If ever there was a year of unpredictability and opposing tensions, 2023 is shaping up to be it, especially in the world of IT. What started as a topsy turvy economy that upended expectations in 2022, promises growing volatility in 2023.
Here are the IT trends we are watching closely this year, and our take on effective strategies to succeed:
1. IT SPEND GROWTH
Defying conventional wisdom in the midst of precarious economic circumstances, worldwide IT Spend is projected to increase to $4.6T, a 5.1% increase YoY according to Gartner. Software spending is expected to lead the growth charts topping 11%, while basic communication will also grow by 2.4% due to the rise in a work-from-anywhere workforce, and the ensuing transformation of the workplace.
Our Take: With IT Spend growing, the need to have the right tools to responsibly manage that growth becomes more pressing.
2. CLOUD GROWTH
Inflationary pressures and recession fears are pushing against a drive toward digitization when it comes to Cloud adoption. The “seesaw” effect will nevertheless not significantly temper the growth curve of cloud spend, predicted to exceed 20% (Gartner), led by Infrastructure as a Service.
Our Take: The trend of leveraging the cloud and taking advantage of all that it can offer that went into high gear during the pandemic isn’t slowing down. The ease of scaling cloud resources must be tamed by a robust cloud spend management strategy to avoid runaway budgets in a recessionary market.
3. CIO & CFO PARTNERSHIP GROWTH
Despite these uncertain times, Gartner indicates that 69% of CFOs are directing CIOs to invest and implement digital technologies to drive business success. With strained resources, the partnership between the office of the CIO and office of the CFO becomes even more critical to navigate the uncharted waters of digital investments while optimizing costs. “Organizations that have these two roles working together step-by-step are driving a competitive advantage over their peers,” says Eric Tan, Coupa’s VP of Business Services & IT.
Our Take: IT and Finance organizations cannot afford to work in silos, and must be in lockstep, leveraging a centralized data repository that affords them easy access to actionable information, while also looking for the means to streamline operations and maximize resources, to compete effectively.
4. LAYOFF GROWTH
A survey of 1,000 business leaders conducted by Resume Builder in December 2022 predicted that 1 in 3 companies expects to lay off 30% or more of their workforce in 2023. This will no doubt affect IT organizations with already stressed resources, as unemployment is predicted to reach 4.6% by the end of 2023, up from 3.7% in November 2022.
Our Take: From managing more with less, to the added stress of offboarding employees, IT departments will need trusted partners with the right expertise and skillsets to ensure that investments in digitization are done effectively, within budget and on time.
5. MSP GROWTH
Resource-limited IT and Finance organizations will need to count on partners that can ensure that any digital solutions are designed and sourced properly to meet the needs of the business along with the most favorable terms in 2023. Such solutions must be implemented, inventoried, and supported swiftly, while ensuring the offboarding of older technologies to avoid excess spend. And since most of newer technologies are OPEX rather than CAPEX, the expenditure and cost allocation must be managed effectively, while the optimization must be ongoing to ensure fiduciary accountability. The need for expert resources across these varied phases that every IT asset goes through will drive growth in MSP partnerships, as global IT services are in demand. Gartner predicts the global IT services spend to grow 8% surpassing $1.3T in 2023.
Our Take: The optimal partnerships will be those that combine the power of IT advisory with comprehensive managed services and IT expense management expertise, to maximize value and create a true ROI.
6. VISIBILITY GROWTH
Visibility is a must have in 2023! Never before has the need for visibility been more pressing, especially as more IT leaders navigate a world where individual employees or line managers can easily subscribe to apps without IT involvement, or an engineer can add a costly recurring feature to a cloud invoice with a single click. “As we look ahead, data insights and intelligence will also play a significant role in helping end users do their jobs more effectively to deliver more value to an organization,” said Muhammand Alam, SAP’s President & Chief Product Officer, Intelligent Spend & Business Network.
Our Take: Visibility requires customized tools, advanced technologies like AI/Machine Learning and Robotic Process Automation (RPA), in order for IT and Finance leaders to leverage their limited time understanding trends, as opposed to collecting data, in order to propel their businesses forward.
In conclusion: As businesses look to navigate the volatility of the coming year, IT and Finance leaders must also focus on strategies to offload mundane or superfluous activities that take up their and their teams’ precious time; while ensuring that they have the information necessary to make business decisions about their IT environment and associated spend, to maximize shareholder value.