6 Trends Driving Digital Transformation in 2023
2022 was an eventful year as ongoing supply chain disruptions, the evolving pandemic, the Russia-Ukraine war, rising inflation and the looming recession impacted business operations and plans. Despite these challenges, or perhaps because of them, businesses have continued to invest in digital transformation, building greater resiliency and adaptability into their supply chains, supplier relationships and decision-support capabilities to enable the level of intelligence and flexibility needed to address changing demands and market dynamics.
According to a recent Navisite survey, CIOs are shifting more of their budgets towards digital transformation. The majority (88%) plan to invest even more over the next 3-5 years—with cybersecurity (43%), cloud-first strategy (37%), and data integration/data management (32%) at the top of the priority list for 2023.
To get a pulse on what to expect in 2023, we spoke with Navisite’s CEO Mark Clayman, CISO Aaron Boissonnault and SVP of Professional Services Steve Woodgate to get their views on the top trends and technologies to keep in mind when planning tech budgets and projects for the next year.
Digital Transformation and the Recession
When asked about his take on 2023, Navisite CEO Mark Clayman highlighted the importance of continued investment in digital transformation. “Finding a way to free up budget and continue to reinvest in tech will not only allow organizations to become better operationally and differentiate their business, but also better withstand the fluctuations of ever-changing economic conditions. Ultimately, if you’re in the mindset of squeezing every dollar and not reinvesting back in the resources and technologies to drive your business forward, then you are creating a downward trajectory.”
This benefits of digital transformation during a crisis are supported by the data. According to a McKinsey study of the state of Industry 4.0 in manufacturing, companies that scaled their use of digital technologies prior to the COVID-19 pandemic found themselves in a better position to respond to the crises—94% were able to keep their operations running, and 56% said these technologies were critical to their crises response.
Automation of Business Decisions
The last two years saw a major uptick of cloud migrations, including ERP and other enterprise systems that hold core company and customer data. In fact, ISG research showed that companies accelerated their enterprise digital transformations by three to five years due to conditions caused by the pandemic. Data that was once held in siloed systems on-premises is now on the cloud—and the newfound ability to easily access and integrate that data across systems and processes is fueling the next generation of decision-making.
According to Clayman, cloud adoption combined with advancements in intelligent technologies is enabling people to get smarter about automating business decisions.
“Instead of looking back at historical data to make strategic business-level decisions—whether it’s about product pricing, go-to-market plans, sourcing materials or responding to competitive pressures—companies can bring together data from both internal and external sources as part of an automated process to get those insights in real time,” said Clayman. “The ability to automate that type of decision-making is game changing, and we are at a place now where it’s not only possible, but accessible to a much broader range of organizations. Companies should be thinking about these use cases as they look at their tech investments for 2023.”
Impact of SEC Cybersecurity Regulations
This year the SEC proposed new cybersecurity disclosure rules that, if approved, will significantly impact how public companies report on incidents, as well as manage and report on their risk management and governance programs. The proposed rules have sparked enormous debate among industry groups that say it could put companies at risk. For example, the proposed four-day disclosure deadline for reporting on material incidents means companies would have to report on many of the details, even if they haven’t had a chance to fully remediate the breach.
“While greater transparency and timely reporting of breaches is critical to investors, customers and other stakeholders, there is inherent risk in disclosing too much, too quickly, to criminal elements that are prepared to take advantage of that exposure,” said Aaron Boissonnault, Navisite’s CISO. “The proposed ruling will have ramifications beyond public companies when it goes into effect, so it will be important to stay abreast of the coming regulation. At a minimum, it highlights what companies need to be thinking about for their cybersecurity programs next year, which is taking a more strategic, holistic approach to understanding where the risks lie and how to manage them as part of an overall governance program.”
For more information on the SEC’s proposed rules and best practices to help you prepare, read Navisite’s brief.
The Growing Cybersecurity Skills Gap
Much has been said about the ongoing cybersecurity skills shortage. Recently, ISACA’s 2022 report found that organizations are struggling more than ever with hiring and retaining qualified cybersecurity professionals and managing skills gaps. Additionally, Navisite found that the shortage is not limited to security staff; It extends to the highest levels, with nearly half (45%) of companies reporting they don’t employ a CISO. How will companies contend with these shortages in 2023? According to Boissonnault, it comes down to a combination of smart outsourcing and select security technologies to cost-effectively address program oversight and management.
“It’s not about layering on more security technologies to address the latest threat,” said Boissonnault. “That not only creates management complexity but requires constant oversight in an environment where those skills are hard to find. Even as companies prioritize cybersecurity in their 2023 budgets, they should still apply a high level of scrutiny to their spend. I recommend starting with a baseline third-party security assessment, so they can understand the specific gaps they have in people, processes and technology, and then fill those gaps with the right mix of in-house and outsourced staffing and expertise.”
RPA as a Cost-Savings Strategy
With growing concerns over the economy, many companies are tightening their budgets and employing a variety of strategies to drive efficiencies. Yet again, automation rises to the top of the list, but this time as a tool to support lean operations and do more with less. Steve Woodgate, the SVP of professional services at Navisite, expects that 2023 will see an increase in the adoption of automation tools like RPA due to the significant cost, productivity and labor-saving benefits they bring.
“When companies shifted to remote work during the pandemic, RPA became an invaluable tool to automate key processes, like accounts payable and receivable (AP/AR), so teams could continue working without having to be onsite,” said Woodgate. “Now companies are turning to RPA as a cost- and time-savings tool for a wide range of use cases. Anything scriptable, repeatable and highly manual is ideal for RPA, so whether it’s in finance, order/purchasing or other function, we can quickly implement a bot to automate that process.”
Broader Adoption of Data Process Mining
Leveraging process mining to uncover trends in core business workflows was once the bastion of larger enterprises with the in-house expertise and tools to invest in this type of deeper analysis. But these capabilities are now becoming available to a much broader audience. Leaders like SAP and Microsoft have acquired data mining companies and they are making it possible for midmarket and smaller enterprise companies to mine and analyze core workflows across a range of operations and systems, including their ERP systems.
“We’ve just seen the tip of the iceberg on what process mining can do,” said Woodgate. “And with companies like SAP putting these tools within the reach of more organizations, we’re going to see an evolution of data mining and analytics over the next year as companies look to simplify enterprise complexity, lower their costs and achieve better business outcomes.”
To learn now Navisite can help you take full advantage of process mining, automation, cybersecurity solutions and other digital technologies in 2023, contact us today.