“Spurred on by the world reaction to the disruptions caused by the global pandemic in 2020, the global economy remains on its way to its digital destiny, as most products and services are based on a digital delivery model or require digital augmentation to remain competitive,” said a recently published IDC study on the key trends that will shape the IT industry over the next five years.
IDC’s overriding conclusion is that the Covid-19 pandemic will significantly accelerate the digitalization of the global economy “The majority, 65%, of global GDP will be digitalized by 2022, driving $6.8 trillion of IT spending from 2020 to 2023.”
The study highlights ten predictions that will drive the IT industry in the post-pandemic new normal, including the challenges faced by CIOs and IT professional as they manage the implications to their institutions over the next five years. Let me summarize IDC’s top ten predictions.
1. The shift to cloud accelerates. 80% of enterprises will accelerate their shift to cloud-centric infrastructures, applications and data services by the end of 2021,- twice as fast as pre-pandemic, - in order to improve their overall responsiveness, scalability, and resiliency. Beyond datacenters, the adoption of cloud must also include cloud-based services to enhance customer experiences, automate business processes, embed intelligence into enterprise operations, and other key business areas. “Optimizing clouds will determine the pace and direction of technology introductions for infrastructure, applications, and data services.”
2. Edge locations become a top priority. Distributed workforce and business practices during the pandemic required an increased focus on the deployment of operations and IT resources to dispersed locations. These changes affected most industries, but were particularly critical for hospitals, factories, and transportation hubs. Emerging technologies, - such as Internet of Things, AI applications, robotics, 3D printing, and augmented/virtual reality, - will have an impact on the deployment of distributed operations and IT resources. “The need to deliver infrastructure, application, and data resources to edge locations will spur adoption of new, cloud-centric edge and network solutions.”
3. The hybrid digital workforce. By 2023, 75% of the global 2000 (G2000) companies will support a workforce that is hybrid by design, enabling them to work together in real time with their preferred device whether local, remote, in the field, or switching between locations. “The workspace will provide a personalized and federated view of the resources that workers require to get their jobs done, including access to subject matter experts and other collaborators. Hence applications that enable real-time collaboration across all environments are critical to its effectiveness and success… The result will be a more collaborative, informed, and productive workforce.”
4. The pandemics “technical debt”. The pandemic forced companies to shortcut normal IT protocols to get digital solutions in place in days and weeks, sometimes literally overnight. While this enabled companies to deal with their immediate crisis, they created a so-called technical debt that is, “infrastructure and systems that aren't as robust, flexible, and scalable as normal IT solutions would be and which will need to be dealt with when the current pandemic crisis passes.” If not properly dealt with, technical debt will continue to grow and become an untenable drag on IT operations and innovation. Instead of just identifying and correcting technical debt problems, CIOS “should look for opportunities to design next-generation digital platforms that modernize and rationalize infrastructure and applications.”
5. Resilience is central in the new normal. Companies are facing many challenges, including massive shifts to remote work, unpredictable business closures, and radical changes in the wants, needs and behaviors of their customers. These changes are bringing into question traditional approaches to business and IT resilience, - the ability to rapidly respond to disruptions and make decisions in the face of great uncertainty. In 2022, enterprises focused on digital resilience will adapt to disruptions and respond to new conditions 50% faster that those fixated on traditional approaches to business continuity and IT recovery.
6. The emergence of autonomous IT operations. A transition is underway for IT and business processes. Instead of relying solely on their siloed IT assets and processes, enterprises will start relying on automated solutions built on adaptive self-regulating, cloud-centric platforms. We can expect the emergence of cloud ecosystems for IT and business automation by 2023. “Achieving these objectives requires aggressive integration of proactive AI/ML-powered analytics, adoption of policy-driven automation, and greater use of low-code, serverless workflows to enable consistent self- driving IT, business, and even industry-wide automation.”
7. Accelerated investments in AI/ML. An increasing number of organizations are already benefitting from their investments in AI/ML and advanced analytics. “Across industries, organizations have come to market with AI-infused healthcare, physical asset management, fraud prevention, customer service, pharmaceutical research, entertainment, and other offerings.” By 2023, we can expect that one-quarter of G2000 companies will acquire at least one AI software start-up to get access to skills and IP.
8. Relationships Are Being Reevaluated. The acceleration of digital transformations triggered by COVID-19 is causing companies to reevaluate their relationships with technology and service providers given the major transitions taking place in the overall IT ecosystem. Becoming a digital business requires a shift from traditional, firm-centric linear processes toward platform-based, data-driven value chains that are part of an external partner ecosystem. To better execute their new digital strategies and business models, 80% of enterprises will overhaul their relationship with suppliers, provides and business partners by 2024.
9. Sustainability becomes an important factor. “The ability to build and sustain awareness for a company's brand and attract investors and talent for an organization hinges upon the ability to demonstrate progress on environmental sustainability goals. As organizations create a strategy for progress, IT organizations have a critical role in finding new ways to innovate and leverage technology to improve efficiency and reduce waste.” By 2025, 90% of G2000 companies will mandate reusable materials in IT hardware, carbon neutrality targets for service providers and lower energy use from all their partners.
10. Talent and leadership are critical. Through 2023, half of enterprises’ hybrid workforce, business automation, and other transformation efforts will be delayed or will fail due to a shortage of IT and analytics talent with the right skills. The leadership team must create a shared vision and a clearly articulated business strategy that everybody understands and stands behind. “CIOs have a unique opportunity to help their enterprise mature by leading cross-organizational initiatives, educating about technology, and developing digital infrastructure, but only if they can ensure that their teams are and continue to effectively engage with LOB teams to support enterprise initiatives.”
To succeed in this period of rapid change, IDC recommends that companies focus their IT efforts on three key areas over the next five years:
- Accelerate transformation: “Identify and act on areas where the crisis and enterprise responses are accelerating existing IT trends in areas such as cloud and edge-centric work.”
- Remediate and adapt: “Identify shortcomings in existing IT environments such as decision support systems, remote work, and business/IT resiliency as well as addressing shortcomings in areas such as connectivity/security introduced during initial emergency responses.”
- Opportunistic extension: “Leverage technologies such as cloud-based automation platforms, AI-enabled automation processes, ‘digital coworker’ augmentation to make it possible to take advantage of competitive/industry disruptions and extend capabilities for business acceleration in the next normal.”
Because so many products--things--are being digitized, world trade is changing. Instead of books we have e-books, instead of CDs of music, we have downloads. EV's don't have transmissions, gears, or engines, so they can be made locally, take up less materials, and are becoming an information play. Shell is getting out of the oil business, GM announced that it is getting out of the internal combustion engine car business. SW and info are the new industrial formats. Sell your container vessels and log onto Viking TV instead of booking cruises. Irvington B-W has this one right.
Posted by: James W. Cortada | February 12, 2021 at 05:44 PM