Technology investment in 2020
Digital Transformation and Automation
The Paradigm shift of 2020
2020 was supposed to be a great year for businesses. The economy was soaring, at 3.5% unemployment was at it’s lowest in decades, and businesses were predicting record profits in 2020. And then COVID hit us leading to a re-evaluation of business plans.
Technology Impact
There are external factors that organizations cannot control – In a span of 33 calendar days, the benchmark S&P 500 (SNPINDEX:^GSPC) lost 34% of its value. That's the quickest descent in history from a recent high. 22 million people filed for unemployment within 4 weeks. More than 150 publicly traded companies have informed investors about missing guidelines.
On the Technology front, Trustradius survey reports technology buyers plan to cut spending on marketing software (44% of those surveyed), software services (36% of those surveyed), Project and task management tech (33% of those surveyed). These are indicators that organizations are preparing for an unpredictable future and trimming non-essential software spending.
The thought leaders
While the situation doesn’t look very promising, forward-looking organizations are already planning for the future. And there are 2 specific focus areas where these organizations are planning on spending: Automation and Digital Transformation.
Automation focus
Forrester expected that in 2020, organizations would automate 10% of the IT tasks. It further predicted that organizations would ‘actively work to get themselves ready’ for automation. With the current circumstances, technology organizations should focus inwards for innovations, and automation would be at the forefront of initiatives.
The strategy to automate not only helps in reducing the cost of manual work but also de-risks the organization. Combined with integrating systems, Automation provides a very strong mechanism for organizations to spend on internal systems. This provides a platform to come back stronger when the economy gets closer to normalization. Automation reduces processing times from days to minutes while bringing quality control to up to 100 percent. In 2018, McKinsey predicted automation would lead to a minimum of 20% on the labor cost savings. However, automation and integrations can be hard and require both the business and the technology to work hand in hand. Most organizations have a gap in skilled personnel to bridge that gap and end up failing, According to the McKinsey survey in 208, only 55 percent of organizations believed that their automation has been successful. With more organizations focusing on automation, the techno-functional roles would be more in demand while the supply of experienced resources would be limited. The sooner organizations start the process and get a head start, the more the chances of getting the right people to ensure success.
Digital Transformation (DT)
Digital Transformation(DT) should be the number one initiative for the rest of the year. However, Digital transformation is also the number 1 concern for leaders. Harvard Business Review reported that 70% of the DT initiatives do not reach their goals. A key underlying issue is when organizations try to repurpose their existing resources to run digital transformation processes. This is the prime contributor to the failed DT initiatives.
Currently, Organizations that had a digital transformation roadmap of 4-5 years are re-planning to be completed within the next 9 to 12 months. To execute such a fast and DT initiative efficiently, it is important to leverage internal resources and it is critical to bring in external consultants who have the experience and the expertise to help with the transformation.
In conclusion
From an unemployment perspective, the current situation does not look very positive. However, for high-end technology workers, the situation has not changed much. Everest Group predicts that there would still be a shortfall of about 15 percent in high-end technology resources in 2020.
Organizations that focus on Automation and Digital Transformation in 2020, would be the ones walking out celebrating on the other side. They won’t be able to do it without mobilizing their internal teams to rally behind the initiatives, but they have to bring in experts to do it efficiently and make it successful.
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