Published on the 24/01/2023 | Written by Heather Wright

Finding resilience through smart tech investment… 

Sam Higgins is fired up about creative resilience and finding pragmatic ways for CIOs to help guide their businesses through the current economic uncertainty and global instabilities. 

Forrester’s Sydney-based principal analyst, he believes the current environment calls for a significant rethink.

Traditional measures, including cost cutting and wage freezes, may not work in an economic environment not seen since the 1970s, when stagflation – that blend of stagnation and inflation, with high inflation and unemployment and stagnant production ­– saw Australia and New Zealand plunged into recession.

“The service provider is becoming a talent gear box between tech providers and enterprises.”

Enter ‘creative resilience’. 

“From Forrester’s perspective, business resilience means maintaining your brand no matter what the crisis. 

“Last year’s crisis was a supply chain challenge and the war in Ukraine. This year’s crisis is economic uncertainty, ongoing energy problems – again based on conflicts – maybe a change in geopolitics,” Higgins tells iStart. 

“Creative resilience then is understanding that while we have to maintain that brand promise there is always opportunity for us to apply the unique and innate ability of human beings to come up with new and novel ways to solve for these problems to address uncertainty, to scenario plan. And if we can do that, there is always opportunity for us to lay then the foundation for when the uncertainty settles and we can start to adapt and start to be more creative with the topline.” 

So what are some of the things Higgins, and Forrester, believe will be part of creative resilience? 

Maintain a – pragmatic ­­– emerging tech focus  

“Rather than shutting down everything to do with emerging technology, we need to be really pragmatic about looking at those technologies,” Higgins says. 

Technologies which were emerging five years ago, are now maturing.  

“A classic example is we’re now actually starting to see practical use cases for blockchain and DLT in the financial services industry. 

“Pretty much every central bank in APAC is doing something now. Some are just doing wholesale, some are doing wholesale and retail. But the fact is they are well on their way. 

“So go back, look at your emerging technology portfolio and anything that is younger than five years, maybe hold off on that, but don’t shut it all down. 

“Don’t shut every emerging technology down because there is value in maintaining your emerging tech focus inside your creative resilience, but don’t be chasing the metaverse.” 

While that might sound like simple good business, Higgins says during growth cycles taking more risk is  a good thing to avoid being left behid. 

“The chance of disruption is lessened at the moment. That’s really the dial we’re turning.  

“What we saw in the last five to 10 years was a lot of cheap money and therefore a high risk of disruption, so as a business you had to have a high-risk appetite as well in order not to be left behind.  

“Now it’s about reassessing your risk appetite because you know the risk of disruption will be lower in a tighter market.” 

Sort out your long-term talent strategy 

With all the news of mass layoffs – or rightsizing after several years of overhiring – by big tech companies globally, it’s easy to think the skills shortages will soon be a thing of the past and we’ll soon be awash with talent. 

“I don’t think that’s going to be the case,” Higgins cautions. “We think CIOs really need to sort out their long-term talent strategies now.” 

And that means looking at the total package on offer, including remote work, flexibility and all other benefits.  

“A lot of organisations don’t want to increase wages under the current inflationary pressures, so there is the opportunity to think pragmatically about what type of employee experience you offer, particularly around technology. 

“We know in our research that technology is one of the major influences over people’s employee experience.” 

Fragmented application environments are a key area of contention for employees. For CIOs they’re also an opportunity to be pragmatic about innovation and attach it to an opportunity to not only consolidate and create a better employee experience, but potentially get cost out. 

The HCM question  

And on that note, one area Higgins sees as a key growth area is HCM consolidation and renewal – something he is receiving a lot more enquiries about.  

“People are seeking to optimise it and that’s probably coming from the fact that in order to secure talent, and keep people happy in their roles, you need to have better decisions and better information – and the fragmented, traditional HCM space isn’t providing that.” 

So expect to see HCM as a hot area in the coming years. But Higgins notes it’s not a quick project and there’s a danger too, that, as with the SAP and ERP replacements of a decade ago, we will find ourselves with a scarcity of HCM consultants before too long.  

“So while it’s a space people are looking to go into, the other piece of advice is just be aware that if you do follow the trend in a particular area of focus everyone has, then that does put constraints on the market, it puts pressure on vendors to deliver and what you thought was going to be a 18 month project can suddenly turn into 3 years. There’s that downside risk.” 

Side-sourcing – it’s not outsourcing, it’s not insourcing, it’s just right… 

Building a talent engine to keep up with the hyperscalers and their constant flow of cloud and SaaS updates, is another issue Higgins is hearing from clients across A/NZ. 

The likes of Microsoft and AWS have the scale to spin out updates and new innovation rapidly, but it’s leaving companies struggling to harness the benefits. 

“What I’m hearing from even big organisations is that they just can’t train their people fast enough. 

“Particularly in A/NZ, we just don’t have businesses that are big enough to build talent engines that can spin at the rate that the technology providers are providing us with new stuff.” 

Big service providers, such as Accenture and PwC, are now offering what Higgins terms ‘side-sourcing’. They’re keeping their teams trained and certified, keeping up with the hyperscalers, because they can afford to cycle talent around the multiple jobs underway. 

Now, they’re enabling staff members from client companies to join their business for a sprint cycle on a technology they need to be certified in, switching in one of their own staff at the client business. When the client staff member is certified in the new feature set, they return to the client business.  

“It’s not a traditional service, it’s almost like semi-university.” 

It is, he notes, a very different contractual relationship and one that requires a high level of trust. 

“But effectively, the service provider market is becoming a talent gear box in between the hyperscale tech providers and enterprises.” 

Get a cyclic view of organisational change management 

Higgins questions why, in a world where we all know change is constant, change management has continued to be very linear and there are no methodologies for constant change. 

“We think there should be a much more cyclic view of organisational change management and change generally.” 

He notes one CIO of a large 1,200 staff financial services business saying he needed full time trainers to continually go around the business educating staff on the newest features and how to be more productive using the tools, with the information specifically targeted to the business. 

“I think it is a blind spot and one for CIOs to think about,” he says. 

Higgins says CIOs need to be prepared for more change.

“I think we will see more of these spiky events – recessions more often but not so deep,” Higgins says.  

“The idea with creative resilience is to not pivot so far to a place of pure resilience when we know we are always going to be dealing with these uncertainties.  

“Some of that means asking ourselves occasionally if all we are doing is making sure we can maintain our brand promise or are we spending some of our time thinking about where those future opportunities might be? 

“Total cost of ownership is not enough. We really need to think about the total economic impact on the business, and that includes future flexibility as an example. In the same way we think about cost and risk, we need to think about what it means if we don’t have the ability to do some things in the future.”