While a recession is not a foregone conclusion, 74% of CEOs expect economic conditions to worsen in the short term. Digital transformation is critical to navigating the growing economic turbulence businesses are experiencing today. Here are five IT investment predictions heading into 2023.
Organizations that maintain digital transformation investments will outperform those that don’t
“In times of tough economic headwinds, the pressure to make cuts and deliver efficiency savings and productivity improvements is irresistible. However, the evidence of the economic downturns of 2008-2009 and 2020 from McKinseyand Bain suggests that only seeking efficiency savings during tough economic conditions comes at a risk: roughly one in 10 companies manages to outgrow its peers both during downturns and in the subsequent recovery. The big challenge for 2023 will be to avoid leaning too far in the direction of cost savings and efficiencies and so risk losing the advantage on that next economic upswing. As will the calculation of how much of the digital transformation projects can be cut without creating a bigger risk. The Great Recession brought us Uber, WhatsApp, AirBNB, Instagram, and the great resurgence of Amazon. Take your eye off of the ball, and you may be disrupted.” — Ed Thompson, SVP, Global Influencer Strategy, Salesforce
Introducing business intimacy will deliver business value and elevate the CIO’s seat at the table
“CIOs can increase their relevance and ability to deliver business value by bringing a new set of skills and operating processes to the executive table during a radically different business environment. This begins by truly understanding broader business needs — what are the priorities, the pain points, the processes, the investments and, most importantly, the technologies their colleagues are dealing with. This is called business intimacy, and it is key to better understanding the strategic priorities of business partners across sales, service, marketing, commerce, IT, HR, finance, and other teams.” – Juan Perez, CIO & EVP, Salesforce
Read more from Perez on how CIOs can fuel growth amid economic uncertainty here.
Staying competitive will require “digital Darwinism”
“Some companies are going to batten down the hatches and cut costs. Markets though, will continue to evolve. Customers will continue to shop, make decisions, learn and exercise new behaviors, and gain new digital competencies. Competitiveness in this market becomes a matter of ‘digital Darwinism.’ To survive and thrive, businesses must adapt to the pace at which technology influences how society and technology evolves. And to do this, businesses need to be bolder and wiser than their peers. Smart companies will reallocate resources to build the business of the future, today. Forward-looking executives will issue RFPs that seek vendor collaboration and solutions beyond immediate technological needs or basic automation. They will aim to develop customer-centered solutions that remove friction, effort, and emulate best-in-class experiences to compete.” — Brian Solis, VP, Global Innovation Evangelist, Salesforce
Investment in automation will surge as companies aim to do more with less
“In 2023, we’ll likely see a spike in automation spending. Everybody wants to automate the work they do, meanwhile we’re in an economic situation where businesses must prioritize cost efficiency. Automation is about creating ways of working that can save time while continuing to drive efficient growth, and simply doing more with less.” — Brent Hayward, CEO, MuleSoft
Composability will drive business innovation and agility
“Though demand on IT teams is increasing, resources remain constrained, so organizations will need ways of doing more with what they already have. In 2023, there will be a renewed focus on using a composable digital strategy to meet that need: creating reusable business capabilities to drive efficiency, agility, and optionality at scale.” — Matt McLarty, Global CTO, MuleSoft