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If IT and business leaders can say anything about 2023, it’s that it was the year of “balanced growth.” In striving for this goal — growing topline revenues while simultaneously improving operational efficiency — many rightly prioritized operational transformation. But that was easier said than done at a time of surging inflation, rising interest rates, workforce reductions and the growing pressure placed on digital infrastructure and services.
The focus for the year ahead must change. It will be all about risk, revenue and resilience — driving growth and efficiency in digital ops through greater use of AI and automation.
Research shows that efforts to deliver new and innovative digital services to customers hit several hurdles in 2023. Analysis of critical incidents across the PagerDuty platform shows that incidents affecting revenue surged by nearly 13% in 2023 compared to the previous year.
Such incidents will inevitably occur, especially as organizations build out digital infrastructure to meet rising customer demands. Many of these incidents are a byproduct of the growing complexity that digital investment is creating. Operations teams and first responders are often overwhelmed by data flooding in from disparate systems. It can be a major challenge to prioritize alerts and streamline workflows. Surges in alerts coming in after work hours also leave teams feeling despondent, demotivated and exhausted. Burnout is a constant risk.
To achieve balanced growth, organizations must invest in tools and strategies to tackle such challenges. That’s why it’s heartening that 71% of organizations say they’re looking to expand investments in AI and machine learning in 2024.
Automation is another response to today’s digital ops challenges. In fact, 76% of organizations report that their company is pursuing workflow automation. But there are caveats. Data security, budget and finding the right IT partner are cited as the top three automation challenges.
It’s becoming clear that business and IT leaders don’t necessarily view the rate of digital progress in their organizations in the same way. IT leaders report more headway being made across seven different areas. Notably, there’s a 24 percentage-point gap in those that agree with the statement: “Our company’s IT processes help our employees to be productive.” The gap is an even greater 29 points when asked to confirm whether IT operations are more mature than they were 12 months ago.
How can we explain the disparity? It may be that IT is closer to projects and sees benefits and results that business teams find harder to discern. Or it could be that IT leaders are biased because they’re too close to operational transformation efforts. Either way, there’s a clear disparity in perception on the rate of digital progress between IT and business teams.
The good news is that none of the above concerns represents an existential challenge for organizations. Here’s where to focus digital operations efforts for the coming year:
Business leaders are far less optimistic about progress on operational transformation than their IT peers. This is true across everything from employee productivity to time to market and customer experience.
Bridging this gap must be a strategic imperative for organizations looking to turn digital operations projects from a cost center to a growth engine. IT leaders must try harder to demonstrate the value of their operational transformation projects and the progress they’re making. It may require IT and business leaders to decide together on KPIs and other milestones that could be used to help measure this progress. This is especially important in the context of multi-year transformation journeys.
As digital-centric companies find new ways to enhance customer and employee experiences, the complexity and size of their backend infrastructure will only grow. That, in turn, will inevitably lead to a rising number of incidents. To minimize the impact of these on customers, the bottom line and the company’s reputation, organizations must adopt a proactive response based on scaling their capabilities with automation and AI.
This proactive approach will help to reduce alert fatigue, detect issues before customers notice, streamline operational workflows with intelligent solutions and ensure that people and teams are focused on strategic, high-value work. For organizations in some sectors, like financial services, it may require more work on governance guardrails to mitigate any privacy or data security concerns. But to do more with less, reduce human error and eventually get to a place where incidents are preemptively addressed, adoption of AI and automation must be the ultimate goal.
The top operational priorities for IT and business leaders as they head through 2024 are improving security and reducing risk. Both groups also rate building operational resilience and supporting revenue growth within their top four priorities. This is the case across industries and demonstrates a clear and aligned commitment to where the strategic focus should be over the coming 12 months.
Over half (57%) of respondents say that their 2024 budget will exceed that of 2023. Cloud services, cloud storage and security infrastructure top the list of priorities. But wherever money is spent, investment must be strategically aligned with core business goals to have the biggest beneficial impact. Risk can be better mitigated through phased deployments, reskilling employees and strong change management programs.
While 2023 was a year when organizations launched tentative pilots for AI and automation, the year ahead is likely to see more accelerated progress. As capabilities become embedded within core operations, huge gains are potentially up for grabs.
For the best guarantee of success, technology decision-makers must explain their priorities to teams and peers. They must empower users with the right solutions. And they need to create a roadmap of AI-powered digital ops that’s right for their organization and industry.
