Digital priorities in the new normal
Businesses in the region may see vastly different priorities in 2022 but on a whole they seem poised to grow their transformation efforts in the new year.
ALMOST in the blink of an eye, the so-called new normal that had been so frequently alluded to in the early days of the pandemic is upon us.
It has been almost two years since businesses accelerated their digitalisation plans to cope with the crisis, and many are now asking themselves an inevitable question: Can they keep up the pace for transformation in the year ahead?
Would they have to be content with reduced expenditures after dipping into an "emergency" budget to get employees connected remotely, for example?
Or would they be stepping up their efforts, now that they have overcome the inertia for change and taken advantage of the new-found agility?
In other words, no turning back to the old ways of doing things but ploughing more investments into digital technologies, such as cloud, security, Internet of Things, artificial intelligence (AI) and data analytics.
If studies in Asia-Pacific are a guide, then it seems that businesses will continue to boost their digital efforts in 2022 and beyond.
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Research by ComputerWeekly shows that a majority of enterprises in the region have already received buy-in from stakeholders to shore up their IT investments in 2022.
Nearly two-thirds of the more than 1,000 respondents in a recent study are increasing their IT budgets, while only 6 per cent plan to spend less, according to the business technology publication.
This compares to 2021, when just 15 per cent of enterprises in the region planned to spend more on IT. Simply put, more enterprises are set to step up their efforts in the year ahead.
What are businesses spending on? According to ComputerWeekly, security and risk management were the top focus, followed closely by cloud computing and then digital workspaces and IT automation.
The priorities make sense. After a business has decided to migrate to the cloud to scale up operations, it might wish to rethink how to protect its data online.
It would also have to understand how to automate more processes as they get online. It also has to find new ways for employees to collaborate more efficiently.
Such priorities are borne out in other studies. A recent report by BCG and Cisco forecasts the overall cloud spending in Asia-Pacific to reach US$200 billion by 2024, with a compound annual growth rate of more than 20 per cent from 2018.
Both public and private cloud technologies are being used as a transformation strategy, the report added, as part of a strong shift towards cloudification across all layers of the technology stack.
The cloud brings scale and automation, enabling innovation in areas such as AI. This is related to a faster time to market and high efficiency, with changes to products generated more quickly.
At the same time, the cloud offers heightened security with the abstraction, automation and extensive monitoring it delivers, according to BCG.
And finally, the cloud is the platform of choice for many businesses because of the resiliency it brings. The pandemic has made businesses rethink the continuity plans they have by adding redundancy and mirroring, for example, according to BCG.
To be sure, every business is different, often facing different challenges. Each may be in a different phase of transformation, requiring different tools to get a job done. Priorities could differ vastly, even though each business may be expanding their efforts.
Digital natives would have zero legacy from older systems. A virtual bank, for example, would have every single product and service developed on the cloud, at scale and at high speed, with AI and data tools that their traditional competitors have to spend time incorporating into their older systems.
Then there are businesses that have a declared cloud-first strategy to overhaul their IT setup across their infrastructure, software and platform. These frontrunners may set a clear target to move a percentage of their services onto the cloud - often the public cloud - over the next few years.
After these frontrunners, you may find what are often known as "nimble followers". Not willing to take the early adopter pitfalls, these businesses look to learn the best practices from the frontrunners and implement their strategies at speed once the pathway appears clear and uncomplex.
Finally, there are businesses that are slow or uncertain in their cloudification and transformation efforts. Some may execute unevenly, with digital champions in one part of the company working in silos while others lag behind, possibly still tied to legacy contracts or unwilling to transition to due to legacy apps or services.
Clearly, these descriptions do not fully fit every business in Asia-Pacific. A bank may have very different priorities from a healthcare provider or a mid-size retailer, for example.
Each cloud setup, thus, could vary as well. With many enterprises in Asia-Pacific running private clouds on their on-premise data centres, it is not surprising that 44 per cent of them are looking to invest in hybrid cloud management tools in 2022, according to the ComputerWeekly study.
While many in the region are building up cloud-native applications with investments in microservices and containers, it noted that packaged applications such as enterprise resource planning are still very much in place in the core of their operations.
As the saying goes, there is no one-size-fits-all. Businesses in the region may see vastly different priorities in 2022, though they on a whole seem poised to grow their transformation efforts in the new year.
After two years of uncertainty, that may be one of the safest predictions for the next 12 months.
The writer is vice-president, Asia-Pacific, at Google Cloud.
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