from Dr. Alexander Becker, Chief Operating Officer at Serviceware SE
The year 2022 was marked by uncertainty in many places. The Ukraine war, the associated supply chain bottlenecks and rising energy costs, as well as the threat of global recession, weighed heavily on the markets. An easing of the situation is still a long way off in the coming year. While many organizations are now more resilient and adaptable than before the COVID-19 pandemic, times remain challenging for IT leaders.
According to Gartner, the potential recession, ongoing economic uncertainty and increased inflationary pressure will dominate corporate agendas this year [1]. To meet these challenges, companies should focus on responsible investments that are both financially and environmentally sustainable. Innovation through IT, which runs through all areas of work across departments, must not be neglected in the course of this. Because this contributes to positive business results by driving the change towards a fully technology-supported company. Last but not least, the establishment of robust cyber security is essential in order to be able to guarantee the protection of the company’s intellectual property and sensitive data.
These three core areas enable managers to promote sustainable growth through existing IT skills. However, companies must also be careful to balance the interests of the corporate board with their own innovation goals to ensure that the company is properly prepared for the new year.
The expectations of CIOs are high
The Ukraine war, the corona pandemic and the raw materials and energy crisis have shown how crucial flexible structures and the ability to innovate are for the continued existence and success of companies. Those who had previously offered the option to work remotely were able to quickly focus on and drive new innovation while others struggled to keep the business running.
This clearly shows that solid IT infrastructures and value-adding technological innovations are more important than ever for companies. According to Gartner, four out of five CEOs plan to increase their investments in digital technologies in 2023 in order to be prepared for future challenges [2]. However, implementing technologies is no longer enough. IT leaders should have a particular focus on digital investments that efficiently manage to deliver repeatable and accountable financial and performance outcomes. Anyone who saves at this point and sticks with outdated IT structures runs the risk of losing touch and thus losing their market position.
The importance of transparent cost management
Transparency is particularly important when fact-based decisions are to be made. CIOs must identify current hurdles and challenges in the industry and include them in their decisions. This is the only way to achieve cross-departmental alignment when making important business-related decisions. At the same time, the increasing cost pressure must not be ignored if long-term plans are to be implemented. If companies want to focus on cost reduction this year, it is advisable to first develop alternative cost management systems that cause minimal disruption to business operations.
Investments in IT secure future existence
Technology Business Management (TBM) is of central importance for the effective and efficient control of IT investments. TBM provides a broad taxonomy and levels of action to determine business value in a comparable and consistent manner. Software models that are not based on a unified model are helpful for starting with the status quo of a company’s data and process realities. Based on this, CIOs and their management team can make fact-based decisions together with the business. The understanding of the Total Cost of Ownership (TCO) is a central control tool to gain the value of IT. By analyzing the TCO, sustainable savings potential for IT costs can be identified and implemented. A discussion about the consumption of IT services and their equivalent value also enables the targeted focus of investments on services that are really necessary and add value. This enables managers within their company to better understand the relationship between “Run vs. Innovate”. [3]which today is often 80/20, towards more innovation, ideally 60/40.
The focus is on innovations and strategic changes
2023 will not be an easy year for the economy either. In order to master current and upcoming challenges, it is therefore important that companies now become more agile and resilient and at the same time reduce their costs. It will be the task of the CIOs to navigate their company with skill and understanding. They must drive strategic change that is measurable for the organization and can be deployed across multiple business units. Because innovations, investments in the future and transparent action will be decisive for the long-term success of companies.
[1] https://www.gartner.com/en/conferences/emea/symposium-spain/agenda/day
[2] https://emtemp.gcom.cloud/ngw/globalassets/intl-gb/information-technology/documents/cio-agenda-23-uk.pdf
[3] https://702010institute.com/702010-model/