As inflationary rises squeeze economies across the world, CIOs are under pressure. Not only to do more with less. But to act now – making smart decisions that manage impact on workforces, while using tech to accelerate digital outcomes.
A global problem
Inflationary rises are unprecedented. This, after two years of a global pandemic that drove a surge in energy and food prices. Then, there’s the war in Ukraine, changing worker preferences and cross border movements. All this, topped by a supply bottleneck in semi-conductors – a vital ingredient for the world’s motor industry.
While reasons behind the global rise in bills may differ, it’s happening everywhere. Among G7 economies, food and inflation rises account for the 65-80% global spike in bills. And, in the UK (even if you remove volatile food and energy drivers), underlying inflation is double that of the Bank of England’s expected target.
An inflationary throwback.
Headline inflation rates like these are usually a once in a generation event. In fact, today’s UK YoY CPI inflation rate hasn’t been recorded at that level since 1992.
Yet, here we are. Again. And CIOs need to work out how to tackle inflation in tech.
Do CIOs have more than three choices?
As individuals grapple with the impact of inflation, boardroom execs are too. CIOs need to understand its impact on organisations. And it’ll mean looking at inflation through a business lens. According to Gartner, every CIO has three options to keep pace with inflation:
1. Spend the same, do less.
2. Spend more, do the same.
3. Try to spend the same, do the same
Organisations that successfully enable business technologists are 2.6 times more likely to accelerate digital business outcomes
We believe there’s a 4th choice — where you get to spend less and do more. And that can be done in a number of ways. To tackle inflation in tech, CIOs must look at current technology strategies in light of inflationary pressures. So, if optimisation is the goal, they’ll need to make existing infrastructure do more for longer and stretch talent to be more productive. Here’s how:
1. Limit risk in IT contracts
As CIOs plan and prepare for price rises affecting IT budgets, their first stop should be pinpointing IT contracts linked to specific inflation indexes such as CPI. Those terms could leave them exposed to dramatic spikes in cost.
Takeaway: CIOs should compile a list and negotiate cost protection. Vendors worth their salt would almost certainly favour long term relationships. For less strategic vendors, explore your options and shift spending in favour of maximised returns.
2. Bend reality through proactive leadership
Rather that reacting, proactive CIOs need to think creatively when aligning IT spend with priority business outcomes. Like growing business, retaining customers and reducing costs. You could, for example, automate more processes. Use RPA to automate and speed up data analysis tasks that support sound financial decisions (especially during times of uncertainty).
Takeaway: AUTOMATION is the message. From company-wide RPA, or optimising processes – there’s an opportunity. Then, make sure you communicate those decisions widely.
3. Expand digital accountability
Gartner highlighted key tech-related practices to improve composability. On CIO agendas across the UK, there’s a big opportunity to use platform tools, share knowledge and expand accountability for digital outcomes.
Takeaway: Digital responsibility is shifting away from being an IT problem to a business-wide priority.
4. Change the way you look at talent
Hiring and retaining talent is difficult for most businesses – where only 29% of IT workers show a high intent to stay. Yet tech is (and always will be) needed for everyday work and differentiation. And skilled developers are numbered and expensive.
Takeaway: CIOs and CXOs must work together – to define business-critical skills (rather than roles). Then find ways to embed learning into every role to help achieve those business outcomes. Rather than expanding your IT workforce, empower your business technologists (the people who report outside IT).
5. Widen your talent pool
Where a limited market of software developers existed before, you can shape a larger base of internal, self-taught people with different skills and talents. That’s easily done by democratising learning via low-code or no-code, augmented analytics, data science and machine learning platforms and tools.
The result: more cost-effective talent from which to draw. You’ll also attract a new market – of non-traditional talent, equipped with the skills you need, growing gender and race diversity. Win-win.
Takeaway: Three quarters of business technologists already use automation, integration, app development or data science and AI tools in their daily work. Empower them with low-code.
Top tips for tackling inflation in tech
- Cost reduction must be strategic – not reactive.
- Transformation happens when you’re fully federated.
- Widen talent pools and empower existing staff through learning digital skills.
- Only automate processes that contribute to business outcomes.
- Get quick wins and start with low-code and RPA skills.
18 months ago, the race towards digitalisation accelerated at breakneck speed. In this blog we look at the evolving role of the CIO and CTO in their mission to transform.