Kathy Gibson reports from the IDC CIO Summit – With all the changes that Covid-19 has brought about over the past year, a massive 62% of South African CIOs have accelerated their digital transformation initiatives.
“This is a positive indicator that digital technology is now in the forefront and of critical value to businesses at large,” says Mark Walker, associate vice-president: sub-Saharan Africa at IDC.
“We are seeing long-term digital strategies emerging.”
As organisations transform to become digital businesses, it is vital that they reconsider their resilience strategy, adds Meredith Whalen, chief research officer at IDC.
“The future enterprise is one that is able to compete in the digital economy,” she says. “It looks more like a digital than a physical organisation.”
Whalen points out that the pandemic has brought business resilience to the forefront.
“But what does it take to be digitally resilient? Before the pandemic, the definition of resilience was having the ability to rapidly respond to business disruption and restore functions in a timely fashion.
“Companies used to have disaster recovery plans designed for natural disasters; they backed up back up data off site, had back-up up power, planned for alternative communications and alternative sites for operations.
But, as we saw in March 2020, those plans fell short, Whalen says. “In large part this was because most organisations had not imagined the situation brought about by the pandemic where workers couldn’t come into any office, commerce could not take place via physical channels, and they would be unable to access their global supply chains.”
IDC’s ongoing global Covid survey demonstrates just how insufficient most business plans were, and the researcher asked CIOs how they would change their resiliency plans now.
Not surprisingly, 52% planned to change the technology. Operational change was selected by 51%, workforce change came in at 48%, brand change at 48% financial change at 44% and leadership change at 40%.
“So when we talk to leaders, we see they are rewriting their business resilience plans to accommodate the conditions of the pandemic,” Whalen says.
“The problem is that we are assuming we can predict the next crisis. However, the digital evolution will create more cycles of disruption than any other recorded period.
“So, instead of focusing on business resiliency that anticipates a particular type of disruption, we need to get digitally resilient so we can adapt rapidly to any disruption.
“And we don’t want to only recover operations, but also capitalise on the changed conditions brought about by the disruption.”
To be digital resilient, IDC says organisations need to focus on three strategies;
* Accelerate transformation – accelerate existing digital investments as a result of the pandemic;
* Adaptation – adapt to changing business requirements; and
* Innovative manoeuvres – capitalise on changed market conditions
When it comes to accelerating transformation, Whalen points out that areas likely to be permanently changed are work models (38%), network architecture (37%), accelerated use of (35%) and automation (32%). IDC believes cloud adoption and automation are the most critical of these.
“Cloud is the foundation of the future enterprise,” Whalen says. “Companies realise how critical it is for their operations. By the end of 2021, based on lessons learned, 80% of enterprises will put a mechanism in place to shift to cloud-centric infrastructure and applications twice as fast as before.”
The new focus now positions cloud as the foundation of digital transformation, so it is important that CIOs are able to outline how cloud could underpin the digital enterprise.
“CIOs get a handle on all the cloud investments that have been made in the organisation, and bring them together is one unified cloud platform.
“They also need to communicate the cloud investments to the board, and speak about cloud in terms of business outcomes – how it can be used to accelerate revenues, increase efficiency and help to mitigate operational risk.”
Automation is not new, but there is a new imperative to adopt it, Whalen says.
“There were plenty of automation activities before pandemic, but we have seen major acceleration in the past year.”
Automation is no longer confined to process or workflow automation but has become vitally necessary in the IT organisation, she adds.
IDC predicts that ,by 2023, the vast majority of IT organisations will adopt automation technologies to transform the IT workforce. “The automation of IT is not about replacing labour or saving money,” Whalen says. “It is what is required to run IT operations at that the scale needed to support the volume of transactions coming into the organisation when it is a digital enterprise.”
Business automation will be accelerated as well: by 2022 organisations will increase their investment, governance, digital engineering and digital operations by 40%.
“So CIOs need to be able to tell board what the automation strategy is,” Whalen says. “They need to put together a unified automation roadmap across the organisation and communicate how it will increase revenues, mitigate operation risk and increase efficiency in the organisation.”
The second priority that digitally resilient organisations focus on is adapting to the problems uncovered by the disruption, and changing operations because of it.
To adapt to the pandemic, IT leaders have identified they need to change their security systems (31,2%), customer experience (31,1%), network architectures (37,2%), analytic models (23,2%), and work models (37,7%).
“Some organisations are not far enough ahead of the crisis that they can introduce new innovative manoeuvres,” Whalen says, outlining the third strategy that digital resilient organisations aim for.
“They are thinking how to compete differently by how they deliver their services.”
Lot of customers are using things like telemedicine (28,2%), video (26,2%), kiosks (20,6%) and mobile ordering (20,5%) for the first time. “So companies are looking at how they can deliver experiences through these channels.
“They are also capitalising on consumer habits that have been changed as a result of the pandemic.”
Some of these behaviours include 35,6% of consumers who have increased their use of mobile apps; mobile ordering (27,5%), alternative payments (22,7%) and mobile payments (18,4%).
“SO take a fresh look at the changed habits of your customers and how they are using new technologies,” Whalen advises.
She adds that, as a result of the pandemic, IDC has revised its earlier prediction about the contribution of digital technology to GDP (gross domestic product).
“We now predict that the percentage of GDP from digital products, experiences and services by 2022 has increased to 65%.
“This means the race is on, and organisations that can recover faster from Covid-19 are in a better position to continue to employ innovative manoeuvres. Digitally resilient companies will be able to recover faster and adapt to changed business environments.”