In this segment of “Office Optional with Larry English,” Larry shares the top priorities CIOs need to consider when facing business uncertainty.
For business leaders and technologists, 2023 has been a wild ride – and we’re only in the second quarter.
Already in economic uncertainty, CIOs began the year managing their infrastructure and balancing the adoption of new technology with the need to be cautious about spending on tools that won’t bring value to the organization.
If steady growth and responsible scaling weren’t enough, the introduction of ChatGPT and other AI-driven technologies brought on a tidal wave of disruption. The role of CIOs has become increasingly more challenging – and critical – today than ever before.
Headed into the second half of the year, here’s what we’re seeing as the top priorities for CIOs:
AI Planning is Key
Ready or not, the role of AI and working through everything from security to governance is now on every CIOs radar. The global AI market was valued at $136.5 billion in 2022, and is expected to have an annual growth of 37.3 percent from 2023 to 2030, Grand View Research reported. In North America alone, the AI market is poised to increase the GDP by 14.5 percent, equating to a staggering $3.7 trillion.
“By enabling organizations to become more competitive and innovative, AI will help drive economic growth and create new fields, new opportunities and new jobs. It will also help organizations become more sustainable by enabling them to operate more efficiently and reduce their environmental impact,” said Joseph Ours, director of our Modern Software Delivery practice, in his article, “The Rise of AI in the Workplace: ChatGPT’s Role in Shaping the Future of Work.”
Whether you realize it or not, your company likely uses artificial intelligence (AI) in some way already – through predictive analytics, automated communications, voice recognition, or a service that relies on AI to operate. But AI cannot be a passive investment. Experts suggest that within the next three to seven years, virtually every company across all sectors will significantly integrate AI into their operations and workforce. It is anticipated that sectors such as financial services, logistics, and retail either have already incorporated AI or will do so expediently within the next one to two years. This is backed up by a United States Patent and Trademark Office report that shows a rapid uptick in AI-backed patents.
In the rapidly evolving business landscape, companies that fail to embrace AI risk falling behind their competitors. Harnessing the power of AI can not only lead to substantial time and cost savings and enable quicker resolution of failures, but it can accelerate the time to market for innovative products and services and enhance the quality of decision-making processes.
If AI is not part of your tech investment budget, it is crucial to elevate its priority for consideration.
Tech Investment Continues Amid Economic Uncertainty
The economy has played a major role in how leaders strategize, approach and even refocus their company’s strategic initiatives and goals for the year. In fact, 2022 saw both the deepest global downturn on record, followed by the strongest rebound, according to data from JP Morgan. In the 2023 State of the CIO report, 77 percent of CIOs said their role had been elevated due to the state of the economy, shifting their focus to minimizing the impacts caused by things like inflation and supply chain issues.
Despite economic uncertainty, The New York Times reported that “business investment in technology remains remarkably resilient, and that trend appears likely to continue in 2023.” Brad Nellis, a consultant on our Cleveland team who specializes in CIO engagements, said he’s seen a similar trend in that CIOs have drafted contingency plans with breakpoints, but so far, they haven’t had to pull back or reduce expenses.
Barb Magella, an executive and management consultant with Centric’s CIO Services, shared that while there’s a sense of caution, companies still have a need and desire for technologies that will expand and grow business. “The economic situation is volatile enough that we don’t know what will happen long-term, and that’s how CIOs have been approaching it,” she said. “Ultimately, they can’t afford to hold back on things that will move the business forward, but they have to be smart.”
To stay competitive, CIO leaders have to be strategic about how they invest their IT budget and focus their efforts on providing stability while embracing agility.
Cloud Activity Continues to Ramp Up
The cloud and cloud computing aren’t new technology, but Nellis said even companies that have on-prem infrastructure are showing increased interest in moving workloads to the cloud. “They’ve been able to do it for a long time, but many had not fully embraced it yet,” he said.
Even if they’re not moving their entire infrastructure to the cloud, more IT leaders are carving out requirements for specific applications and moving those to a cloud platform, and at a quickening pace. For example, a company might move elements of enterprise resource planning (ERP) to the cloud even if it doesn’t move the entire system.
Companies not using the cloud are behind 90 percent of others, according to a recent study by 451 Research. “More than 90 percent of businesses use or expect to use a multi-cloud environment, with 52 percent using or planning a fully integrated hybrid environment in pursuit of security policy consistency, overall agility enhancements and reduced total cost,” the report states. In addition, 34 percent of IT leaders called out application and legacy system modernization as top investments this year.
Data Analytics and Governance Remain Critical
Neither data analytics nor governance are new, but both are seeing renewed interest in 2023, according to Nellis and Magella.
Data governance, or how companies manage their existing data in their systems – from their ERP to customer systems – and ensuring consistency of that data throughout its life cycle, is increasingly important. A successful data governance strategy can prove immensely beneficial, leading to improvements in decision making, operational efficiency, data map creation and a reduced risk of compliance breaches.
For example, we’re working with a software company that has undergone rapid growth through acquisition. Now, in addition to digesting the new companies in traditional ways like rightsizing and reorganizing, leadership is evaluating investments in technology from all parts of the organization to optimize consolidation of data sources between the acquired companies and the parent company.
Likewise, gathering data analytics with a software solution like Microsoft’s Power BI paves the way for more informed decision-making. “It seems like today, everyone wants to be able to look at and drill into their analytics from multiple lenses,” Magella said. “Even smaller companies are realizing if their data is all over the place and in disparate, sometimes old systems where data quality may have degraded over time, it’s going to hurt them in the long run.”
Cybersecurity Will Always Top a CIOs List
Writer, a generative AI platform built for enterprises, recently released a report showing that nearly half of senior executives think corporate data has been shared with ChatGPT. The same report shows that 59 percent of respondents plan to or already have purchased a generative AI tool in 2023. This emphasizes new and worrisome concerns for CIOs as they plan for cybersecurity.
As digital transformation and AI use accelerates – in everything from finance to healthcare, e-commerce, retail and technology – companies are more vulnerable to cybersecurity breaches. CIOs must provide employees with secure, yet quick access to data no matter where they are in the world while also considering how employees use third-party applications. Things like user authentication, making certain they are who they purport to be, and authorization, confirming the user’s access rights to the data, are critical.
Enter Zero Trust, which “demands organizations verify anything, anyone, from anywhere trying to connect to their systems,” and adds protection by ensuring employees can only access resources they need to perform their role.
Talent and Leadership Are a Critical Investment
Eighty-five percent of IT leaders reported that they were ramping up (41 percent) or keeping talent acquisition the same (44 percent) this year, the State of the CIO report revealed. The most in-demand skills: technology integration and implementation, at 42 percent; IT cloud architecture at 40 percent; and risk and security management at 36 percent.
“CIOs are really starting to see the value of people – retaining people who have deep knowledge of their business, systems and the industry as a whole – and how they can help drive the business forward,” Magella said. “Investing in people you already have is always a good bet. If you want to avoid the boom and bust of key people moving when the market gets hot, it’s about more than just money. It’s about valuing people, treating them well and challenging them in their roles so they feel their contributions are important not just to the company, but on a larger scale.”
Nellis agreed, adding that retaining top talent should be among a company’s key priorities, particularly in the more competitive talent landscape brought on by hybrid and remote work options.
Your Company is an IT Company
Technology has gone from being on the periphery, something that the IT department managed and was relatively low on management’s radar, to being the heart of an organization. Automation, artificial intelligence, and connectivity are all causing significant upheaval in the business world, and more pointedly to the role of a CIO.
Staying ahead of the competition hinges on an organization’s ability to rapidly assess, implement and improve technology to make impactful change – all key functions of the CIO.
We’ve known this for a while, but the saying “Every company is now a technology company,” has never been truer. If the first half of 2023 is a prediction for the future, perhaps the best advice is to buckle up for even more disruption in the second half of the year.
Start your journey to IT Due Diligence with the right questions. Our assessment is here to help you get started.
