Rebuilding for Resiliency: 2022 Predictions
This year, we’ve seen technology become a powerful enabler to innovate, drive new revenue streams, and shock-proof supply chains. However, as we near the end of 2021, the narrative is changing from investing for agility to investment for resilience. For much of the last two years, leaders have spent their efforts on short-term tech decisions and reacting to the rapidly shifting market. In 2022 and beyond, we will see this transitioning back to solving long-term challenges, with a focus on rebuilding a more sustainable and resilient future. In my second predictions article, I explore three technology trends I expect to see more of as we adjust to the new normal.
Increasing M&A
A hot M&A market should get even hotter in 2022, evidenced by the availability of assets, abundant capital, and accessibility of both debt and equity capital markets. For organizations that are keen to take advantage of pragmatic asset pricing, opportunities for investments will be plentiful.
This boom will be particularly evident in the tech space. According to a recent survey by law firm Morrison & Foerster, organizations aim to use tech M&A deals as a vehicle for growth, primarily as a need to scale to “increase competitiveness.” Indeed, many tech leaders have been slow in building skills for the future, resulting in a significant talent deficit. For companies looking to scale up new digital initiatives, such as machine learning and robotic process automation, a quicker way to market will be strategic acquisitions to complement or lead their go-to-market – allowing them to acquire the necessary digital assets and skills at pace.
Reorienting technology strategies
Companies across all industries have accelerated digital transformation as a reaction to the pandemic, investing in solutions that can facilitate the new virtual environment. In 2021, this often involved chasing the latest disruptive technologies rather than focusing on strategic goals. While these investments have short-term benefits, most firms will see long-term pains with inflated tech debt; it can be easy to waste money in such programs if they aren’t clearly aligned with long-term business value drivers.
In 2022, I expect companies to take a step back to reassess their technology strategies, taking a clear look at their spending to better understand where to go next: reorienting their approach so that it focuses on the “why” as well as the “how”. This will remain particularly true as cloud computing reaches new heights, relieving organizations of the need to invest in data centers and enabling them to deploy AI and IoT infrastructure without owning any proprietary software. Cloud empowers IT leaders to gain all the benefits of next-gen tech, while reducing capital investment in software that doesn’t drive competitive advantage.
Continued supply chain disruption
Mounting pressure on supply chains is undeniably a threat to domestic and corporate growth as the pandemic ushered in 18 months of disruption. But Covid-19 isn’t the only thing disrupting supply chains; climate change, inflation and Brexit legislation have also played a part in halting post-crisis recovery. No one knows what challenges will arise next year, but I predict that this heightened volatility and supply chain complexity will continue throughout 2022.
As such, it will remain critical for companies to embrace digitization and automation to optimize their supply chains and build inherent resiliency into their systems. As noted by Simon Ellis, program vice president, Global Supply Chain Strategies at IDC, the supply chain must continue its journey of almost unparalleled levels of change with digital transformation at the center of efforts to be resilient to further disruption. Advanced technology will also be critical for supply chain managers wishing to make their operations more sustainable, as natural resources are in finite supply and organizations are under pressure to align with net-zero targets.
Looking forward, it is the need for resilience that will drive the business case for most emerging technology deployments. Whether that’s gaining future-fit talent through smart digital acquisitions, reorienting tech spend to take advantage of cloud innovations, or developing shock-proof supply chains, 2022 will be the year we rebuild for resiliency.