23/09/2022 Earlier this year, we released our C-suite barometer, a report that captures the views of over 1,000 executives around the world. The study revealed that leaders expect technology and innovation trends to have the biggest impact in the coming years. In this interview, Asam Malik, Partner, Technology & Digital Consulting, Mazars shares his insights on the findings and how organisations are preparing for future disruptions.
Emerging opportunities and challenges
Technology has been seen as a driver of business growth for many years. During the pandemic, the world was shown a new way of working, as organisations harnessed technology and automation further and adapted to remote working – a pandemic legacy that is here to stay. Looking ahead, what are the emerging opportunities in tech that businesses should be considering and what are the main challenges in adopting new forms of technology?
Asam Malik: What we’re seeing today is that technology is evolving incredibly fast; yet companies have still not fully integrated new technologies into their businesses to reap all the benefits they bring. So, whilst we talk about emerging opportunities through technologies such as machine learning, artificial intelligence and robotics, we are still skirting around the edges when it comes to full utilisation of these.
We must also keep in mind that some of these new, disruptive technologies didn’t exist two years ago, so we can expect that in two years’ time, additional new emerging technologies will surface. It’s important that we focus not only on leveraging the already available technology, but also in preparing to embrace anything new that might come along with an open mind.
This is why having a digital strategy is extremely important; and to build a successful digital strategy, companies must consider two important questions: 1) how to leverage new and emerging technology to the fullest extent, and 2) how to horizon scan for technology that’s going to be disruptive and embrace and investigate it to make sure we leverage it at scale.
From the cybersecurity perspective, the main challenge is understanding what the risks are – a lot of technology requires access to data and data systems, and companies need to ensure that the access and control to this data is correct. In robotics, for example, many robots have privileged access to systems, meaning if a robot were to become compromised, it could be an access point for someone to gain unauthorised access to the organisation.
The second risk and challenge for businesses is centred around education and awareness. Businesses can invest an enormous amount into new technology, tools and innovations, but if users are not trained and able to use the technology to transform their business, it will fail. Investments in new technology, tools and innovations therefore must be paired with an investment in training, all while assuring that their employees don’t see the technology as invasive and as a potential replacement to the workforce, and instead view it as a compliment to their work.
Our study revealed that leaders are prioritising IT, with 82% planning to increase investment in maintaining evolving IT systems. What are the main investment trends within IT and how concerned should leaders be about cybersecurity?
Asam Malik: At first, leaders were predominately focused on how to make new technology available for staff as they transitioned to working in a remote world. Now, businesses have shifted their focus towards how to use technology to transform their processes and operations, namely through investments in automation.
Historically, businesses have tended to put data protection and cybersecurity lower on the agenda as they don’t yield the same quick return on investment as other new and emerging technologies. However, this is a mistake because when the right controls and securities are not put in place, the reputational damage of an issue could turn around any benefits achieved.
Investing in the right talent
As organisations place technology higher on the agenda, what factors must they consider when it comes to hiring tech talent? How can businesses challenge those leading their technology delivery to ensure their investment is well spent?
Asam Malik: There is an absolute war on talent right now – everyone wants the same types of skills at the same time, which is driving up demand. This is coupled with the fact that there are very few individuals out there that have experience in these types of roles and can carry the benefits of their previous experience into a new role.
What we’re also seeing is that when organisations go to market, they tend to opt for more traditional roles without assessing their true needs, which could lead them to create positions they may not need on a permanent basis or don’t align with the goals of their digital transformation.
The types of skills needed over the course of a transformation are very different at each stage, which is why businesses should be open to a more fluid resource model, where contractors and consultants might be more suited to match specific skills in demand over a finite period. For example, data migration, cyber security or data privacy may only be needed for one component of the transformation, and by analysing long-term needs well in advance, businesses can avoid hiring individuals to fill these roles full-time only to later put them on the bench.
What’s more, organisations are not doing their due diligence on the individuals that they do hire. Typically, the hiring process for these more traditional roles are conducted by the CIO, CTO or COO and the question remains whether they truly understand what skills and capabilities they are looking for.
This brings us back to the wider issue that in general, across most organisations, there is a gap at the senior level understanding around technology. Often, if you look at the board, audit committees or executive directors, there is a noticeable absence in technology leaders, yet technology is driving nearly every organisation. This lack in tech leadership puts companies at a disadvantage, as they would benefit immensely from having someone who truly understands the risks and benefits of technology and can challenge, and critique decisions made at the executive level.
Overcoming regulatory hurdles
Organisations must consider not only potentially disruptive trends in technology, but also the regulatory challenges that come along with them. How can organisations prepare to adopt new technologies in an evolving regulatory landscape?
Asam Malik: Regulation tends to tread slightly behind technology adopted by organisations, however there are several ways that businesses can prepare for what’s to come. Namely, they should adopt new technologies in a pragmatic and controlled way - when controls are implemented as an afterthought, it is not only costly, but also challenging for organisations to rethink processes that have already existed without controls. By embedding controls from the onset, organisations will be prepared for when new and emerging regulation is introduced and rather than reinvent the wheel, they will just need to refine the controls that they have already implemented.
Using technology as a driver for the ESG agenda
Over the last few years, we’ve seen organisations ramp up their ESG efforts. In what ways are businesses incorporating technology to support their ESG agendas?
Asam Malik: We’ve seen an increase in appetite in how technology can drive the ESG agenda, with remote work being the most obvious driver in the past two years as Covid-19 lockdowns pushed businesses to reduce travel and office work. Yet, looking at the less obvious drivers, we are also seeing many organisations ask themselves how they can use technology to transform the way they deliver services.
Again, this is where automation and innovation come into play: organisations must start asking themselves whether they need to have processes in place that consume resources, time and energy, when in fact they can be automated. In many ways, technology can drive the ESG agenda by offering those efficiencies to reduce their carbon footprint. The answer will be different for every organisation, however it is important this question be asked at every board.
Further, organisations must look at the ESG components of the technology they use. Technology consumes vast amounts of electricity around the clock and businesses must consider whether they have understood and quantified the impact of its use – and quite often, the answer is no.
On top of this, there is a huge adoption for organisations to move to the cloud. In doing so, they alleviate themselves from paying the direct energy costs, yet a third party remains responsible, which is why businesses must then ask: have we understood the ESG agenda of this third party and our supply chain, and have we understood how much of the services they are delivering on our behalf are attributed to us? Are we then capturing that as part of our ESG agenda and if so, how are we calculating it and accounting for it?
While the answers are not straight forward, it is important that businesses understand the entire ecosystem of their activities and recognise that when something is on the cloud, for example, it simply means it’s in someone else’s data centre. Understanding where these third parties get their energy sources and accounting for them in their ESG strategies and reporting will give businesses and their stakeholders a more accurate and comprehensive understanding of their impact.