Navigating Economic Concerns: 5 Strategies for Technology Executives
We are all facing a confluence of circumstances that are difficult to tease apart and challenging to manage, including pressures to accelerate digital transformation, supply chain disruptions, rising interest rates and costs, and ongoing labor shortages.
Here are five digital transformation strategies to help you make the tough decisions about technology strategy and investment.
1. Lean into your Agile practice for flexibility and speed
Agile adoption within software development teams increased from 37% in 2020 to 86% in 2021 (State of Agile). It’s not hard to understand what may have driven this significant trend: Agile is all about the early and continuous delivery of value to customers and to the business. Agile delivery can speed time to market by 40% or more. When customer and business requirements are changing sometimes by the day or even hour, flexibility and speed are crucial. With an emphasis on consistent and transparent communications across departments, Agile approaches can also help teams stay in sync when things are changing rapidly. The Agile methodology positively impacts productivity and morale, which can, in turn, help you retain your top talent. Continuing to invest time and resources into your own Agile transformation strategy can, with disciplined practice, deliver business outcomes that position your company to adapt to any economic environment.
2. Ensure ongoing alignment with business priorities
Linking business strategy to execution, roadmaps are a crucial tool in a modern development and delivery approach such as Agile. Roadmaps can be accelerated or slowed down as needed. Evaluate your roadmaps against business priorities whenever things are changing rapidly (and regularly, as part of an established Agile process). For example, assess roadmaps when the competitive landscape shifts as new competitors or new technologies come into play; when the economic landscape tilts; when customer needs or preferences change; or when your company is assessing new markets or acquisitions.
What adjustments could better support the business’ response to known or possible supply chain issues, shifts in workplace policies such as remote and hybrid work, or changing customer requirements? Are there opportunities to adapt existing products to serve new markets or models the business may be targeting?
3. Transform costs into business value
Increasing efficiency is always a worthwhile focus, freeing up resources for tasks that add more value to the business and opening budget to invest in higher-value digital transformation strategies. In the 2022 State of the CIO survey, 46% of CIOs rank increasing operational efficiency at the top of their agenda. But technology leaders aren’t stopping there: they’re also investing in initiatives that transform costs into business value, such as improving customer experience (42%) and increasing employee productivity (27%). Examples include:
- Investing in Artificial Intelligence to automate processes that slow the business down or keep high-value people from staying focused on business-critical tasks
- Investing in integrations to solve issues that are causing friction
- Fine-tuning cybersecurity completing a technology project that was started during the pandemic and never revisited.
4. Proactively manage tech debt
Forrester predicts that the rapid acceleration of technology adoption driven by the pandemic will worsen tech debt by as much as 60%. Not all tech debt is bad, of course, and tech debt may be increasingly acceptable as businesses rely more and more on technology to compete and thrive. But more than half of the companies in the Software AG Situation Report (56%) said that business requirements related to the pandemic forced rapid action, and 78% report a corresponding increase in technical debt.
Evaluating your tech debt backlog in light of new or evolving business requirements can identify opportunities to pay down debt that may pose significant business risk, such as shadow APIs or sluggish code. At the same time, you can illuminate opportunities to prioritize future digital transformation strategy investments, such as cloud migrations that increase scalability and cost-effectiveness, or sourcing models that enable you to benefit from a provider’s AI skills and technologies without incurring more tech debt.
5. Look outside the office walls to support your digital transformation initiatives
Just as most companies are investing heavily in technology-fueled digital transformation strategies, technology leaders face fierce competition for the top tech talent they need. Even before the post-pandemic Great Resignation, there was a deficit of nearly 1 million IT jobs. The technology sector has been one of the hardest hit by labor shortages, with a 4.5% increase in resignations in 2021. And the impact of global macroeconomic trends across technology has been uneven. Despite recent, sizable layoffs at companies like Amazon, Netflix, and Facebook, the unemployment rate for tech jobs in July 2022 was just 1.7%, roughly half the overall U.S. unemployment rate of 3.5%. Gartner notes that just 29% of IT workers have high intent to stay with their current employer. Meanwhile, inflationary pressures are driving costs up, including for labor.
Whether skilled developer shortages and the Great Resignation threaten to slow you down or you need to contain costs and freeze hiring but still make progress, working with a trusted nearshoring partner can keep your business-critical projects moving forward on time and budget. When you’re considering a partner, evaluate the skills and experience of the individual contributors they can provide, as well as the efficiencies that can be gained by the outsourced team’s location and Agile history. You should also look deeper at how a partner will complement your business environment and culture. Partners on your shortlist should be proven companies who will invest in getting to know your software development model and business goals, while adapting with you as your business evolves.
Partnering for successful digital transformation with Gorilla Logic
When you’re building software critical to business outcomes and challenged by rapidly evolving economic conditions and business requirements, Gorilla Logic is a partner you can count on, no matter what curve balls may come your way. As a nearshore custom software development company, our flexible engagement models and skilled teams that work efficiently in your time zone and share your language mean you can scale up current teams and make progress on your complex, full-stack, web, and mobile applications fast. We can help you navigate through uncertainty to solve problems, uncover opportunities, and accelerate your time to success.