It’s that time of year again—time to predict what the year ahead will look like for business leaders. Given what we’ve all been through these last 21 months, that’s an exceptionally tall order. But the essence of the jobs of CEOs and Boards is the ability to see around corners and navigate unseen shoals, so I’ll take a stab.
Let’s start by taking stock of today’s technology governance situation. Since that day in March 2020 when many of us went home and stayed home, Boards and CEOs have been playing catch-up with the Acceleration Economy.
They went from:
- “OMG stop everything and conserve cash we’ll never sell another widget again” to
- “OK spend money ASAP so everyone can Work from Home (WFH)” to
- “Governments are pumping money in faster than it’s leaking out” to
- “How do we pivot faster to handle uneven re-openings, delta waves, skyrocketing demand (for durable goods); near-total shutdown (in hospitality); supply-chain snafus; and more?”
Add massive social changes:
- Diversity, Equity & Inclusion
- Environmental/Social/Governance activism
- Meme stock and cryptocurrency valuations
- Tech giant backlash
Plus, rapid technology developments:
- Much faster networks
- Maturing video collaboration tools,
- Skyrocketing cyber breaches and ransomware
- Growth of electric and autonomous-ish vehicles
It’s no wonder CEOs and the rest of the C-Suite, plus Boards, are running like crazy merely to stay in place.
Against that chaotic backdrop, here are my predictions:
1. The pandemic becomes endemic and business growth explodes. Doctors gave 8 billion jabs so far in 2021 (42% of the worldwide population), with another 8B+ doses promised for 2022. This will allow borders to re-open, factories to ramp up, schools to resume in-person classes. Pent-up demand will demand satisfaction. So your business had better be prepared for crazy growth.
‘Top-Down’ implications: Get your process improvements and IT upgrades done soon or you’ll be swamped.
2. Work From Home for office workers does not fall back to Office as Usual. Rather, it evolves into Work from Anywhere (WFA). Firms discovered that productivity rose. Employees discovered that commutes suck. People moved to where life was, rather than to where work was. CFOs will embrace “asset-light SG&A” as office leases come up for renewal and as Chief HR Officers explain the realities of “the great resignation” to management & the BoD.
Top-Down implications: C-Suite execs will focus on actively maintaining corporate culture across a dispersed workforce. “Trophy” headquarters addresses in center cities will become client demo sites rather than the goal of ambitious workers. To support this, technology investments will focus on modern multi-cloud security models like Secure Access Service Edge (SASE) and Zero-Trust Network Access (ZTNA).
3. Supply-chain disruptions will abate, but zeal for high-availability logistics will remain fevered. The classic Economic Order Quantity models we learned in grad school still apply. The pandemic taught a generation what “stock-out cost” and “order fulfillment cost’ mean. Just-in-time and lean principles cut all kinds of costs, but they leave proponents exposed when safety stocks disappear. Even as short-term (weeks to months) fixes are implemented to reduce bottlenecks, conversations about risk mitigation are becoming more serious. And those conversations lead to investments in on-shore and near-shore manufacturing and warehousing facilities, which can take months to a few years to construct or re-fit.
Top-Down Implications: Logistics processes and applications will see huge investments for the next several years. Decentralized manufacturing and increased routing flexibility will be needed to mitigate regional outbreaks and other disruptions, such as wildfires and severe weather.
4. The robots are coming in 2022. Worker shortages and the need for pandemic safety are spurring demand for operations technology investments like robots. Advances in networking, AI, and sensor technology are making OT tools faster, safer, cheaper, and more effective. When demand and supply converge, progress is rapid.
Top-Down Implications: Integrate IT systems with operations technology systems to exploit OODA (Observe-Orient-Decide-Act) loops between demand and supply, but be sure you strengthen security to forestall gruesome mishaps. Ensure your networks are adequate to handle huge growth in sensors/actuators and in data volumes.
5. SaaS ERP/CRM/EHR systems become industry clouds. Increasingly sophisticated and integrated IT and operations technology applications are required to meet the challenges identified above, and others. Layering new application capabilities atop old monolithic applications may seem like an expedient solution, but often this compounds the risk and cost of technical debt. Suggesting a migration to a traditional ERP/CRM/EHR would be folly going into a period of growth, change, and uncertainty. But new-generation cloud-native Software-as-a-Service application suites and “super suites” make such transitions far quicker and less risky. If you know how 80+10+10 equals 1/3+1/3+1/3 you’ll understand how implementing an emerging industry cloud SaaS truly changes all aspects of your technology investment: time to value; up-front and ongoing cost; flexibility.
Top-Down Implications: Gain a BoD/C-Suite understanding of your organization’s technical debt risk and learn about the application revolution inherent in SaaS industry cloud suites.
6. The Qualified Technology Expert (QTE) Director role starts to find acceptance. Will it be a successful derivative lawsuit against Directors after a breach? Or a high-profile mega-project that goes off the rails? A government edict, a la the Sarbanes-Oxley Qualified Financial Expert? Or do Directors just get tired of impenetrable jargon-laden answers to straightforward IT questions? My guess is it will be all three, given the increasing scale and importance of IT and OT investments, plus the ever-increasing scale of cybersecurity breaches.
Top-Down Implications: Educate the Nominating/Governance Committee Chair, Lead Independent Director, CEO, and CHRO about the QTE role and qualifications, and start looking.
This article appears in the Predictions 2022 Edition of the Acceleration Economy Journal Download the Full Journal Here
