The year 2020 will no doubt go down in infamy when the history of the 21st century is eventually written.
Just like 1918 did in the previous century with the outbreak of Spanish Flu which killed an estimated 50-million in two years, and 1347 when The Black Death, or The Bubonic Plague, claimed between 75-million and 200-million lives in a four-year period.
But one lesson the Covid-19 pandemic did teach modern society was the crucial importance of technology. Whether it was simply to keep in touch with friends and relatives during various government lockdowns; to buy essentials online when shops were closed; as an entertainment medium; or, most importantly, as an essential collaboration tool between researchers around the globe seeking a vaccine, technology’s impact has been profound.
And, while many tech companies touted the pandemic as an accelerator towards the digital transformation of the world, there were still many harsh lessons to be learned. Cybersecurity is just one to spring to mind. Connectivity, another. So what have IT organisations gleaned from their Covid-19 experience? And how will this shape trends in the market going forward?
The information technology (IT) industry will morph in 2021, prompted by its response to the chaos of 2020 and affirmation that it is the central nervous system of our digital society.
This is according to the recently-released IT Industry Outlook 2021 report from CompTIA.
The annual report from the leading nonprofit association for the technology industry and IT professionals provides insight into the trends that will shape the industry, its workforce and its business models in the new year.
“The confusion, disruption and uncertainty we’ve experienced in 2020 will have some spillover effect in 2021, but rather than rebuilding to restore what it was, we believe that the industry is poised to rebuild for a better and brighter future,” says Carolyn April, senior director, industry analysis at CompTIA.
“Transformative changes accelerated this year, leaving no doubt about the critical importance of digital operations,” adds Seth Robinson, CompTIA’s senior director for technology analysis. “But as the spotlight on tech brightened it brought other matters into focus, including the industry’s responsibility to become more diverse, equitable and inclusive; and whether its influence and reach will be subject to new government regulation.”
CompTIA says there are 10 key trends to watch in the coming year:
- There Is no normal – The concept of an established pattern will be more elusive for businesses, forcing them to juggle a multitude of options, from employee locations to supply chain components to customer demands.
- Cloud is king – Organisations will adopt a cloud-first mentality when it comes to building or upgrading IT infrastructure.
- Channel firms respond to customer changes – The need for flexibility by channel firms has never been greater as customers work their way through uncertain times.
- Channel dynamics become more balanced – Vendor/partner relationships become a marriage of equals, with cloud computing as the primary matchmaker.
- Emerging technologies find their place inside business solutions – Organisations direct their energy into building solutions on top of the platform’s they’ve built on cloud and mobile options.
- Zero-trust shapes cybersecurity Initiatives – Verify everything becomes the new paradigm that guides cybersecurity practices.
- Managed service providers build deeper cybersecurity expertise – More MSPs redefine their businesses almost exclusively around security, adding advanced services.
- Tech industry prepares for regulation – The impact is likely to be felt by everyone, from the largest industry titans to the smallest channel firms.
- Business conversations drive business skills for tech pros – No longer relegated to the help desk, IT pros’ need for professional skills is accentuated – and often required.
- Companies set public goals for diversity – It’s time for companies to move beyond awareness to accountability with deliverables that are public and certifiable.
CompTIA’s IT Industry Outlook 2021 also includes expectations for the year ahead from the perspectives of technology company executives and IT professionals.
Companies expect to alter their business models next year by offering more services, getting more involved with emerging technologies, exploring vertical market opportunities, and stressing their cybersecurity expertise. Each of these steps (and others) are part of their plans to bounce back from 2020’s challenging environment. Just over 60% of firms say the Covid-19 pandemic had a negative impact on business.
Asked about 2021 prospects, 37% of firms expect to grow revenue in excess of both their 2020 and 2019 results. Another 25% expect revenue to remain stable with 2020 levels, though for some firms that might be less than 2019 because of the effects of the pandemic. About one-quarter say they lost revenue this year, but hope to revert back to 2019 levels. Four in 10 companies anticipate keeping their budgets at 2020 levels, with a quarter predicting somewhat higher spending and 13% somewhat lower.
Similar mixed signals are present in survey responses from IT professionals. Nearly 80% feel good about their role as a technologist. The majority see a bright outlook thanks to the high demand for skills, driven by the increasing importance of technology to business strategy. But there is also uncertainty over technology spending, with 44% feeling that budgets are too small, and they acknowledge that they’ll likely be asked to do more with less. In fact, three in 10 companies are retraining existing staff to fill open positions or address new areas of focus.
Another report released by Experian – Enterprise Agility and Smart Routes to Digital Transformation – says that more than half of companies across Europe, the Middle East and Africa (EMEA) expect to return to pre-pandemic revenue and profit within the next 12 months..
According to findings, more than 80% expect to recover their position within 18 months. But, despite the optimism and resilience, more than a third (34%) of decision-makers admit they’re also now struggling to get a complete picture of indebtedness or identify financially at-risk customers.
Analysts already warn of an after-shock with a significant spike in non-performing loans, financial over-commitment, exposure and default. As a result, nearly four out of five (77%) CEOs are now increasing or retaining their investment in improved customer insight.
It’s also clear there’s no going back to pre-pandemic business models, with lack of automation across all commercial functions now a critical challenge for more than one in four (26%) of businesses.
Mark Wells, chief customer officer at Experian Africa, says: “Despite the pandemic’s profound impact on the global economy, many decision-makers now recognise the need to take action to manage both their customers’ and their businesses’ futures.
“It’s also clear there’s now no going back to old operating models. From here on, digital technology is the key enabler, with more than half now proactively planning to invest in artificial intelligence and machine learning to help drive their growth.
“There’s also clear recognition that making the customer relationship the top priority and consistently delivering better experiences, are the keys to locking in loyalty and favourable long-term sentiment.”
Around two-thirds (60%) of firms across EMEA are now actively seeking growth initiatives, including new digital strategies, while nearly half (48%) are increasing investment budgets in advanced analytics to enable them to better understand and respond to their customers’ needs.
Decision-makers also expect artificial intelligence and machine learning to drive their business from here on. Within the next three years, more than one in three (34%) plan to leverage these technologies to optimise customer services and to improve fraud and risk management.
The new Experian-commissioned study, conducted by Forrester Consulting, is called Enterprise Agility and Smart Routes to Digital Transformation. It looks at businesses’ approach to resilience and takes a deep dive into the key drivers, pain points and innovations underway throughout the EMEA region.
The swing to advanced analytics and robotic process automation (RPA) are also top-of-mind among chief financial officers (CFOs), as well as accelerating digital skills among their teams, according to research organisation, Gartner.
A survey among CFOs in October this year also revealed that most of them were not confident in successfully meeting their highest priority digital objectives for the coming year.
“The Covid-19 pandemic has forced CFOs to abruptly assess both their organisations’ and functions’ current digital capabilities, and they have clearly found many areas lacking,” says Alexander Bant, chief of research in the Gartner Finance practice. “Next year will be about accelerating digital investment timelines from the pace of a multi-year marathon to a 12-month sprint. However, most CFOs aren’t sure they will successfully cross the finish line in many of these areas.”
Gartner’s survey asked CFOs where they will spend more time in 2021 compared to 2020, and where they anticipate difficulties in achieving their goals. Among digital priorities, the top three areas for greater investment of time were all also accompanied by significant levels of doubt among CFOs, with half or more expecting it to be difficult to achieve their top digital goals.
While 82% of respondents indicated that advanced data analytics technologies and tools were a top priority, nearly as many, 78%, expected it to be difficult to successfully achieve their goals in this area next year.
Many CFOs are seeking to revive stalled growth investments while optimising costs to better reflect new business realities. Chief among these realities are meeting new customer preferences shaped by the pandemic, including greater expectancy for speed, multichannel delivery and always-on availability.
“CFOs face dual demands in funding the broader digital enterprise, while also ensuring their own function is equipped with the tools, technologies and talent for successful transformation,” says Bant. “Fortunately, many digital priorities, such as RPA, should also be supportive of CFOs’ cost optimisation goals, at least long-term.”
CFOs should put a primary focus on identifying the investments that will drive positive business outcomes and enhance employee performance within new hybrid working models. CFOs will need to reassess how to measure business performance in this environment while also encouraging new business models that support digital growth.
Bant suggests accelerating the use of RPA to free up team member time on repeatable and transactional tasks. Advanced digital analytics technologies can help finance organisations deliver insights at scale and create long-term competitive advantages.
Attracting the digitally savvy finance talent required to maximise value from analytics and automation may be more feasible in light of a newly open and remotely available global talent pool.
“Most CFOs have by now conducted small-scale experiments in either RPA, artificial intelligence (AI) or advanced analytics technologies, and they have seen the potential for significant ROI,” says Bant. “Now the key will be achieving scale with these technologies while ensuring that CFOs have the talent in place to run an always-on, fully digital business.”