Current state of our industry

How did we arrive at this point?

The disruptions and uncertainty of the last three years definitely played a role. The world, our customers, and our businesses are not the same as before.

Despite continued uncertainty, customers are investing in transformation. The market demand is growing. Information Communication Technology (ICT) spend is projected to outpace Gross Domestic Product (GDP) growth again this year, clearly signaling that customers are investing in digital transformation.

How did we arrive at this point?

The logic for IT investments has changed

In a down or slowing economy pre-2020, IT budgets were often among the first to get cut. We’ve started to see a shift in the ‘IT as a cost-center’ mentality.

The big learning from the pandemic: investing in technology is not a cost, but a business driver and a differentiator. Investments in IT are now part of the strategy to manage these and future challenges.

In fact, Gartner® research shows that four out of five CEOs are increasing digital technology investments to counter current economic pressures, including inflation, scarce talent and supply constraints. Source: Gartner CIO Agenda 2023 ebook, as on May 3, 2023.

Industries – automotive, hospitality and transportation – were disrupted, as new, digital-first business models focused on personalized and superior customer experiences broke through.

Now, technology advances and innovation – like IoT, 5G, AI, and machine learning– have hit a speed and scale faster than ever before. But turning innovation into value has become increasingly difficult, whilst the need for technology-driven business value increased as well.

The pandemic shifted all of this into hyperdrive.

This new logic comes with other changes

To understand the full extent of these changes, it’s important to first look at the major transformations that were happening before the pandemic.

The pace of change was accelerating well before 2020

The Internet and the technologies that followed – broadband, Web 2.0, smartphones, cloud computing, and countless others – ushered in the Age of Information – a period of about 40 years where everything became digital and more connected. The economy transformed to be built on Information Technology (IT).

Consumer buying behavior shifted with the ease of digital commerce, unlocking massive amounts of data in the process. As a result, the face of competition changed as large, data rich organizations (like Amazon or Apple) expanded their digital business models, while smaller, digital companies – often just an app – were born.

Customers are entering a new phase of transformation

We’re coming out of a phase of reacting – quick fixes to simultaneous global disruptions – driven by the pandemic, supply chain issues, and other competitive threats.

The fast progress in some areas – such as building new capabilities to work from anywhere – kept the world running. But with these capabilities came more risk: distributed workforces used their home networks to access work data, files, and applications (some authorized by IT, others not), creating more security vulnerabilities and challenges managing IT assets.

Now, as organizations move from reacting to control, the number of stakeholders influencing IT purchasing decisions has increased. Successful hybrid work strategies requires a coordinated approach across functions such as IT, human resources, and facilities – with each having different technology requirements.

Customers are recalibrating and reassessing as they look to the future and prepare

They’re asking: What is my business model for the future? How do I manage competing priorities from all of my new stakeholders/decisions makers? How can I free up capacity to focus on value vs. operations? How do I secure everything? How do I make it scalable? How do I make it simple?

Technology delivery is more complex than ever

No one has the resources (money, time, people) to master all of these technologies, while also keeping up with the rapidly changing business currents.

Widening skills gaps and rising salaries are exacerbating the issue. Cybersecurity, one of the highest paying roles in technology, has been particularly impacted. In fact, the gap in professionals needed is growing more than two times faster than the workforce itself. Source: (ISC)² Cybersecurity Workforce Study 2022