Thinking About Technology
First and foremost, executives and board members have to shift their thinking, closely followed by their behaviors and actions. Fortunately, the shift began a few years ago as many companies recognized the strategic nature of technology and the role it plays in advancing strategic and operational objectives. That said, it has been a slow roll for companies to parlay that shift in thinking into tangible actions – like increasing IT budgets as a fixed percentage of revenue, or focusing on the sophisticated recruiting and retention platforms and strategies required to attract and retain better IT talent, to name but a few.
Whether they like it or not, the pandemic has forced companies to accelerate their digital transformations or run the risk of not just putting themselves at a competitive disadvantage in the markets they serve, but of actually going out of business. That’s not hyperbole! That’s part of a risk equation that executives and their boards must now weigh. Without the digital ability to seamlessly deliver services, products, invoices, payments, and training, and to effectively collaborate with partners, suppliers, and service providers, companies will struggle to stay relevant and solvent.
To accomplish the above, companies need to immediately invest more money into their digital transformation efforts, and not just by a little, but by factors of two or three. This scale of shift in investment will necessitate short-term changes to current strategic plans and objectives, and will also require resetting organizational priorities and the reallocation of resources toward the digital transformation effort.
Post-COVID-19, there will be two kinds of companies. The first will be those that did not achieve digital transformation required to meet the moment. Their future will be hampered by this as a result, and they will struggle to meet customer, service, market, and financial expectations over the short and long term.
Risks and Rewards
Many companies have stopped short of taking such drastic steps because of other operational issues, marketplace pressures, or limitations on internal talent and resources. That can no longer be the case. Risk assessments – if they aren’t doing so already – must view the continuing pandemic and all of the economic and social fallout that comes with it as an existential threat to the business. Framing the risks this way provides companies with the impetus they need to double down on their IT divisions and technology service providers to drive their digital transformations across the finish line.
And those transformations will introduce several new capabilities at companies large and small, across all sectors. Besides the technology-based capabilities of seamless collaboration, improved service offerings, and better data quality, employers will optimize work-from-anywhere capabilities, create employee and other key stakeholder safety and health protocols and processes, and become increasingly holistic and predictive about the risks to their business ecosystems. Perhaps most importantly, this digital future, once fully realized, will form the bulwark businesses will need to fend off and survive future existential threats: future pandemics, competitive disruption, rapid economic, geopolitical and/or sociocultural changes, climate events, even demographic and generational attitudinal changes.
Post-COVID-19, there will be two kinds of companies. The first will be those that did not achieve digital transformation required to meet the moment. Their future will be hampered by this as a result, and they will struggle to meet customer, service, market, and financial expectations over the short and long term. The second kind of company will be much better positioned, having fully embraced the digital world by proactively transforming their organizational processes, technology platforms, customer engagement and service capabilities to take advantage of the opportunities that a post-pandemic future will offer. In either case, and for better or worse, the era of existential IT has begun.