The IT industry is thriving and expanding globally. Existing and potential growth in the IT market is undeniable, as is the industry’s seemingly unending and increasingly rapid innovation.
The website ZDNet, referring to a recent Forrester research report, stated, “Forrester published its mid-year global tech market outlook for 2017 and 2018. In constant currencies, we project that global purchases of technology software, hardware, and services by businesses and governments will grow by 3.4 percent in 2017 and by 4 percent in 2018.”
Some industry experts have an even rosier IT growth projection, predicting the information tech sector could see 5-7% growth in 2018.
Rapid growth, however, is a double-edged sword for many IT companies. Perpetual pressure to adopt new complexities, to constantly innovate and adjust and manage enormous change are 3 big reasons established IT companies could be in trouble in 2018 and beyond. Let’s dig into some of the biggest challenges facing IT companies in 2018 and in the near future.
Managing Regulatory and Security Changes
The EU Global Data Protection Regulation (GDPR), enacted in May of 2018, is a new group of laws designed to standardize data privacy across Europe, including data that flows across national boundaries. GDPR is just the first sign of a global push for greater data security. While the U.S. is lagging behind in enacting more stringent technology and data regulations, the Facebook-Cambridge Analytica scandal and other data sharing improprieties have created momentum among lawmakers to follow in the European Union’s footsteps.
Ed Markey, Senator from Massachusetts, and Connecticut Senator Richard Blumenthal introduced the CONSENT (Customer Online Notification for Stopping Edge-provider Network Transgressions) Act this year. The CONSENT Act aims to require Edge-providers or those that provide online services, to provide clearer opt-in permissions from users to use, sell or share their data. While the current administration’s penchant for deregulation will likely see acts like this not get passed, a change of power in the upcoming midterm elections could see more GDPR-like legislation moving through the House and Senate.
Changes will also continue to rapidly emerge and morph on the cybersecurity front. Cyber challenges are a topic for another blog, but being equipped and prepared to handle existing and future security challenges is a must for any IT company to survive the next decade.
What does this mean for IT companies looking ahead? IT companies that are staffed and prepared to handle major regulatory paradigm and cybersecurity shifts as well as ongoing, smaller changes will be more trusted and will thrive. Those that cannot keep pace will be in big trouble both from a customer retention standpoint and even possibly from lawsuits from clients and their customers.
Moving Beyond the Reactionary
Technology evolves so rapidly it almost goes unnoticed. By most IT expert accounts, the IT industry is facing another moment of disruption with the impending ascension and normalization of artificial intelligence, the Internet of Things (IoT) and robotics.
The fact is that the more vulnerable IT companies take a reactionary approach to counter the extraordinarily rapid pace of industry innovation. This is often inevitable because very few IT companies have the budget or human capital or both to react on a large scale to an evolving industry and changing customer expectations.
Adjusting to change is always difficult, but it is always more difficult when it’s reactive rather than proactive. IT firms that continue to simply react to the latest innovation or IT trend will be in trouble in 2018 and beyond. Those IT companies that proactively look to the future will survive and continue to grow.
“CEOs and boardrooms across the economy are waking up to the fact that this approach is often inadequate in the face of rapidly changing industry and customer dynamics. This doesn’t necessarily mean chasing the latest shiny object or moonshot idea, but rather embracing an organizational mindset of proactively planning for a digital future,” according to the website CompTIA.
Being proactive and always thinking of the future are particularly important to keeping apace of regulatory shifts, security threats and potentially disruptive tech innovations. One of the biggest threats to IT firms is being myopic and failing to create an agile foundation that can handle future change.
Finding and Keeping Talent
The days of a few IT staff members being able to handle a host of clients in an increasingly complex market are gone. The IT landscape has become so vast, complex and variegated that is has killed the proverbial IT unicorn.
That means increased specialization and larger teams that are agile enough as a collective to stay abreast of the latest tech, software, security threats and regulatory changes. IT recruiting and retention is and will remain a tremendous challenge for information technology companies, especially those that are smaller to mid-sized.
- Adding to this challenge is a highly competitive IT job market, low unemployment and a growing population of younger workers pursuing self-employment. Talented IT professionals have all the power at the moment.
- IT firms that struggle to attract and retain top IT talent will certainly be in trouble, as the demands of the industry and of increasingly skeptical and well informed customers and clients will continue to grow.
- IT companies that invest only in marketing to potential new clients will struggle. Those that embrace a more robust digital marketing approach that includes recruiting and culture promotion will attract and be able to retain more talent.
- According to a 2017 survey by Robert Walters, “Almost 6 out of 10 senior technology professionals surveyed said that the biggest challenge they have encountered is a lack of candidates with the required skill sets.” So, there is not only power in the hands of the talented, but a scarcity of talent overall within the traditional IT hiring pool.
Again, this is where IT companies that are forward thinking and innovative in areas outside of tech can really differentiate themselves. Increasing investment in marketing and recruiting, developing and promoting an attractive, flexible work culture and seeking talent in non-traditional places could be a lifesaver for some information technology businesses.
Managing regulatory and security challenges, adopting a proactive, forward-thinking approach to IT and hiring and keeping the right talent are three broad-brush challenges facing all IT organizations.
Each challenge has many layers of nuance and complexity but all play into an increasingly pervasive technology narrative of nurturing and protecting trust. The IT firms that create and protect trust by consistently performing and continually learning in a chaotic and constantly transforming IT eco-system will survive and thrive for the foreseeable future.