Day: October 27, 2022

5 Critical Things to Expect in 2023

 

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” -Evolutionary Theory, Charles Darwin

When Microsoft CEO Satya Nadella took the stage in Seattle at the last Ignite Conference, the theme was “Do More with Less.” He talked about the importance of companies remaining agile and resilient. These skills are essential for success moving forward.

There are five challenges that will follow us into 2023. They are the following:

1. Staff Shortages
2. Supply Chain Issues
3. Economic Downturns
4. Energy Crisis
5. Cyber Attacks

 

1. Staff Shortages

About seven months ago, Microsoft published a study showing that 43% of the workforce is contemplating leaving their jobs in 2023 because they’re simply burned out. The following statistics represent 31,000 people across 31 different countries over two years between February 2020 to February 2022.

  • Increase of Weekly Teams Meetings by 252%
  • 6 Billion more Emails Sent
  • 32% Increase in online Chatting
  • Increase in After-Hours Work by 28%

The pandemic lockdown took its toll on all of us in one way or another. Half of every adult reported symptoms of anxiety or depression. For many, the days were full of staying alive and healthy and keeping our family safe. A study by Ernst & Young showed that 54% of workers left previous employment because their supervisors weren’t empathetic to their struggles. These same managers didn’t care about anything that happened in their personal lives. Experts are now attributing much of the Great Resignation as a by-product of this “business-as-usual” mentality.

Many business leaders are listening more closely to what employees want and need from a job with their company. A recent Gallup poll found that 61% of employees wish for a more outstanding work-life balance and a better sense of personal well-being. A recent Harvard Business Journal article found that 40% of US employees would look for another job if ordered to return to the office full-time. Many have quit without having a replacement job waiting.

The Great Compromise

The question of hybrid work has yet to be decided, far from it. As companies determine how they can be most attractive to the best candidates, many are flexible with their work environments. The most popular long-term strategy seems to be a compromise, a variation of the hybrid work model. Either two days at home, three days in the office, or three days at home and two days in the office.

Hewlett-Packard is a good indicator of what the future enterprise office might be. HP is a huge multinational enterprise company with approximately 60,400 employees. The company wants to hire the best candidates and keep them as long as possible. HP did an internal investigation and found that almost two-thirds of all the employees wanted to spend only 20% or less working at the office. Alan May, HP’s Chief People Officer, said, “We know that when team members feel they have a balance, they are more productive and more likely to build a career at HPE.”

People who work at HPE choose when and if they want to come into the office. The setting at the office now reflects smaller spaces designed for close collaboration and socializing. Gone are the large conference-style rooms. People in the office will still sit on a Zoom call or a Microsoft Teams meeting.

2. Supply Chain Issues

Supply chain issues started during the global shutdown that followed in the wake of Covid-19. Putin’s war in Ukraine has made supply chain problems worse. A recent article in HBR asks,“How Exposed Is Your Supply Chain to Climate Risks?”

The article points out how major climate threats confront supply chains everywhere. Companies must take a proactive stance on anticipating weather-related problems and how to respond to them. The article also pointed out that most companies are not prepared to handle the crisis if it should occur. There are no business continuity plans and no alternative sites identified as replacements. Becoming more resilient goes beyond ensuring short-term operational continuity during crises. Supply chain resilience comes down to your ability to work around supply chain disruptions with whatever existing capabilities you have in-house. Work to build protective measures into existing supply chains to better deal with shortages and rising logistical costs. You can also improve your company’s resilience by not counting on commodities with wildly escalating market prices.

Leverage digital technology to solve issues and problems before they happen. You already know supply chain problems will continue into 2023. Machine learning and big data tools can help identify the main problem areas and help source alternatives. Custom cloud services and solutions can accelerate innovation and value across supply chain networks.

Our blog from earlier this year explored how digital manufacturing can be a game changer. Digital manufacturing is the application of cloud computing systems to manufacture services, supply chains, data collection, warehousing, and processes. Digital manufacturing technologies link systems and processes across the production environment to create an integrated approach to manufacturing. This strategy encompasses everything from design and development to producing and servicing the final products. Traditional factories were analog environments where everything was built by hand and have become Smart Factories.

The window of opportunity is open but will only remain for a while. Remember, things move fast, and the stakes couldn’t be higher for manufacturing to get innovation right. Writing about transforming businesses through technology and innovation, Ethan Karp is the President and CEO of a non-profit manufacturing consulting group called Magnet. In his Forbes article, 4 Reasons 2022 Can Be A Game Changer for American Manufacturing, Karp recognizes the opportunity for American manufacturing.

Supply chain disruptions, like a cancerous cell, have significantly contributed to the following two challenges, the economic downturn and the energy crisis.

3. Economic Downturns

Supply chain constraints have done their share of stunting economic growth. Supply chain disruptions lead to things that weaken a country’s economy. Things like shortages of critical goods, price inflation, factory closures, and unloaded shipping containers. Economic experts cast gloomy predictions for 2023. The forecast calls for ongoing inflation, higher interest rates, and depressed economic growth. As counterintuitive as it might sound to invest money while the global economy becomes increasingly unpredictable, companies should bolster their position by adopting digital technologies. Embracing digital technology to optimize processes and improve efficiencies on multiple levels enables organizations to be lean, more resilient, and adaptable.

Digital technology solutions can optimize your workflow by significantly improving productivity, streamlining, and advancing processes to benefit your entire team and your customers. Relevant data can be accessed in real-time by those who need it when they need it. The boost in efficiency will save precious while creating a more fluid workflow between departments. Employees perform better and accomplish more in less time.

Take a Clue from Recent History

During the Recession of 2007-2009, the companies that prioritized early cost restrictions, starting with implementing emerging digital technologies, were able to increase profitability and, in some cases, continue growing. Having business-critical data in a cloud computing environment provides a reliable and secure infrastructure. Cloud applications ensure business continuity and increase the ability to pivot.

4. Energy Crisis

Cyclic demands for energy combined with slow supply recovery after the pandemic contributes to an unpredictable global energy situation. As uncertainty and volatility in the energy market continue to mount, Europe faces complete depletion of natural gases by the Spring of 2023. The European energy crisis will restrain industrial production and push Germany deeper into a recession as we move into 2023. Using digital technologies, utility companies can use the enormous amount of data from distributed energy resources in situational intelligence.

Doing More with Less

Digital twins are available to allow utilities to detect current problems and wasteful energy drains, prevent escalations, predict future situations and optimize the flow of electricity. Digital twin models can be used to solve the demand for more electricity with less carbon output and a more affordable cost. Leveraging data, analytics, and software solutions, digital technology can help global energy companies meet the challenge of providing reliable power and strengthening the future of energy.

5. Cyber Attacks

If you travel to Northern California, there’s a roadhouse biker bar called the Alpine Inn, a few miles from Stanford University. Just inside, there is a plaque that reads:

BEGINNING OF THE INTERNET AGE

On August 27, 1976, scientists from SRI International celebrated the successful completion of tests by sending an electronic message from a computer set up at a picnic table behind the Alpine Inn. The message was sent via a radio network to SRI and through a second network, the ARPANET, to Boston. This event marked the beginning of the Internet Age.

None of the scientist present that day had any security concerns about what they were building. They were trying to get the thing to work. What they made would soon become the digital backbone for our modern banking, commerce, infrastructure, health care, energy, and weapons systems. There was no consideration given to the idea that this would become an interconnected system one day.

In her foreboding book, THIS IS HOW THEY TELL ME THE WORLD ENDS, Nicole Perlroth tracked down one of the men at the picnic table on August 27, 1976. His name is Dave Retz, and he shares an ominous foreshadowing of things to come.

Two years before they pulled up to Zott’s (now the Alpine Inn), air-traffic controllers at San Francisco airport started complaining that beams of “unknown origin” were interfering with their radars. As it turned out, SRI’s radio frequencies had infiltrated the airport’s traffic control. But even then, the idea this invention might one day threaten to bring down airplanes, disrupt water supplies, or rig an election hardly fazed the men and women building its basic blocks. Some four decades later, in 2020, San Francisco International Airport officials had just discovered that the same stealth Russian hackers probing our nuclear plants, grid, and states had hijacked an internet portal used by airport travelers and employees.

I asked Retz what, if anything, he would take back. His reply was immediate and unequivocal. “Everything can be intercepted,” he told me. “Everything can be captured. People have no way of verifying the integrity of these systems. We weren’t thinking about this back then. But the fact is,” he added ruefully, “everything is vulnerable.”

Cyber-attacks threaten more than business-critical data. When you consider Frost & Sullivan’s reporting on accelerated growth over the next eight years, you realize the enormity of the challenges ahead. The research firm projects that the earth will have a complex network of 200 billion devices, averaging 20 connected devices for every human being on the planet. As IoT-connected devices become more sophisticated in their capabilities, vulnerabilities to attack will rise too.

Cybercriminals continually poke and prod for vulnerabilities and broader attack surfaces.

In an article for CSO Online, Apurva Venkat writes, “There is a significant shift underway from on-premises to cloud-based services. Crucial elements of many business processes are on the cloud now, easing file sharing and workforce collaboration. We continue to see increasing efforts by adversaries to target cloud-based assets.”

She quotes Nick Lowe, director for Falcon OverWatch [CrowdStrike’s managed threat hunting service that provides deep and continuous human analysis, 24/7, to identify novel attacker tradecraft designed to evade standard security technologies] at CrowdStrike, “So now, more than ever, it’s critical for organizations to deploy that mix of technology-based controls and human-led hunting to be best positioned to combat these evolving cloud threats.”

By next year, Gartner predicts, 60% of enterprises will phase out most of their VPNs for Zero Trust Network Access (ZTNA) which provides secure remote access to business-critical data based on clearly defined access control policies. As we pointed out in an earlier blog, robust and holistic cybersecurity protocols must be considered a cost of doing business. Security is vital at all times, particularly during the economic upheaval.

Conclusion

Just as the critical challenges are interconnected with each other, so are the tools we’ll use to ease some of these challenges. Artificial Intelligence (AI) and other digital technologies continue to impact our business and personal lives, and they will continue to do so. In many cases, we need to be fully aware of how much AI influences what we do at work or what we purchase online. We’ve grown accustomed to having things suggested to us. Ready-to-use technologies are increasingly becoming available to us via the cloud.

Boundaries separating transformational digital technology tools are blurring together. As we move into 2023, AI, the Internet of Things, virtual and augmented reality, and cloud computing will move in tangent. The availability of one will mean the availability of another. All forms of hybrid working environments, business decisions, and automation of routine tasks will continue to converge in ways that will enhance each other. Consider how modern smartphones make many applications available to us from one device.

Investment in technology will position your company for stronger resilience and out-term growth, especially during periods of volatility and uncertainty.