Uncertainty’ became the buzzword for many markets in 2022 and it looks like many of these challenges will remain in 2023, such as supply chain issues, the war in Ukraine, skills shortages, and the looming global recession. But what role does the CIO play in helping navigate a company through these uncertain times? Whilst economic uncertainty may force organizations to scale back on digital investments, CIOs learned some important lessons during the pandemic – especially that many organizations are now more resilient and adaptable to disruption. CIOs are no longer judged by their ability to maintain functioning IT systems. Instead, they have become leaders in shaping and driving business innovation.
According to Gartner, boards of directors are set to face the following major challenges in 2023: potential recession, long-term economic uncertainty, and long-term inflationary pressure. To cope with these challenges, CIOs should be focusing on three strategies: revolutionary work (delivering business results by creating a tech-enabled brand), responsible investment (securing cost-effective solutions that will give a return on financial and environmental sustainability), and resilient cybersecurity (protecting the intellectual property and data owned by the business). These three core areas will enable CIOs to foster sustainable growth within the business through its IT capabilites. Notably, CIOs and boards of directors have different motivators to consider going into 2023, but it will be down to the CIO to ensure that their core objectives fit with the boardroom agenda.
Businesses will need to become more agile to weather the storm, cutting costs where possible whilst not forgetting the need to innovate. In times of recession, hasty decision-making is often conducted as businesses try to alleviate any pressures that could disrupt the day-to-day running of the business. During the COVID-19 pandemic, we saw that those with agile structures and the ability to innovate were able to succeed in times of global struggle. However, it is no longer enough to just implement technology, instead, CIOs must focus on strategic changes that can be scaled for the business to use across all its operations.
WHAT ARE THE EXPECTATIONS OF CIOS IN 2023?
Digital transformation is having a profound effect on how CIOs manage their IT organization. Over the past few years, an uneven race unfolded between businesses with the pandemic dividing organizations into those who were already prepared for digital and remote working and those who weren’t. While those that fell behind tried to close this gap, leading CIOs were driving new innovations.
Now more than ever, rock-solid IT infrastructures and technological innovations that unlock value are crucial for businesses. CIOs and IT executives should focus on digital investments that deliver repeatable financial and performance results in an efficient and responsible way. According to Gartner, four out of five CEOs are increasing digital technology investments to counter current economic pressures, including inflation, scarce talent, and supply constraints. CIOs will need to govern and monitor their “business IT” in 2023, providing innovation to the end user. When control is lost, they run the risk of their infrastructure becoming “old IT” and will lose the influence once held.
OFFERING TRANSPARENCY TO ADDRESS BOARD ROOM CHALLENGES
Where there is a lack of transparency available to drive fact-based decisions, there is less accuracy regarding the outcomes.
Ensuring businesses are aware of their overheads and what their customers want is key to any business but especially in times of potential financial difficulty. Cloud usage increased massively during the pandemic, thanks to the flexibility, scalability, and speed of deployment needed to pivot business operations. Cloud solutions also offer a more sustainable system to those previously in place, allowing businesses to go that little bit further when it comes to their carbon footprint. However, as there is no one business holding a monopoly on this, the number of suppliers is growing, pushing the value of the product down. So, businesses will need to work harder to justify their investments as well as facing the likely prospect of doing more, with less.
In 2023, CIOs should take into consideration all the challenges facing their industry right now and put their cards on the table. Ensuring transparency with both sales and management staff will enable a joint focus to make important business decisions. Along with this, they should expect increasing pressure to reduce costs and possibly even put long-term plans on hold. With businesses attempting to reduce costs in 2023, they should seek to devise alternative cost management systems to ensure minimal disruption is felt within the business.
RUN, BUT DON’T FORGET TO INNOVATE
There is going to be the need for a lot of focus on transparency in 2023, encouraging leaders to discuss the value of IT with their peers. Embracing Technology Business Management (TBM) via the Serviceware Digital Value Model (DVM) to understand the total cost of ownership (TCO) and enable discussions between CIOs and their business peers,) to drive the fact-based decisions will be pivotal. Business leaders should be striving to create a clear understanding of their company’s Run vs. Innovate model. Based on our experience over the last year, most customers operate on the 80:20 model, aspiring to reach the 70:30 model (with the industry, the goal would be to reach the 60:40 model).
THE IMPORTANCE OF COMPROMISE: ALIGNING CI AND BOARD ROOM FOCUS
As we prepare for another uncertain year, it is important for CIOs to remember they need to work with, and not against the board to meet the overarching goals of the business. Although providing transparency is often easier said than done, striving for compromise in times of struggle will help to keep long-term plans on track.