In April 2020, right after the world had undergone an abrupt shift, Microsoft CEO Satya Nadella delivered his first earnings report in the COVID-19 era.
“We’ve seen two years’ worth of digital transformation in two months,” Nadella said.
If anything, he was underselling the change.
A McKinsey study later in 2020 revealed that the pandemic-forced digital transformation was even more seismic: “companies have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by three to four years.”
The transformation has been multi-layered, from simple things like adopting new internal communication and collaboration tools to altering the way a company stays secure – like switching to cloud-based solutions.
These new tools and technologies have helped companies achieve new levels of collaboration and productivity. But now that you have a chance to step back and look at your company’s environment, it’s time to revisit what you have and what you need, with an eye toward controlling costs and improving security.
Here’s how you should approach this appraisal and what you should keep in mind to keep up the momentum of the pandemic transformation.
Should I go with multiple point solutions, or would my company benefit from taking a one-platform approach?
While this debate certainly isn’t new, it’s more pertinent in our current hybrid work environment.
There are, of course, pros and cons to both approaches.
Having more options at your disposal doesn’t necessarily mean it’s an improvement. Using various tools and applications across your company means taking on more complexity, risk, and sometimes more cost.
In many cases, having multiple point solutions in place will cost you more than going with a platform approach, sometimes at a 2-to-1 ratio.
However, there’s a barrier to making this change. If you’re locked into a contract with, say, a video conferencing platform like Zoom, switching to Microsoft Teams to consolidate your internal and external communications may not be that simple.
Even if now isn’t the time to change, it’s the time to think ahead. Even if a platform approach doesn’t make sense right now because you need best-in-breed tools and adoption, you can time contracts so you get an opportunity to consolidate in the future. The one exception is security: Taking a platform approach is better since it reduces complexity and the attack surface.
Evaluate what you have, strategically look at where replacements are going to come in, and start to move on that continuum.
The next step in our digital revolution at work will be based on loosely coupled applications with tight API integration.
Companies now have data that lives with multiple third party companies, and they need to bring that data together through APIs and services.
There’s some inherent risk in a decentralized model because you’re no longer managing your data in one place. But you’re also contractually shifting some of the risk to a third party who has responsibility for securing and protecting the data.
Right now, we’re seeing a budget boom.
According to Gartner, worldwide IT spending is projected to total $4.5 trillion in 2022, an increase of 5.5% from 2021. It’s the largest one-year increase in more than a decade and the highest since the 3% growth in 2018.
“Digital tech initiatives remain a top strategic business priority for companies as they continue to reinvent the future of work, focusing spending on making their infrastructure bulletproof and accommodating increasingly complex hybrid work for employees going into 2022,” Gartner’s research vice president said.
As technology becomes more integral to your company’s overall business strategy, you need to invest in that strategy to stay relevant.
But how much longer will IT budgets keep growing? It will depend on an individual company’s needs, of course, but more investment could mean more payoff.
According to Gartner, CIOs and technology executives at businesses that consider themselves to be highly modular and adaptable expect next year’s revenue to increase by 7.7% on average. Meanwhile, organizations that don’t consider themselves as highly adaptable expect an increase of 3.4%.
Many companies have invested millions of dollars over the years to build, renovate, buy, or rent modern office spaces to attract younger, more sophisticated employees.
The 2010s featured trendy modern office spaces with beer fridges, collaboration spaces, lots of glass and other features that made coming to the office a little more fun.
Now, it’s more attractive to the average worker to be able to work from home at least part of the time. In a poof, real estate investments made by many went up in smoke.
While some companies are certainly going to feel like they’ve wasted money on office space, the savings in the long run will open doors for investments in other areas. One is building relationships among employees, without the help of bringing them together in an office building.
This is where the technology evolution takes off. There’s going to be a need for greater use of augmented and virtual reality in ways that facilitate conversation among employees. The need for human contact is going to be something that finds its way into the boardroom as a discussion topic.
For years, we’ve been preparing for a future full of AI and new tools to drastically improve the way our companies do business. But what we thought would be a gradual shift was a leap instead.
There’s no slowing it down, and companies that don’t invest time and capital into their IT infrastructure are going to get left behind. It’s time to devise a go-forward plan to address the needs of your business and set yourself up for success in 2022 and beyond.