Upping your digital game, reskilling IT, and revamping supply chains should be on tap, according to a new Deloitte industry outlook report.
CIOs have a formidable to-do list this year as they work to help their organizations recover from the COVID-19 pandemic and position themselves for future growth and competitive advantage.
Three areas they should focus on are redoubling digital transformation efforts, reorient and reskill their workforce, and reexamine where and how manufacturing occurs, according to Deloitte's 2021 Technology Industry Outlook.
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Accelerating digital transformation
Companies are working to improve their agility and flexibility, increase automation, and move to more real-time operations, the report said. Accelerating digital transformation efforts means they need to improve efforts in cloud infrastructure, data and analytics capabilities, and cybersecurity.
Digital transformation should be thought of as a journey and if it starts at zero and ends at 10, most organizations are between two and three in their efforts, said Paul Silverglate, vice chairman and US technology sector leader at Deloitte.
"I love the analogy 'The early bird gets the worm but the second mouse gets the cheese,'" Silverglate said. "I'm wondering if some companies want to be the mouse."
Many companies are already taking advantage of aspects of digital transformation by moving to the cloud and utilizing the as-a-service model to further explore what can be done in areas like AI and robotic process automation (RPA), he said.
The report recommends improving cloud infrastructure, data and analytics capabilities, cybersecurity, and business model transformation.
Reorienting and reskilling the workforce
As companies reorient their workforces, they're also exploring ways to harness advanced technologies like AI to streamline tasks and augment capabilities, the report said. "As a result, companies should focus on creating more support and development opportunities for employees, including reskilling key portions of their workforces."
Finding IT talent and reskilling the workforce remains a big challenge, Silverglate said. People who have both tech and so-called soft skills remain elusive.
"That challenge, that multifaceted talent, is getting harder to find—like the renaissance person with deep technology knowledge who also can be empathetic to what users need is getting very scarce," he said.
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Organizations should be looking for both a "plumber" and a marketer. The plumber understands the nuts and bolts and where the weak spots are, and the marketer understands the narrative and can work with the business units and put forth their needs, Silverglate said.
"One of the benefits of digital transformation is a more centralized usage of information and data so there's one version of the truth and you don't have all these functional areas with shadow IT."
Organizations also need to consider what is the right balance of in-person and remote work post-pandemic. Other considerations: How will culture, office space, and technology needs, and approach to travel need to change to ensure both productivity and safety (physical and cyber), and what can be done to enhance employee engagement and well-being in the long term, the Deloitte report said.
One of the things Silverglate is surprised about is a lack of readiness for new technologies. For example, Deloitte's Global Human Capital Trends survey showed 41% of executives said that building workforce capability through upskilling, reskilling, and mobility is one of the most important actions they are taking to transform work. Yet, only 17% say their workers are very ready to adapt, reskill, and assume new roles.
"So there's a big gap between beliefs of how important this tech is and how ready they are to take advantage of it," he said.
Another surprise was the struggle their clients have creating a strategy for migrating to the cloud. "When we talk with clients, that's one of the big requests and demands of us—can you help us pull together a comprehensive strategy and take our current environment and migrate to a cloud environment in a secure, confident way?" Silverglate said. Likening that struggle to a toy Slinky, he added, "You want there to be a little tension in the Slinky but I feel like there's a lot of tension."
Reexamining where and how manufacturing happens
Supply chains must be upgraded for greater transparency and resiliency. Transforming supply chains into digital supply networks will improve visibility, the Deloitte report said. As they reexamine where and how manufacturing happens, the focus should be on improving transparency, flexibility, and resiliency, the report said.
Another measure to take is diversifying suppliers and manufacturing capabilities to improve adaptability and resilience.
Silverglate believes manufacturing is starting to pick up because many industries have had to tighten their belts. "Money is cheap right now, interest rates are low and demand has been pent up for 12 to 16 months," he said, so industries such as automotive and travel should be increasingly enhancing their supply chains because they're "competing with companies that are rolling and transforming through the pandemic."
The pandemic revealed weakness in supply chains and having to wait on different sources for information. Now there is a "desire to spread geographic risk" and not have suppliers in just one or two countries since that proved unreliable in terms of getting products out at the height of the pandemic, he noted.
"With a new administration, new regulations will be considered, and I think companies are a lot more astute these days around looking at supply chain concentration and regulatory risk and customs risk," Silverglate said. "That will continue for the next few years, especially as we start to figure out where challenges will arise from the change in administration."
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