Strategic IT Planning for the ‘New Normal’ in 2022

Executive Summary

With the anticipated emergence of a post-pandemic world in 2022, Enterprises have to start planning for the ‘new normal’. Our recommendations are to focus on

  • fewer, strategic technology-led innovations to build strong foundations for ‘future-ready cost structures,
  • not lose cost discipline while pursuing agility despite the fragmentation of the IT Operating Model
  • Invest in Employee Talent; and, with physical channels making a comeback, enterprises need to create ‘phygital’ experiences for customers

 

How is the ‘New Normal’ shaping up?

As with many new terms, the term ‘New Normal’ implies a lot yet means so little. For this article, I wanted to clarify what we see as the 3 key characteristics of this expression.

The ‘New Normal’ is hybrid, agile and resilient.

  • By Hybrid, it applies to ways of working within workplaces, and hybrid cloud architectures that cover IT deployments on-premises and cloud environments.
  • Agile refers to changes to the enterprises operating model to ensure it can respond to market events with much more speed, and to new ways of organising teams and collaboration typically through a deeper infusion of digital and human.
  • By Resilient, we refer to diversified supply chains with multi-location redundancy, and to robust IT infrastructure with enhanced security.

 

3 expectations from 2022

As with all planning, we need to anticipate the macro environment for 2022. The last 18 months has demonstrated that it is futile to predict. So, we will steer clear of specific predictions in a climate of uncertainty.

Expectation #1: The consensus expectations for economic growth in the UK is very high with above average expectations for the rest of the world.

The UK and the world’s economies had taken a hammering during the pandemic. We have started seeing early signs that unless there’s a major escalation in cases, the worst appears to be behind us. There appears to be a direct correlation between vaccination rates and the projected economic growth rates – with the UK expected to experience the biggest economic boom in nearly 70 years, according to some reports.

However, the world seems to be running low on everything – ranging from semiconductors to commodities. This is having a direct impact on inflation with the UK exceeding its 2% target for the most recent quarter. We can continue to expect a sustained increase in inflation to increase interest rates which will impact some of the availability of cheap money that the world appears to be awash with.

Expectation #2: While many companies are adopting flexibility in work locations, it appears the jury is still out on the longer-term adoption of this practice.

There is a lot that’s been written on hybrid workplaces – a term that refers to companies offering their employees the flexibility of working from home and an office location. However, when you take a step back, you see a lot of opposing views even within the same industry. For example, while the CEO of Goldman Sachs called the WFH trend ‘an aberration’ and asked staff to return to the office full-time, the CEO of Deutsche Bank (a competitor) has offered a lot more flexibility to their staff.

As per a recent McKinsey report, although 90% of companies intend to offer hybrid working as an option to their employees, most of them are yet to start working on detailed plans on how to implement such a policy.

In our opinion, the jury is still out on this trend, and we will only see the dust settle in 2 years.

Expectation #3: While high rates of vaccination in some countries providing a reason for being cautiously optimistic, there is still a lot unknown about this virus – and substantial risks remain.

One can be cautiously optimistic about reducing rates of infection amongst vaccinated countries, there is still a lot unknown about the virus. For example, we still don’t know if the vaccine can hold its ground against the rapid variant mutations; neither are we aware of the patterns of waning immunity.

There are constant delays to relaxation of all restrictions – and a constant delay to a return to some degree of normalcy. As per a Gartner survey, most Executives expected a return to normal towards Q4 ’20, however, this had previously been deferred by 3-6 months with the most recent expectations of the return to normal towards the end of 2021 / early 2022.

 

A recap of the strategic IT themes for 2020 and 2021

Before we look at the strategic themes for 2022, we must reflect on the journey that the IT Department has taken over last 18 months. Since the emergence of COVID19, the IT Department stepped in as ‘heroes’ to help ensure the stability of the business and implement tactical cost measures. In 2021, they further invested in workplace technologies and improved the resilience and security of IT infrastructure.

We believe the the core theme of 2022 is to get future-ready for a post-pandemic world.

 

“Future-ready businesses are twice as efficient and thrice as profitable” – Accenture

 

3 priorities while planning for 2022

Priority #1: Focus on fewer, strategic technology-led innovations to build strong foundations for ‘future-ready cost structures

I’ve personally grown to despise the term “Digital Transformation” as it feels like a marketing buzzword. One good way to think of Digital Transformation is to think of it in its benefits – the transformation of the cost structure, improving the quality and speed of decisions and responsiveness to market conditions, and the transformation of its customer and employee experiences.

 

I understand that many enterprises continue to remain under severe cost pressures while the demands on Technology are significant. It in this environment it is better to take fewer more thoughtful bets instead of taking many half-hearted initiatives.