Andrew Duncan at Infosys Consulting explains how businesses must avoid innovation fatigue and continue the important task of digital transformation.
In my last article, I outlined key steps for leaders to energize and support their people through pandemic fatigue. But to retool for the world of tomorrow, businesses must look to overcome “innovation fatigue.”
When COVID-19 swept the globe, organisations were under intense pressure to rapidly install or adapt new technologies to accommodate virtual working, often creating temporary fixes or clunky systems as an interim solution. Now, almost 12 months into the crisis and with a significant emphasis on digital transformation, how can leaders refresh their technology stack to proactively innovate for the next normal?
Historically, many large enterprises have installed systems to facilitate existing limitations, leaving burdens of technical debt, outdated applications, and workarounds. As businesses look to compete in an increasingly complex and digital world, it’s more important than ever that they review and upgrade legacy core systems to support the agility, innovation, and new ways of working that fuel digital transformation.
In 2021, we will see an increasing number of IT leaders and their C-suite peers launching application rationalization initiatives to cull technical debt to help deliver cost and cash savings, whilst also optimising performance and efficiencies. By streamlining the portfolio of legacy applications, leaders can orient investment towards strategic platforms that provide maximum value and deliver on transformation initiatives.
COVID-19 required two rapid business responses: accommodating distributed teams and delivering on-demand scalable resources. Unlike on-premise systems, the cloud allows for this scalability, reliability and distribution across zones and regions, which will be continue to be critical as we cope with resurgences and variants of the virus and the new hybrid model of remote and office work.
Through cloud adoption, companies can also achieve significant increases in top-line revenue and profitability. At the same time, a cloud infrastructure offers immediate access to powerful, ready to use, solutions for analytics, AI and automation. These technologies allow businesses to generate competitive advantage quickly without the up-front costs and lead times of traditional platforms.
Collaboration between business strategy and technology
Since the pandemic began, enterprises have put time and effort into immediate survival rather than longer-term growth. This meant cutting costs by delaying programmes focused on strategic growth and spending more on tactical projects. However, as we move into the recovery phase of COVID-19, organisations need to translate growth ideas into tangible initiatives.
Moving forward, there must be tight collaboration between business leads and CIOs. With this partnership, senior leaders can take a comprehensive look at initiatives and resources across the organisation and ask tough questions about how to improve the portfolio. At the same time, CIOs and their teams will have the right framework and understanding of corporate strategy to make day-to-day technology decisions.
Bold choices on portfolio-transforming investments, particularly acquisitions and divestments, can help reframe the future of a business and position it for growth beyond the pandemic. COVID-19 locked up the technology M&A market for much of the first half of 2020, when spending dropped to its lowest level in a decade.
However, the conditions that facilitated a surge in tech M&A in the latter half of last year are still in place – a rising stock market, stabilising IT budgets, and continued digital living and working. As vaccines roll out and the economy begins to recover, M&A activity will accelerate. We are already seeing non-technology companies acquire to bring specific IT capabilities in-house, supplementing their existing tech stack and digital talent.
Investments in security
Emerging technologies like 5G and edge computing will find their footing after some delays in 2020, and IoT will play a key role in post-pandemic recovery for economic and social distancing. These innovations, and others, will have a knock-on effect on cyber security strategies. In the new digital world, it is vital for good security practices to become integral to businesses, backed by the right resources and investments. Moving forward, we will see security teams collaborating with leaders to ensure that cyber security decisions support the organisation’s strategic goals, and to guarantee that security budgets are delivering a good return.
Technology will play an important role to compete in an increasingly complex world. Many leaders are finding that their organisation’s past technology choices are still limiting their strategic options and agility. But in a permanently changed business landscape, there has never been a better time to create a lasting foundation for innovation.
Andrew Duncan is Partner and UK CEO at Infosys Consulting
Main image courtesy of iStockPhoto.com