After two years of remote working for many, it seems hybrid working is here to stay, creating that much-needed flexibility for workforces that has been reflected in a diversified array of enterprise technology stacks.
Talking to a breadth of enterprise technology experts about their takeaways from 2022 and predictions for the coming year, a common narrative emerged. As much as businesses grapple for savings and a big return on investment (ROI) push, the saving grace will be finding the best fit in the new hybrid world era, both for people and technology.
As enterprises have rushed to adapt to a work-from-everywhere era, they’re left figuring out how best to structure sets of hybrid technology solutions: whether to use piecemeal multi-vendor solutions, hybrid and multi-clouds, or a sprinkling of enterprise apps, has largely remained a puzzler.
Many are caught between consolidating and strengthening the core ERP backbone or bolstering the legacy system with top-layer platforms and tools. Not to mention finding the best interoperable apps to diversify business capabilities for the better.
For success in uncertainty, businesses are turning back to their fundamental values to produce the best results. Focusing on areas like upskilling existing team members, adding tools to aid employee and operation productivity, efficiency and sustainability, and prepping for new environmental, social and governance (ESG) legislations, might actually be the way to create the most return on investment.
With the quest for talent and technology ROI being so central, it seems that somehow, despite the recession and a more-for-less mentality, this might just be the year of the employee and ESG. Find out more as ERP Today talks to experts from SAP, Oracle NetSuite, Accenture, FinancialForce, Epicor and many more.
The hybrid transition and achieving more for less
Businesses will be trying to get more for less or more for the same – Andy Campbell, FinancialForce
Andy Campbell, global solution evangelist at FinancialForce:
In 2022, the transition in the enterprise technology industry, with companies’ business leaders switching from legacy, on-premise ERP solutions to the cloud, increased. The pandemic underlined the significant advantages of leveraging cloud; in particular how it allows employees to work remotely.
With the rise of hybrid working, companies have realized that they can operate remotely in an efficient and effective manner. This provides cost-saving benefits to the organization and enhances the work/life balance of its employees.
For 2023, the new reality is that there is a lack of money in the general economy, while companies are also intent on maintaining profitability but not increasing their headcount. As such, businesses will be trying to get more for less or more for the same.
Companies are still embracing transformation initiatives, but they are being undertaken with greater clarity and increased rigor over ROI. What’s more, ERP vendors will prioritize customer success. A lot of SaaS providers are lagging behind. As such, there will be an increased focus on professionalizing the role and ensuring it is recognized by customers as providing much more than just support.
As the SaaS model matures, software companies need to ensure that they can support an increasing range of revenue streams including subscriptions and managed service contracts. But enterprises have got to make sure that they’ve got robust mechanisms in place to manage their revenue recognition obligations and compliance with IFRS 15 regulations in particular.
Auto-pricing will enable high-growth businesses to remain agile and budget more effectively – Nicky Tozer, Oracle NetSuite
Martin Schirmer, president of enterprise service management at IFS:
2022 was a year of ongoing disruption. From the cost-of-living crisis to the Great Resignation, individuals, organizations and industries were forced to adapt at speed. In turn, this has brought new ways of working that are reshaping today’s business landscape.
Last year we saw the democratization of enterprise service management (ESM) move to the top of the agenda for many ambitious organizations. This has meant digitizing processes and building effectiveness through workflow for everyone in an enterprise, regardless of their department, which is particularly critical when managing hybrid environments and processes.
In 2023, we’ll see more organizations opting for leaner, more agile approaches to digitization.
As organizations look to deliver efficiencies across the board, automation capabilities will also move to the front and center. Automating routine, manual tasks will reduce workloads and errors. At the same time, this will enable employees to focus on more creative, fulfilling aspects of their role.
Then there’s the financial aspect to consider. In the current economic climate, getting a handle on IT spending is paramount. Ensuring costs are down without thwarting digital transformation progress will be critical.
We’ll see more organizations opting for leaner, more agile approaches to digitalization – Martin Schirmer, IFS
Nicky Tozer, senior vice president, EMEA at Oracle NetSuite:
The most difficult task facing CFOs in 2023 is the hiring and retaining of staff. The battle to attract top talent is fierce, and as finance leaders keep their teams lean in times of recession, they need to get creative. Automation will be a vital investment for finance teams, not only to do more with less people, but to give professionals more time for value-add projects.
Customers, employees and investors want to deal with brands that ‘do good’. Customer demands for transparency, and younger generations holding employers to higher standards than their predecessors, has given ESG a pivotal role in recruitment, retention and brand loyalty. Creating and maintaining a robust ESG strategy hinges on a business’ quality and breadth of data. Cloud-based solutions will be vital to aggregate information from all parts of the business, shape realistic targets and monitor progress that will satisfy customers, employees and investors alike.
In 2023, as uncertainty continues, businesses should focus on making their digital capabilities more robust to protect against risk. Auto-pricing will enable high-growth businesses to remain agile and budget more effectively. This technology will allow businesses to respond to fluctuating supplier prices and maintain accurate cash flow forecasts – to centrally manage pricing, ensure consistency across all channels and amend product prices in line with margins.
Redeploying budgets for efficiency and skills boost
Ulrik Nehammer, president, EMEA at ServiceNow:
Organizations are facing an incredibly complex and volatile macro environment and, as they manage this environment of uncertainty, business strategy and decision-making is being put under the magnifying glass. A focus on business transformation for efficiency and ROI – more than what’s ‘new’ – will be top of mind for the coming year.
As the world is gripped by soaring inflation, intelligent digital investments can be a huge deflationary force. Business leaders are already shifting investment focus to technologies that will deliver outcomes faster.
Going into 2023, technology will become increasingly central to business success – in fact, 95 percent of CEOs are already pursuing a digital-first strategy according to IDC’s CEO survey, as digital companies deliver revenue growth far faster than non-digital ones.
Business transformation also requires talent transformation, and employers will continually need to upskill their employees to get to grips with the technologies that will drive success. Boosting digital skills as part of digital transformation is a win-win for organizations as closing the digital skills gap could add $11.5tn to global GDP by 2028, according to the World Economic Forum.
We expect an increase in hiring and valuing digital natives who understand analytics – Stephen Edginton, Epicor
Ranga Bodla, vice president of field engagement and marketing at Oracle NetSuite:
For 2023, the growth at all costs era is officially dead and businesses will be much more careful about where they place big bets.
Interest rates will remain high in 2023 as the Federal Reserve continues its fight against inflation. The combination of inflation and high interest rates mean margin pressures and dampened consumer spending. Businesses should continue to prioritize maximizing cash flow and tracking any signs of changing demand. This will require businesses to have strong visibility into revenue streams and changing costs of goods sold.
Inventory and supply chains will continue to fluctuate in 2023, and strategic stockpiling will continue to be a key way to ensure that businesses are not tying up cash in inventory while also having enough inventory on hand to fulfill customer orders.
Significantly improving efficiencies in the finance function and beyond, automation will be the key approach to managing the talent shortage that will persist for years. Businesses looking to optimize and streamline their operations will look carefully at their existing software portfolios and see where they can consolidate spending.
Strategic investments to maintain your tech backbone
Clare Hickie, chief technical officer for EMEA at Workday:
In 2023, technology will influence the employee experience more than ever before.
With technology playing a role in every employee touchpoint, CIOs are in a unique position to help create the ultimate employee experience. Deploying inclusive and accessible technologies that ensure every team member can bring forward their best work results in happy employees, boosted retention rates and a competitive edge.
Platforms, apps and technology solutions have grown at a high rate. All the choices can lead to the proliferation of various apps, platforms and tools. We’re seeing more redundancy throughout organizations. Technology will need to be optimized through the consolidation of platforms and apps.
Even as the economy softens, the demands on our technology become ever higher. While CIOs focus on helping their organizations meet this moment, they must continue to prepare for tomorrow. Businesses will need to future-proof their technology for recession. This doesn’t mean purchasing every new app and piece of software. It’s about making strategic investments that maintain your tech backbone, while building the technology for the future.
A focus on business transformation for efficiency and ROI will be top of mind – Ulrik Nehammer, ServiceNow
Stephane Maes, CTO and CPO, enterprise service management at IFS:
In 2022, we saw more and more organizations come to the realization that their legacy IT service management (ITSM) systems are no longer fit for purpose. For example, many have struggled with tracking and locating events, while dealing with a lack of seamless integrations with multi-tenant applications. Essentially, their outdated, expensive and hard-to-scale ITSM solutions have quickly become more of a problem than a solution.
These issues have not only led to wasted time and resources but have snowballed together to affect overall service experiences. Keeping on top of security, in particular, is important as cyberattacks become increasingly complex.
Business-critical operations are becoming increasingly dependent on technology. This is especially true in hybrid work environments where success is dependent on providing seamless digital experiences across every device, no matter where employees are based.
Security is a key part of this puzzle. As organizations’ IT ecosystems grow in complexity (involving numerous devices that are accessible from anywhere, anytime), it is absolutely vital that governance, compliance and cybersecurity are embedded into everything an organization does. The threat landscape is expanding, meaning attacks are growing in both frequency and complexity. To this end, we’ll see more enterprises doubling down on zero-trust IT strategies to eliminate explicit trust.
Effective management of distributed cloud environments will be a top priority. Organizations are implementing various cloud solutions (public, private, hybrid and multi-clouds) across the business to meet compliance and performance requirements.
Distributed cloud will quickly become a ‘must have’ for many organizations. Using this approach, one central location manages resources across different departments, in multiple locations. This gives business leaders greater visibility of their assets, while providing scalability and agility that is cost-effective.
Emma McGuigan, global lead, enterprise and industry technologies at Accenture:
Over the past two years, companies have faced an unprecedented number of black swan events that have required them to adopt new technology to transform their businesses faster than ever before. Enterprises rushed to get new applications up and running to keep the lights on but, as we go into 2023, they now have the tricky job of untangling it all to make it work more cohesively and provide ongoing business value.
We’ve found that this can be accomplished through high interoperability. When business applications are interoperable, there is greater data sharing, transparency and better human connections, which allows organizations to pivot quickly and increase resilience.
Leaders can maximize interoperability and achieve compressed transformation by focusing on the cloud, composable technology and collaboration. In 2023, we predict the value opportunity opened up through interoperability is one that cannot be ignored.
Stephen Edginton, chief innovation officer, SVP engineering at Epicor:
Moving to the cloud is already reaping rewards for those who have made the change. According to our recent 2022 Industry Insights report, 46 percent of businesses in our core sectors are now primarily or entirely in the cloud. 90 percent of those we spoke to earlier in 2022 indicated their move to the cloud was worth the effort, having realized a variety of transformational benefits, including improved flexibility and adaptability, better security, simple regulatory compliance and enhanced business resilience.
But as our turbulent economy is resulting in more mergers and acquisitions, businesses can either diversify or consolidate to survive.
Interestingly, our research shows that 78 percent of SMBs in manufacturing, distribution, building supply, automotive and retail industries changed their core business models over the last year to better compete. However, without accurate data insights, it’s impossible to make the right strategic decisions. As more companies develop their data strategies in 2023, we expect an increase in hiring and valuing digital natives who understand analytics to help unlock further business value.
A data-driven approach will create a collaborative ecosystem in which organizations can collectively share their anonymized datasets. Once a strong digital foundation and effective data strategy are in place, we expect an increase this year in people-centric automation tools, digital work instructions and intelligent integrations.
The value opportunity opened up through interoperability is one that cannot be ignored – Emma McGuigan, Accenture
More than just IT
Anthony Byrne, partner technology consulting at EY:
In 2022, organizations often moved away from a midmarket solution to an enterprise ERP system as the level of transactions and data that needed to be stored continued to increase. As cloud software, in-memory computing and connectivity improved throughout 2022, many organizations took the opportunity to replace their customized ERP systems, which often date from the 1990s, with new ‘greenfield’ options.
For 2023, increasingly sophisticated and enterprise-grade ERP systems are providing additional functionality to build in automation across departments, more sophisticated reporting, planning and overall, eliminating the need to manage multiple standalone systems. This year, organizations must think carefully about their options, giving themselves sufficient time to create a strategy and a corresponding roadmap. This will require the involvement of more than just the IT team – resources need to be put in place that understand the business requirements and have sufficient authority to make future-state decisions.
Keith O’Kelly, chief revenue officer, enterprise service management at IFS:
The battle for talent brought employee experience into focus in 2022. Mass quitting and severe talent shortages pushed many organizations to reconsider the wellbeing of their staff. Initially held back by uncertainties surrounding the pandemic, people quit in droves last year as if reaching a tipping point, faced with extreme burnout and stagnant wages.
To combat this dissatisfaction, improving the employee experience became essential in order to win the battle for talent.
Faced with a tough economic landscape and a constantly shifting labor market, the pressure to keep both employees and customers happy has never been higher. To navigate this reality, organizations will double down on delivering excellent experiences and improving satisfaction levels in 2023. We will likely see more enterprises looking to unify employee and customer experiences to promote greater synergies in the workplace.
Extending ITSM beyond IT – connecting employees and customers, and one business department to another – will enable organizations to move fast and respond swiftly to the evolving needs of their industry and people.
It is no longer solely about focusing on the customer or employee experience in isolation, but rather the total experience. Business processes will be reshaped by this approach; by implementing ESM and creating a connection between the two, this will enable organizations to break down silos, identify all touch points and optimize the end-to-end service experience.
Keeping on top of security is important as cyberattacks become increasingly complex – Stephane Maes, IFS
Successful ESG strategies
Cathy Mauzaize, vice president, EMEA south at ServiceNow:
2023 is the year ESG is integral to every company’s strategy. Failure to engage appropriate investment in ESG strategies could plunge any organization into crisis. Legislation must be respected and so must the expectations of employees, investors and your ecosystem of partners and customers.
ESG strategies must be carefully curated, taking four key truths into consideration. First, there is no ESG in a box. How you approach your strategy also depends on the maturity and scope of your operations. Second, talent is crucial. Hiring digitally minded, environmentally focused employees will help mitigate any emerging skills gap. Third, companies should take a control tower approach. Leveraging the right technology which feeds back progress, data, insights and intelligence is vital for success. The fourth variable is innovation. The wider ESG agenda is more like an evolving organism than a timeless axiom. Constant innovation to find novel solutions and continuously engaging with ESG issues is vital to any strategic success.
ESG is not just a tick box, one and done, it’s a new way of business that will see us through 2023 and beyond.
Stephen Jamieson, global head of circular economy solutions at SAP:
Over the course of the next twelve months, businesses will have to comply with stricter legislation for sustainability reporting. While leaders have faced increasing pressure to disclose their environmental impact for some time, new regulations – including the EU’s Corporate Sustainability Reporting Directive – will now make this a necessity.
From 2024, businesses will have to disclose data around their overall impact on the environment, while initiatives such as the UN’s Plastic Treaty will soon offer a legal framework for tackling plastic pollution. It is therefore critical that leaders are prepared in advance – this starts with identifying gaps in reporting and integrating sustainability metrics into core business processes and objectives. This will future-proof operations against changing regulations, while also supporting the transition to more sustainable business models grounded in the circular economy.
Organizations must think carefully about their options, giving themselves sufficient time to create a strategy and a corresponding roadmap – Anthony Byrne, EY
Leveraging new metaverse technology
Paul Hardy, EMEA innovation officer at ServiceNow:
In 2023 and beyond, we will see business leaders begin to leverage technologies, such as the metaverse, to help cultivate and maintain employee engagement as businesses continue working in hybrid environments, in an increasingly challenging macro environment. Given the current economic climate, adoption may be slow, but in the future, a network of 3D virtual worlds will be used to foster meaningful social connections, creating new experiences for employees and reinforcing positive culture within organizations.
Leaders have begun to see the benefit of hosting traditional training and development sessions using VR and AI-enhanced coaching. In the next few years, we will see more workplaces go a step beyond this; for example, offering employees the chance to earn recognition in the form of tokens they can spend in the real or virtual world, gamifying the experience.
As metaverse technologies become both more complex and commonplace, we will see businesses seek out digital platforms to help connect metaverses to each other, and to the physical world, so networks do not become siloed. In an ideal scenario, businesses would be able to support the continuity of data and experiences across platforms, systems and worlds.
The right platform will need to integrate metaverses under a robust system of governance so that organizations can track their assets, communicate transparently about status and data storage, and build hyper-personalized experiences.