The past 12 months, we have experienced the incredible advancement and wide availability of generative AI; witnessed the effects of economic headwinds particularly in the tech market, and continued to have a significant portion of our population work remotely, or in a hybrid setting. All of these trends have ripple effects that CIOs must be prepared to handle in the coming year.
The following are four of my top IT predictions for 2024 and my advice for CIOs and tech leaders to make informed decisions in response to these trends.
Expect an Assessment of Vendor Solutions and Tooling
We are entering a new year in a suboptimal economic environment.
Funding for tech startups will be slow, and not all companies will survive – even those that provide unique, innovative, and effective IT solutions. Many startups were funded in 2020 and 2021 when much more capital was available.
Budgets have tightened for IT organizations, non-critical solutions have been cut, subscriptions have been canceled, etc. That has resulted in customer churn for many companies that are not already cash-flow positive, and these businesses don’t have access to new funding due to the lack of available capital.
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Over the next twelve months, some of the vendors enterprises are relying on today will fold – or they will be acquired – and that is going to disrupt CIOs and IT managers. It is critical to take careful inventory of all IT solutions your company currently relies on and assess whether each tool is a necessity, or a “nice-to-have.” If it’s a must-have, then IT teams will need to compile research on suitable alternatives and their costs, to be prepared in case the vendor disappears.
IT teams will want to have this list of acceptable alternatives ready and be prepared to make a switch in a relatively short amount of time.
There are several considerations when determining what among your tech stack is an essential vs. a “nice-to-have.” For example, strategic platforms that support sales, marketing, payroll, etc. are critical. Other tools such as niche sales forecasting tools are less critical. If these were to disappear in 2024, they likely wouldn’t be at the top of the list to replace them. Every business is different and must conduct their own assessments of IT tools to determine what needs a contingency plan, and what it could simply do without.
Even with this less-than-rosy economic outlook and what it will mean for many tech startups, organizations should move forward with strategic technology adoptions and initiatives that will provide meaningful value.
IT innovation is key to driving improved efficiencies and productivity, so this is not a time to be hesitant. Before taking on new projects, IT leaders need to carefully consider the task at hand and whether internal resources should be dedicated to achieving the stated goals or if specialized, outside vendors would be the more economical choice. Is it a core competency, and should you do it yourself? Lean on vendors, partners, and professional services organizations for projects unless you believe it’s your core competency.
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Get Ready for AI, but Beware of AI Marketing Hype
With the launch of ChatGPT at the end of 2022, 2023 ushered in peak hype around AI. Vendors rapidly reacted to the stunning user adoption rates of ChatGPT by introducing their own versions of “generative AI” into their software, whether it involved real machine learning, LLMs, NLP, etc. – or if it was all smoke, mirrors, and buzzwords. There are some legitimate and very exciting uses of generative AI, but some marketers would lead you to believe its powers are far more ubiquitous than it really is – at least for the moment.
As a result, in 2024 you’ll need to review your vendors that claim to use AI to understand what type of AI they are using, what data is being fed into their systems, and how that data is being handled. Third-party vendor assessments should require an understanding of what generative AI models (open vs. closed) and what iterations of the model (GPT-3.5, GPT4) are being used. Make sure your data is not being used to train a public model, which could create data privacy risks. In evaluating any new potential tech solution, IT teams must also consider how the solution will impact the overall process. Is it simplifying a process, or adding unnecessary complications? If the latter, best to think twice.
Additionally, before adopting any new technologies and solutions that claim to use generative AI, IT leaders must carefully consider how this aligns with existing challenges or goals. Where are your inefficiencies? What are your core business goals? If a flashy new generative AI solution doesn’t serve a specific and meaningful purpose, best to put it back on the shelf. Don’t let technology wag the dog. Find the real business problem first, then pursue the proper solution.
Controlling Sprawling SaaS and Shadow IT Will Reduce Waste, Cut Costs
Both MSP and internal IT teams will face a similar set of issues that have emerged since the rapid digital transformation that arose during the global COVID-19 pandemic.
Starting in 2020, organizations moved quickly to remote-first and hybrid workforces. As a result, they adopted many new cloud and SaaS technologies to make their businesses work in the new normal.
Now that the dust has settled and organizations are starting to have a consistent work environment (whatever that may look like for each company), IT teams must take stock of any new applications that were adopted through shadow IT or that were bought as a knee-jerk reaction to the pandemic but have not actually been put to good use in the months and years since. IT leaders must have a complete and thorough understanding of all SaaS tools in use in their environment – regardless of whether they were purchased through the proper channels, bought independently by individual employees with a corporate credit card, or are free subscriptions for SaaS services.
An excellent example is Zoom or similar video-conferencing tools.
Almost all organizations today rely on such a service, but oftentimes the subscriptions are not centralized. Some employees may be using their own independent, free-to-use version, while others are using a company-paid-for licensed version. This is just one example of hundreds of different types of SaaS services that exist within a company’s IT environment.
Another consideration is to evaluate your vendors and identify if those vendors offer additional services or functionality that you’re currently getting elsewhere. Consolidation is critical to control costs and improve efficiencies. It’s often more advantageous to use a few preferred vendors for multiple services rather than individual point products from countless different service providers.
IT leaders must understand what SaaS solutions are being used, what is being wasted, and what is driving their business effectively. According to Gartner, about 25% of SaaS licenses are wasted*, so identifying and right-sizing those costs will be critical for organizations that are looking to trim budgets.
*Gartner Market Guide for SaaS Management Platforms, Dec. 2022
Third-Party Data Sharing Will Raise Risks of Security Breaches
More third-party SaaS vendors and cloud platforms are increasingly involved in security incidents. These vendors are creating a compounding and growing set of accessible company information on the Dark Web, which causes a cascading effect. The more information available, the more likely that information can be used to breach an organization. In this environment, having an accurate inventory of what systems are being used by your organization becomes critical for maintaining operational efficiency, and also to help identify all your risks related to third-party suppliers and service attacks.
In the digital world that we all live in, data flows within and between just about every service we use. Far too often, when a breach happens, security teams and IT leaders don’t know their own exposure in terms of corporate data and assets until it is too late. It’s critical to understand all the risk factors, and follow the best practices for security, training, and compliance. In the case of homeowners, having a fire extinguisher and an alarm system are the best practices for safety and security. That doesn’t mean you won’t experience a fire or break-in, but your odds are much better when you can make continual progress to maintain strong compliance and security frameworks. If you take the necessary steps and follow best practices, you will lower your attack surface.
These four trends will have major impacts not only on the costs of your IT program but also on security and productivity as well.
