Hackett’s 2022 Technology Key Issues Research Also Finds Unusually High Boosts Expected in Tech Budgets and Staffing
Technology leaders are prepared to address the transition to virtual work and as-a-service deployment in 2022 – two of the most likely disruptive scenarios, according to new Technology Key Issues research from The Hackett Group, Inc. (NASDAQ: HCKT). However, according to the research, they lack confidence in their ability to deal with several other issues, including persistent skill shortages and the ability to develop more mature enterprise analytics capabilities that can drive business value.
The research also found that technology leaders expect to see unusually high increases in budgets and staffing in 2022. Additionally, according to the research, for the first time in five years, the rise in technology workload will be nearly matched by increases in the function’s staffing, operating budget and enterprise technology spending.
The full research, “The Technology Function Agenda: 2022 Key Issues,” is available from The Hackett Group® on a complimentary basis, with registration, at this link: https://www.thehackettgroup.com/2022-technology-key-issues-2201/. Key findings from the research include:
CIOs are Well Prepared for Two of 2022’s Most Likely Disruptive Scenarios – Technology executives cited the transition to virtual working and the as-a-service deployment model as the mostly likely disruptors to their operations. But the study found that most are actively executing plans to deal with both of these issues and companies are likely to normalize these models in 2022. Cloud-based infrastructure is a chief enabler and is expected to see a 30% growth rate in volume of infrastructure deployed in 2022, according to the research. Self-service automation is another key technology, but to be fully effective companies must cultivate design thinking and other customer-centric skills. At the same time, our research noted that it will take more than technology to enable these models. It will require changes in how people lead teams, instill and maintain culture, and how they incent and reward collaboration and innovation.
Tech Leaders are Less Well Prepared to Deal with Persistent Skills Shortages, Another Likely Disruptor – According to the research, updating technology’s talent profile and closing skills gaps is a much more problematic challenge. Only 20% of survey respondents are acting now to resolve this long-festering problem, which has been worsened over the past two years by the Great Resignation. Talent profiles and skills sets must be rapidly modernized if technology organizations hope to shift from a tactical, transactional approach to a more strategic, service-oriented and customer-facing orientation.
Maximizing Value from Data is Key, but Tech Leaders Lack Confidence – Technology executives also lack confidence in their ability to meet business goals for maximizing value from data and facilitating a mature enterprise analytics capability – bad news for decision makers impatient for faster data access and sharper insights. Data and analytics objectives make up nearly one-third of the top 10 technology priorities for 2022, and the deployment growth rates in data visualization, advanced analytics and master data management are among the highest projected for 2022. Some of the reasons for the lack of confidence include the need for commitment from diverse owners of data within the business to make progress and the fast pace at which data is growing, changing, and becoming more complex, which can outpace their ability to effectively manage it.
Digital Transformation is a Top Priority, and Rapid Development and Cloud are Now the Norm – Technology leaders are recognizing that faster time to value is critical and is key to improving resilience, speed, agility, and productivity. Digital transformation, a key path to improving time to value, remains a top enterprise objective for the second year in a row and accelerated technology adoption is expected to continue post-pandemic, the study found. In 2022, rapid development and DevOps have for the first time become the development approaches for the majority of new systems development. Cloud hosting and software-as-a-service have also become the dominant infrastructure model for core applications. For the second year in a row, the large-scale adoption level of core application suites in the cloud exceeded that of on-premises legacy systems (85% deployment versus 32%, respectively). The era of in-house ownership of computing assets is over, along with the maintenance and resiliency burdens that come with it. Nearly 90% of respondents are planning operating model changes in 2022, with the largest number saying they will shift to brokering and orchestrating third-party and partner solutions. This should help technology leaders improve time to value and agility.
Unusually High Boosts in Budgets and Staffing Expected – The Hackett Group’s research found that many technology organizations will have an advantage in 2022 that they are not accustomed to – a significant boost in resources. For the first time in five years, the rise in technology’s workload will be nearly matched by increases in the function’s staffing, operating budget and enterprise tech spending, according to the study. The research found that technology organizations expect to see a 7.5% increase in spend in 2022; and an unusually high (in excess of 6%) increase in technology full-time equivalents, driven, in part, by the enterprise focus on digital transformation.
Where to Focus in 2022 – Technology organizations will need a transformation agenda for 2022 that reflects the lessons learned and strategic reorientation following the crisis, as well as emerging new disruptors and opportunities. The Hackett Group’s research recommends they focus in five key areas: spend strategically while managing inflation impacts, anticipate and mitigate the impact of structural talent shortages, industrialize data and analytics capabilities, automate services end-to-end with customer experience as the guide for design, and complete the virtualization of technology function operations.
The Hackett Group’s 2022 Key Issues research is based on results gathered from more than 250 executives in IT, finance, HR, procurement, supply chain and global business services at a global set of midsized and large enterprises.
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