Of all the resolutions you make for your company in 2024, there is likely one above all that will significantly change the course of your business – and the costs to run it – over the next several years. Here, I’ll make a case for why it’s never been more important to develop an efficiency mindset for our technology environments in 2024, and the steps to take to create one at your organization.
Even with the strides being made in robotic process automation (RPA), artificial intelligence, and machine learning to make our processes more efficient, there is still much more to be done. As budgets continue to tighten in 2024, it seems that the requests for innovation are only going up. How can we balance supporting legacy technologies while building for the future?
To focus attention on how to best spend limited technology budgets requires more than automation and cost cutting. It requires a design and cultural shift at your company since the growth of technology is only increasing and we are already struggling to maintain what we have today. We need a top-down vision and a plan to meet the challenges of 2024 and beyond.
The state of business in 2024
In a nutshell, here is what the state of business technology looks like as we enter 2024:
- Businesses are making greater demands on their technology teams.
- The rate of data expansion and data acquisition is increasing every day.
- Businesses are increasing their velocity and growth in new technology, even at the expense of maintaining their legacy technology systems.
- Legacy technology still needs to be supported and becomes more of a business and security risk as each system continues to age.
- Businesses want to invest in Artificial Intelligence (AI,) Machine Learning (ML), the Internet of Things (IoT), and Blockchain but they are unsure which technologies to invest in, where to start, and if they will realize the value they were promised.
What does this mean for technology spending and sustainability?
According to Gartner’s most recent forecast:
- Worldwide IT spending is projected to total $5.1 trillion in 2024, an increase of 8% from 2023 – and this increase is generally not considered to be due to generative AI. (The Wall Street Journal reports “more sobering perspectives” regarding AI as the year kicks off.)
- Global spending on public cloud services is forecast to increase 20.4% in 2024, and similarly to 2023, the source of growth will be a combination of cloud vendor price increases and increased utilization.
Also from Gartner:
- By 2027, 80% of CIOs will have performance metrics tied to the sustainability of the IT organization.
How are you measuring the health, efficiency, and environmental impact of your applications and processes today? Most likely, you are focused only on technology health, which is important as this is what runs the business. But what if your processes were 30% more efficient – how many more transactions could you process at no additional cost? How much money would you save today, let alone over the next five years? What if this “savings” could translate to less impact on our physical environment as well?
How to develop an efficiency mindset in 2024
Here are eight ways you can work to change the mindset at your organization when it comes to addressing the velocity of technology and its impact on your technology systems.
- Learn from each event
Current mindset: When something breaks down, fix it, and move on.
2024 mindset: When something breaks down, fix it, and perform a root cause analysis. Solve the real issue by identifying short- and long-term actions to take that can truly address the issues. Investigate analytics tools that specify actions, not just provide more data when looking to minimize outages and downtime.
- Evaluate the cost of design decisions
Current mindset: Developers design a technology solution or application, but the costs are not truly known until it is in production and actually processing transactions. Then the CFO asks why the technology bill is higher than expected and wants to find ways to reduce it.
2024 mindset: Consider the Total Cost of Ownership for all technology design decisions. This entails applying the cost model in the design phase of the project and making modifications to reduce costs, while still meeting the business and technology goals. Evaluate the total cost of code and total cost of data while the application is being built. Only then will you have a firm grasp on true budget costs.
- Don’t be a data hoarder
Current mindset: Store all our data because we may need to access it one day and it must have some value.
2024 mindset: Take control of data hoarding by implementing data and lifecycle policies, performing data audits, investing in data management and compliance tools, establishing a data governance framework, and instituting employee training and awareness around new data retention policies.
- Encourage collaboration between the business and technology teams
Current mindset: Technology and finance are siloed operations and speak different languages.
2024 mindset: Everyone needs to speak the same language, the language of financials. Ensure your CFO claims their rightful seat at the table early on, when technology decisions are made. Teams should be prepared to answer questions that speak to the value their budget requests will bring to the organization – along with the costs, both now and in the future – and how this value translates to impact. What’s more, teams should be evaluated based on the value they create for the business, not the number of tasks they complete. Further, teams should be rewarded for focusing on the efficiency of their designs and implementations that help reduce long-term costs.
- Develop a culture of ownership
Current mindset: Blame the technology team when something goes wrong; there is little to no partnership with technology.
2024 mindset: Encourage team members to find and admit mistakes early on. Issue a company-wide “no-blame” policy. The sooner mistakes are caught, the more it will save your company down the road, as the implications of bad code compound. Also, the business needs to be closer to the technology teams and projects. Everyone is a technologist in the age of AI and other services that enable regular users to build and create.
- Train for issues and disasters
Current mindset: Our teams have one goal, keep the system up and running to process mission-critical transactions. If the system goes down, solve it, but “if it ain’t broke, don’t fix it.” When the system does have an issue, teams are not trained to handle crises or properly troubleshoot.
2024 mindset: Train for issues and disasters, especially in the age of AI, when there is so much we don’t know about what could possibly take down our systems. Prepare teams today for troubleshooting issues tomorrow by introducing regular knowledge-sharing sessions and workshops, using simulated training environments, recognizing and rewarding proactive behavior, encouraging continuous learning and development, and cultivating a mindset of swift action and resolution. Firefighters are continually trained, even when there is no fire. Our technology teams need to adopt a similar mindset.
- Prioritize tech debt over new features
Current mindset: Create new features to keep up with demands from the business, even at the expense of maintaining big, complex systems efficiently and accumulating tech debt.
2024 mindset: Part of maintaining big, complex systems is the reduction of tech debt and identifying issues in non-production – before they can get into production and potentially harm your environment. Pledge to have 80-90% of the tech team’s work be innovation-focused and 10-20% devoted to identifying and resolving tech debt, waste, or outdated technology that can be eliminated.
- Embrace green technologies
Current mindset: Green practices are adopted for compliance reasons but few organizations see a need to go beyond this.
2024 mindset: When it comes to technology, “going green” is not a nice to have, a buzzword, something that looks good in your annual report, or done solely for complying with ESG governance. It is a top-down mandate that organizations adopt as part of their efficiency mindset, understanding that environmental costs matter just as much as any other. Get started by making a pledge for sustainable development, implementing green coding practices, replacing your linear economy approach with a circular one, and instituting employee training and awareness practices.
Only by committing to a change in prioritization and mindset now, will we be able to build technologies that will be simpler to support, less costly to operate, and less damaging to our natural environment in the future. With the pace of innovation and data increasing at disproportionately higher rates than in past years, if we do not change our mindset, all the contributors to the velocity of technology will only continue to exacerbate the challenges that lie ahead.
For more on how to evaluate your technology systems to see where a mindset shift at your company can have the most impact, implement an annual technology review or take a technology assessment.