Now that the wrapping paper is all cleaned up, and the New Year’s Eve toasts are said and done, it’s time to get busy with 2023. While, just like 2022, this year is bound to have its share of surprises, there are a number of enterprise technology trends that just started to take shape last year and will be front-and-center throughout 2023.
Some of the trends will look familiar, and some are just starting to get underway:
Brace for supply chain struggles. Throughout 2023, expect businesses to continue the work that began in 2021 diversifying their supply chains in the wake of the SARS-CoV-2 pandemic. While the supply chain shift is proving challenging, continued geopolitical risks — such as those associated with the Russian-Ukraine conflict and rising uncertainty around Taiwan — make the diversification necessary.
With that in mind, companies may have moved some operations to Indonesia, Malaysia, or India, and other areas that might have provide a little more safety from a geopolitical standpoint — this has made managing the supply chain even more complex. Tim Crawford, founder of CIO research and advisory firm Avoa, contends these supply chain challenges rest largely — and will continue to rest largely — on the shoulders of CIOs.
“Supply chain success comes down to data,” says Crawford. “The costs of the supply chain may be increasing, because as you diversify you take efficiencies out of the supply chain. You have to be flexible to be able to accommodate the ebb and flow of demand, and also manage the cultural and other issues within each country to successfully export raw materials, parts, and products.”
“CIOs are in the position to understand not just what the options are, but then provide the data so businesses can make good and quick business decisions. That’s really what this is all about is, how do we quickly make good business decisions around our supply chains,” Crawford says.
2023 is the year to reign cloud costs. After years of running headlong away form on-premises and toward cloud services, enterprises are starting to feel a cloud hangover. Consider a report from anomaly detection vendor Anodot that found 49% of companies report it difficult controlling their cloud costs. With that, 53% of companies said gaining visibility into both their cloud usage and cost is their top budgeting challenge. “This notion of cloud cost control is really just starting to hit the news. I think some budget people and some CIOs feel that cloud is getting more expensive than they wanted or expected,” says Jonathan Feldman, chief information officer, Wake County, North Carolina.
According to the research firm Gartner, there’s $1.8 trillion annually in enterprise IT spend at risk of being disrupted by 2025. But that may slow as enterprises seek to get cloud costs under control. Consider another Gartner prediction: by 2024 60% of infrastructure and operations leaders would encounter public cloud cost overruns that hurt their on-premises investments.
But don’t expect firms to rush back to on-premises systems. “The genie is out of the box,” says Feldman. “The question is, how do we contain cost without going back to that old model?”
Experts expect enterprises to hit their cloud dashboards and audit their systems for redundant cloud usage, system bottlenecks, indirect costs, and perhaps compute-intensive operations that may make more sense to move back on-premises.
Expect continued global economic uncertainty. Despite all of the market prognostication on the business news networks and The Wall Street Journal, no one knows what’s going to ultimately happen with the economy in 2023. Still, as things most certainly remain uncertain, most are predicting a contraction.
CIOs are clearly bracing for uncertainty, but they’re still planning to spend. Gartner expects global enterprise technology spending to reach $4.6 trillion in 2023, up roughly 5% from 2022. “Enterprise IT spending is recession-proof as CEOs and CFOs, rather than cutting IT budgets, are increasing spending on digital business initiatives,” said John-David Lovelock, an analyst at Gartner. “Economic turbulence will change the context for technology investments, increasing spending in some areas and accelerating declines in others, but it is not projected to materially impact the overall level of enterprise technology spending,” Lovelock says.
Tighter focus on business transformation investment priorities. When Gartner asked 2,203 CIOs in 81 countries to rank their executives’ objectives technology spending for the next two years, the priorities proved to be to improve operational excellence (53%) and improve customer or citizen experience (45%). At 27%, increasing revenue came in a distant third.
The Gartner results shouldn’t come as a surprise; after all, the job of the C-suite is to not only meet the challenges of today, but be sure to prepare the organization for whatever arises three years from now. Isaac Sacolick, founder at StarCIO and author of Digital Trailblazer Essential Lessons to Jumpstart Transformation and Accelerate Your Technology Leadership, cited some important things he believes C-level technologists should do to make sure their transformation investments keep the organization positioned for the future.
The first attribute Sacolick cites is speed of adoption. “If there is a huge mountain to climb in terms of training people to just get things to work, getting things connected, then it’s all going to be a lot harder to pull off.”
That’s where proof-of-concept deployments come in. Not only do PoCs help everyone understand the ease of adoption, but also how well the system will integrate with existing systems. “For instance, even though the vendor says they do data prep or data integration with an analytics platform, and it may be true, but it also may not have the capabilities necessary.”
To ensure operational efficiency in the years ahead, Sacolick also recommends enterprises utilize low code/no code systems as much as possible. “Anybody working on technology today is probably not going to be the one supporting it two or three years down the road. You’re going to be wasting a lot of time no matter how well it’s documented, just trying to figure out what that thing does. The move to low code/no code systems helps solve a lot of those issues,” he says.
CIOs take center stage with sustainability. According to Gartner, 87% of business leaders expect to increase their organizations’ investments into sustainability over the next 24 months. That means business-technology leaders must turn to sustainable technology to help support their organization’s environmental, social, and governance ESG goals. “Infrastructure and operations has an opportunity to be a key part of enterprise sustainability efforts,” say Jeffrey Hewitt, research vice president at Gartner. “From improving the sustainability of data centers and the cloud to embracing the IT circular economy for devices, infrastructure and operations can promote sustainable technology by improving efficiency and performance of infrastructure assets.”
“The CIO is really the best person to lead ESG efforts,” adds Crawford. “When you think about governance, you’re talking about regulatory compliance, privacy and security, and sovereignty issues. But even the environmental aspects, which is an area the CIO may not directly own, is best suited to lead that conversation around environmental and sustainability. That’s because this is a data challenge, first and foremost. You have to have a solid understanding what you’re doing with your corporate data centers and with your environmental goals and your buildings and facilities within your third parties.”
“We have to think about these challenges holistically. It’s all an ecosystem. Because the choices we make around sustainability and carbon footprint flow into employee engagement, because people don’t just want a job anymore. They want a sense of belonging; they want a sense of knowing that this is a company that stands for good things,” adds Crawford.