Three Ways to Get Maximum Value from your IT Investment
The turbulent past year and its economic contraction have left most businesses looking to cut costs. However, while 52% of companies plan to curb or defer investments, just 9% will make those cuts in digital transformation. In fact, digital transformation investment is growing at an annual rate of 18% and is expected to reach $7 trillion by 2023. Though digitalisation has been on many organisations' agendas for years, change has often been incremental. CIOs and IT decision makers had to fight to convince a sceptical board to approve tech investment budget – but a slow pace of transformation is no longer acceptable.
Use of digital technologies has understandably surged over the last year as we've had to work, socialise and shop from home. As a result, the need to invest in modernisation is now recognised by the C-Suite as a business imperative, as it can not only boost business efficiency and drive innovation, but also improve employee retention. Data from PwC shows more than half of employees want to work remotely at least part of the time after the pandemic, so spending on technologies that enable a hybrid way of working will be crucial. Here's three key focus areas to get maximum value:
1. App modernisation
Modernising applications is a key part of digital transformation, as organisations that simply ‘lift and shift' traditional apps won't see the full potential of the cloud. The app modernisation services market is projected to reach $24.8 billion by 2025, with an annual growth rate of 16.8%; modernisation is essential to avoiding major process inefficiencies, unnecessary costs, and frustrated users and employees, and can offer benefits like a 60% reduction in time-to-market and a 40% increase in employee motivation. However, some organisations shy away from modernising apps as despite it being the best way to obtain the much-lauded benefits of the cloud – think flexibility, scalability and improved performance – it requires a large time and cost investment and involves replacing business-critical applications – think payroll or CRM systems – that are trusted and relied upon.
The good news is there are ways to modernise without replacing every single application. The first steps are deciding which apps are vital and identifying existing apps that may not be being used to their fullest potential. Then, organisations should assess app functionality and user experience to highlight opportunities for performance improvement – either by rearchitecting them for the cloud or revisiting how they're used within the business. This can be difficult, as rearchitecting apps in particular requires highly skilled technical workers, who organisations may not employ in-house. It can be helpful to bring on a partner when migrating applications to the cloud. They can also handle trickier parts of the process like decoupling data from applications so it can be shared through APIs and automation.
2. Using FinOps to optimise cloud cost
By 2022, 90% of companies will be using cloud services. While some organisations had already begun migrating email or certain workloads into the cloud before COVID-19, the pandemic forced most into delivering remote working, web conferencing solutions or click and collect services overnight. The increased demand led to businesses experiencing unbudgeted cloud spend in the first quarter of 2020. Indeed, even in ‘normal' times, executives estimate that at least 30% of their cloud spending is wasted.
To get maximum value from their investment, businesses need to ensure they only buy what they need when it comes to licensing, cloud consumption, support and maintenance costs. Naturally, the first step to rightsizing is understanding cloud maturity. IT, Finance, and the C-Suite must come together to discuss cloud spend, identify areas of improvement, and make an action plan detailing where savings can be made – a practice known as FinOps. Doing a thorough cloud maturity assessment focused on identifying and bridging any gaps in cloud management, and building future cloud governance, can ensure organisations' spending and problems don't spiral.
3. Prioritising security
While cloud adoption and app modernisation increased in 2020, nearly half of UK IT leaders did not update their security accordingly. This is especially concerning as digital transformation increases the threat surface for cyber-attacks, with companies more vulnerable due to increased remote working and storing more data in the cloud. Organisations spend about £2.9 million recovering from security breaches; companies that have just spent millions on new technologies simply can't afford the cost implications of a breach, let alone the often-irreparable reputational damage it would cause.
There are a number of ways companies can secure their digital transformation projects. This includes anything from training staff to use new tools safely and understand the types of security threats they may face, to putting effective backup strategies in place so that any lost data is easily recoverable. For this, companies need to know where critical data lays, securely back it up and isolate it from the broader network, so that if an attack does take place, the company's back-up recovery – and its critical data – will not be compromised.
It's imperative to invest in tech now to be able to keep up with the market, and the budget won't last forever. If the last year has taught companies anything, it's that we truly don't know what the future holds, so it's even more important to get it right when it comes to tech investment. Businesses need to make sure they outline their key priority areas, don't overspend, and prioritise security to ensure digital transformation is a success.