Technology trends CIOs should look out for in 2021

The technology industry was one of the least (negatively) affected by global events last year. The economic impact was largely indirect as most other sectors grappled with risk, job and capital preservation. Regardless, there was upheaval in many areas of the IT landscape, changes and pressures which have set the scene for new opportunities in 2021.

Acceleration of digital strategies all over the world, prioritising customer experience

Even as a vaccine seems eminent, social distancing will not be going away. This environment places tremendous pressure on businesses to offer everything digitally, or at least remotely. Many were already on this path, with either partial service digitisation across the board, or some parts of the portfolio offered digitally.

These strategies and tactics will be accelerated in the face of dramatic competition, and the sudden need for customers to engage in (digital) ways they simply wouldn’t have done before. There is a whole generation of customers who have no choice now but to embrace digital channels. If you don’t offer these channels, it won’t be long before those customers go elsewhere.

The risk of moving too slowly here is that customers lost this year won’t return, and readiness can turn to willingness or preference, even once the storm has passed and we’re all allowed back in retail stores, branches, and other face-to-face scenarios.

New generation software products offering huge competition to established giants

Probably the only one which has nothing to do with world events, but rather the inevitable result of innovation and competition in the software world.

Since the 80s and 90s, there have been some areas in a large business where it just made sense to use off-the-shelf tools. ERP, CRM, HCM (human capital management), SCM (procurement), payroll and so on. A few years ago, there were only a handful of meaningful offerings due to the complexity of these tools, and the advantages gained from time in the market of incumbents from the big vendors (Oracle, SAP, Microsoft, IBM and the like).

These tables are starting to turn, and this could be a pivotal year for this space. There are a few key areas where fresh competition are starting to really take market share. The difference this is that the quality, fit and user experience for many of these tools is too good to ignore any longer, and the pain of implementation or change starts to feel worth it.

As some of the large old platforms have languished in dated UI, slow performance and limited ability to integrate with the rest of the enterprise, so too have many new products rounded out in feature breadth, and for the first time offer properly compelling alternatives.

Increasing demand for major cloud platforms and maturing of cloud-native service offerings

Spurred on by the underlying demand for simplified hosting and quick-to-market platforms, the major cloud platforms are well positioned as beneficiaries in 2021. Time to market is really the big factor driving participants to these platforms in droves, as part of rapid digitisation strategies, or new top-to-bottom tech products. There is no time to think or plan alternatives that could compete with the simplicity, reach and cost profile.

This could mean an upwards shift in pricing if demand starts to really outstrip the pace of data centre availability (both capacity and region), although hopefully competition means more efforts to capitalise on the growing market, keeping pricing low.

The thing to look out for here is how the platforms work to lock-in customers and differentiate their platforms from the others, by driving users towards their own Cloud Native and SaaS offerings. Google Cloud, Microsoft Azure and Amazon Web Services (AWS) as the big ones showed some drift in their offerings, if not in concept but in compatibility.

There will be opportunity to exploit these often-excellent services, but beware of vendor lock-in.

Team distribution and the rise of remote development methodologies

Globally, work from home has started to become widely adopted as the norm – and not just because of health and safety. For most departments and organisations, productivity survived – perhaps even climbing. Inherently remote teams opens the door to recruitment of scarce talent in other cities, regions and even continents.

Similarly, technology services takes another step towards full globalisation. It is far more conceivable to augment or outsource when your own team is distributed anyway. As organisations have been forced to get used to collaborating with each other remotely, that mental barrier against engaging with service providers across borders dissolves.

It follows then that there is a small window of advantage for organisations and teams who had a previously established and practiced remote working environment and can properly leverage it.

Still, this way of work is new, and presents hidden challenges in culture, process and communication. Some of which might only become visible during the year ahead once momentum has truly worn off. Most likely, the winners this year will be those working to strike the right balance.

Ultimately, these are some of the major themes which are likely to play out in the year ahead and create either headache or opportunity for the It executive. It is worth the time to cross-check with organisational and IT strategy. Are your teams well positioned to handle the demand for digital channels, and aware of the modern software platforms and cloud-native options out there? Will your culture and operating model handle a prolonged or hybrid remote working scenario?

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