Composition will be a key pillar of the business strategy. By 2023, organizations that have adopted a composable approach will outpace the competition by 80% in the speed of implementing new features, according to research that identified the seven business digital transformation trends for 2023 and beyond.
The drive for composable architectures is based on organizations investing in total experience strategies. In order to drive innovation, these organizations must attract the right people, which is becoming increasingly difficult in this scarce talent landscape.
Research reveals that many senior IT leaders are now measured against employee experience (46%), almost as high as that measured against customer experience (48%).
In 2023, a growing number of leading organizations will look to the total experience (TX) as a way to improve the journeys of both customers and employees, particularly in areas where they intersect.
This strategy will create superior shared experiences and drive additional business value by repurposing existing core technology investments for key customer and employee experience initiatives.
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By 2026, Gartner predicts that 60% of large companies will use TX to transform their business models to achieve “global levels of customer and employee advocacy.” By 2024, organizations that offer total experience will outperform competitors by 25% in satisfaction measures for both CX and EX.
Research shows that in order to deliver a high total experience, there is a need for improved collaborative processes between IT teams and business teams. IT is no longer just a technology enabler; Information technology now solves business-critical problems, addresses key business goals, and helps develop competitive advantages with technology. This transformation requires IT and business teams to work in close collaboration to achieve strategic goals. However, 98% of IT leaders said work processes between business and IT teams can be improved.
The data needed to create seamless digital experiences often exists across multiple systems. The average organization now uses 976 different applications, but many of these systems are poorly connected. The same research shows that the resulting data warehouses are a barrier to creating integrated user experiences for 90% of organizations.
The main driver for improving the overall experience will be your company’s suite of technologies. Process improvements are a major priority for IT leaders. These process improvements start with understanding the tools available to deliver the highest results with the optimal amount of time and dollar investments. Forty-six percent of senior IT leaders say making process improvements is a key priority for their organization over the next 12 months—many reporting that their existing processes are holding back progress. This drive to improve operations is particularly prevalent in the communications, media, and technology (CMT) industry (60%), as well as the public sector (52%).
Companies are scrutinizing costs now more than ever, and it’s often the largest cost a company incurs across its technology stack. With the number of employees constantly changing and the customer base evolving, companies often allow employees to adopt new technology in a decentralized way. This can solve their immediate pain, but often does not fit into the overall strategy and ultimately leads to inflated technology spending (and increased need for it). A quick way to determine these costs is through a rationalization audit of the application.
This audit can involve multiple departments, and will positively impact the bottom line from a cost and efficiency perspective if you know how and where to look for the intervening systems and technologies. It will even make your organization more secure. 2022 CIO research shows that IT leans on existing investments, rather than buying new technology – most IT leaders (72%) prefer to update or modernize existing solutions where possible, rather than replace them. With growing economic headwinds, many organizations are looking to extract additional value from their existing infrastructure rather than investing in entirely new technology.
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Here’s a three-point plan on how to implement this type of audit quickly and efficiently in the new year, but first let’s define what application rationalization from ChatGPT is:
Business application rationalization is the process of evaluating the use and value of business applications within an organization, with the goal of optimizing the use of these applications to support the business. This can include identifying and removing unnecessary or underused applications, consolidating or standardizing certain applications, and ensuring that remaining applications are used effectively and efficiently to support the business. The goal of streamlining business applications is to improve the overall efficiency and effectiveness of an organization by reducing complexity and eliminating redundant or unnecessary systems.
1. Start with your critical systems
Going through this exercise may seem difficult at first, which is why I recommend breaking this down into three components – Critical, Intermediate, and Trailing Systems. Start with the platforms your business depends on day in and day out. Get a good understanding of what is integrated and why, and make these systems the basis of your audit.
Once you have a list of three or four systems (it could be more depending on the complexity of your business), talk to the different departments to find out what applications they use, why, and what functionality they provide. Most likely there will be some overlap between your critical systems and the tools you use on a weekly basis.
Finally, audit overruns – small purchases made by various departments and employees over the years that often stop getting used to because they either can’t blend in or become outdated/obsolete after buying another tool to replace it. Tracking down the full list of these things can be difficult, so rely on your IT team to help you.
2. Know the terms of your contract
For most mid-sized companies and small and medium-sized businesses, it is very easy to track vendor contracts in a spreadsheet. Looking at the aggregate list, seeing the effective dates of contracts, and the total cost of each contract can give you a snapshot of your total cost of ownership (TCO).
Once you have a general understanding of a TCO, it’s time to list the functions and identify the problem each tool solves. And once you have a framework for the tool that does what you’re doing, you can contact your critical technology partners for further guidance and support.
3. Contact your important and strategic technology partners
It is not surprising that most major technology companies are constantly improving their products, developing new features and adding functionality through acquisitions of other companies. Why is this important? As a busy CEO, you probably don’t realize just how many features you have in your current subscriptions (especially important ones), and many times companies overpay for duplicate technologies.
Setting up a simple contract review with your strategic partners can often reveal features you didn’t know they had, allowing you to eliminate tools (and cost) that do the same job. This often results in lower total cost of ownership and greater employee efficiency because it reduces the “spinning chair” effect (using multiple tools to retrieve customer cases, data, insights, etc.).
Information technology is now measured through productivity, cost reductions and experiences. Nearly half of all senior IT leaders are now rated on employee productivity (52%), cost reduction and optimization (50%), customer (48%) and employee experience (46%). This varies between industries. For financial services and insurance, for example, 62% of senior IT leaders are measured on employee productivity. IT is also burdened with project backlogs. Three-quarters (74%) of respondents report that a backlog of projects prevents them from working on strategic initiatives. To overcome these challenges, organizations need to leverage APIs, automation, and low/no-cost tools to create connected experiences for customers and employees.
There are no IT projects, there are only business projects. What applications help your company achieve its business results? What business ventures need more investment, and which could do with less? To better understand business needs and desired outcomes, one should consider auditing application rationalization, mapping applications to project requirements, so that you can identify wasted expenditure and energies. This exercise is a team sport and can be done efficiently.
Time to review your tech stack doesn’t have to take many hours. If you follow this framework, and enable the heads of your business units to compile a list of the technology they use on a daily basis, you can get a good understanding of all the applications in use within a few days. An app audit is a great way to start the new year by decluttering, gaining a better understanding of your tech stack, and streamlining both savings and efficiency.
Co-author this article Brian FerraraSenior Account Manager for High Tech sales force