Chief information offers (CIOs) and fellow C-suite executives face formidable risks and challenges in a turbulent geopolitical environment with rising inflation, cost-cutting, supply shortages, high staff turnover and economic unknowns. And we’re still not out of the woods with pandemic-related disruptions.
It's more important than ever for CIOs to be aware of potential technology risks that could impact their organization's success. IT professionals are used to responding quickly to external change and developing new processes and software that drive better business results.
Gartner Forecasts Increased Spending in 2023
No matter what the macro environment looks like, CIOs must work through the various risks of technology and lead their teams to produce or exceed business objectives. And they still have to run an efficient, cost-effective operation that will move the company into the future. It's an arduous task. But the good news is that according to Gartner's forecasts, global IT spending will grow 5.1% in 2023.
Although Gartner's projection looks promising, given all the challenges CIOs and IT leaders have, they will have to spend wisely and prioritize accordingly for the business to stay relevant and competitive. This will give CIOs the opportunity to solve challenges that affect the entire business.
This article will examine the top technology risks facing businesses and the challenges addressing them.
Cybersecurity
According to the 2022 CIO Leadership Perspectives study from Evanta, the top priority for CIOs is cybersecurity strategies and keeping their company from having their data breached. That's up from the second spot in 2021.
Cyberbreach damages are estimated at more than $6 trillion annually. Old computer hardware is frequently inconsistent and thus more prone to cybersecurity problems than newer equipment. Developing a cybersecurity program is expensive, and implementation takes resources. Although delaying upgrades may seem attractive in the short term, it could be disastrous in the long run. Customers will not be happy with downtime and inconvenience. And an attack could severely harm customer trust in the brand.
There is nothing more essential to a business than its proprietary company data. Yet, cybersecurity challenges are rising, and hackers are becoming more sophisticated. Cyberattacks can occur in small companies, just as in large organizations. No matter the organization's size, the business can be ruined entirely with sensitive customer and financial data in the wrong hands.
Although more businesses are aware of IT security challenges and the damage a data breach could cause, many companies still neglect to protect themselves from such threats. The technology industry is constantly working to find new and better ways to fight against attackers.
Internal and External Security Threats
Security breaches are not exclusive to external customers. They can come from internal employees as well. Some industries like grocery and healthcare have placed stringent technology usage policies everyone must follow. For example, an attack on a grocery chain can cost millions. Likewise, a breach in a healthcare facility that stores patient-sensitive information could be at risk.
With over 68% of employees accessing files from their smartphones, creating policies to keep sensitive data safe is essential. Outdated operating systems and lack of encryption on smart devices cause concern regarding data leakage, along with phishing, malware, ransomware and weak passwords.
Increasing Need for Digital Transformation
Digital transformation is how companies implement technologies to drive essential change across their organizations. Businesses benefit by ensuring better efficiency and greater business agility, ultimately unlocking new value for employees, customers and shareholders.
The transformation mindset grew partly as a response to the pandemic when employees required remote access. It laid the foundation for advanced digital transformation throughout many enterprises. It was a matter of necessity.
There are many ways to lead digital transformation, and no two business journeys are the same. A company might launch artifical intelligence (AI) or cloud infrastructure to improve the customer experience, create a new supply chain design to enhance machine learning or improve production processes to meet heavy key performance indicators (KPIs).
Failure To Innovate
One of the most significant risks businesses face is the lack of innovation. It isn't easy to keep innovation going when everyone is doing more with less. But without innovating new products and services, successful companies that own a market share in their industry can begin to slip.
Many companies now have teams specifically dedicated to innovation. They're the ones who figure out what's next, what their customers want and need and new ways to serve them. If you don't figure out new ways of serving your customers, your competitors will.
Optimizing Data
For CIOs, developing processes and systems for gathering and analyzing data is at the forefront of their objectives. Innovative companies are figuring out how to use data to make better business decisions and as the key to reaching their goals.
CIOs must create a master data management initiative, including technology upgrades such as API integration layers, for more agile processes to access data. It’s also important to create a corporate culture that encourages innovative ideas based on optimizing information.
For example, data is central in sophisticated marketing programs and customer experience improvement. Initiatives are all based on customer purchasing habits. The information matches preferred items with correlating coupons to generate more significant sales. Data can also be a foundation for expanding AI or machine learning. Optimizing the data is a matter of not only interpreting it but how it’s applied.
Investing In Enterprise Cloud Strategy
According to the Evanta CIO survey, 54% are investing in cloud infrastructure, one of the most prominent and extensive areas of spending.
Other reports confirmed that PwC's 2022 Pulse Survey indicates that 43% are refining their IT strategy and operating data centers with cloud-based solutions. More than 28% of CIOs are moving to cloud-based enterprise-wide architectures. Using the cloud reduces costs and increases productivity.
Customer Experience
In today's business environment, customers expect a seamless customer experience. Gartner and McKinsey & Company consultants recognize the importance of analyzing the customer journey and providing products and services with personal end-user ease.
Disjointed customer experiences are an ongoing pain point for some companies. Providing a seamless digital user experience across the touchpoints of the customer journey is complex, and a traditional channel mentality won't work.
A siloed user experience (UX) based on today's channel worldview stops organizations from delivering a seamless digital customer experience to internal and external consumers. And multiple internal silos deter the continuous and fluid customer experience, while outdated IT infrastructure can prevent consistency for the end user. CIOs need a more data-driven strategy around customer data management, and customer journey intelligence is required to make composable UX attainable.
Having a complete picture is a constant challenge for CIOs who aren't close to day-to-day internal and external customers. Providing a superior customer experience is not only the CIO's responsibility. It's become their job to integrate customer experience into their IT deliverables and advance customer experience with a cross-functional team. By incorporating business with developers and technology, they can adopt an agile environment where team members collaborate to create a lasting solution.
Companies dedicated to superior customer experience begin by creating multiple customer personas, mapping experience to them and driving technology and data solutions to develop better products and experiences for the end user.
Outdated Hardware and Software
It's challenging for CIOs to stay on top of outdated equipment and software. Replacing hardware and software is costly, and integrating hardware or software within an existing network is a big challenge. There are always new problems that don't show up at the beginning.
Hiring external resources could help limit spending and prevent errors like freezing, crashing or slowing performance.
New Technology Integration
CIOs are responsible for introducing new technology to the business. It's vital to take the time upfront to analyze the current hardware to determine compatibility and upgrade where necessary before beginning the initiative. Hiring a Managed Services provider can help with this.
Lack of Comprehensive Solutions
It can be tempting to continually apply an easy fix to technology issues. But this is a band-aid approach and won't solve the real problems.
Sometimes the same issues crop up over and over again. In that case, it's time to consider a fully comprehensive solution. To solve the problem, you’ll probably need to replace equipment and software or look at security risks in more depth.
Uncovering the heart of an IT problem demands the critical use of performance metrics. Then you will have a baseline understanding of the problem and how to ensure it will be fixed.
Effective Solutions
Hiring a Managed Services provider can be one of the simplest ways to avoid IT problems. They know how to identify common problems and solve emergencies quickly.
Part of that solution might involve adding insurance coverage created to address the unique risks that arise from working with technologically innovative products and services.
Demand For More Sustainable Technology
Sustainability is quickly moving from the exception to the rule with consumer expectations rising and sustainability becoming a must-have in all aspects of the company.
During 2023, consumers, business customers and investors will increasingly demand sustainable technology and transparency. More companies will replatform to the cloud. Organizations must also use sustainable technology, particularly in high-resource usage areas like data centers.
They will need to stay current, remain aware of future opportunities, continue to foster a collaborative environment and think outside the box to keep one step ahead of the competition.
With the enormous risks facing CIOs — whether protecting company data, moving to the cloud or digital transformation — our technology specialists can help you develop the solution to put your company on the right path for now and into the future. Contact us at Consolidated Communications today to get moving.