Where to spend IT in 2022... 7 'hot' 4 'losing' things

IT leaders are exploring ways to use technology to spur innovation and business transformation. Then, we look at which technologies are seeing an increase in investment, and which technologies are weakening or shrinking. 

Riding the wave of digital transformation accelerated during the pandemic, this year too, companies will be aggressively leveraging technology to fuel innovation and transform business operations. This requires investment in technology.

Knowing this, companies are increasing their budgets for new and existing technologies. According to Accenture, total digital spending is expected to account for 55% of total IT spending by 2023, up about 10% from 2021. 

Accenture's senior managing director, Ashley Skym, said this spending will be focused on four key areas: The first is an area where companies are ‘reinventing and innovating’, rapidly testing and prototyping new use cases to prove value in markets where speed to market is critical (e.g. AI, blockchain, AR/VR, etc.).

The second area is to grow the business while expanding and differentiating through 'innovative investments that create new capabilities or revenue streams', such as platforms for data and analytics. The third is to digitize the value chain through competitive business capabilities or process digitization, such as ERP/CRM, quality, and supply planning systems. The last is the technical capabilities needed to run a business and maintain security and compliance in data centers and networks, etc. 

Here, 7 'hot' IT technologies and 4 'cold' IT technologies that CIOs and IT leaders will invest in in 2022 are summarized.  

Hot: Cloud-Native Managed Services

KPMG's chief advisor, Mark Shank, said investments will be made to leverage cloud-native managed services. “In the past, companies were afraid of vendor lock-in due to cloud investments. Now, many cloud-matured enterprises are moving to cloud-native apps and are less afraid of being locked out. Because there are many advantages.” 

What are the biggest advantages? Best of all, according to Shank, is the ability to do more in a highly competitive IT talent market, where there is a shortage of talent. Previously, companies had their data lakes, and when they migrated to the cloud, they still had to manage the containers running their databases. 

“Today, companies say‘ I don’t want to be responsible for infrastructure ’and they use data services provided by cloud vendors,” he said. In this way, internal personnel responsible for managing cloud infrastructure can focus on other areas.

Kevin Martelli, senior adviser at KPMG agrees, “The fear of vendor lock-in is just as important as the services vendors can offer to be more agile, faster, and more cost-effective as companies adopt stacks and bring [products] to market. not,” he pointed out. 

Hot: Growing use of IoT sensors and analytics

Martelli said: "Despite the upward and downward trend of the drug curve, IoT sensors are starting to gain traction and more investment will be made in their management and monitoring." For example, companies use a large number of sensors and install private 5G networks to monitor energy, facilitate communication or monitor energy efficiency in warehouses. he said. 

Cold: legacy data warehouse, data lake, equipment, private cloud

Businesses are aware of many 'cost structures' due to legacy databases and data structures used on-premises. Now companies are taking advantage of the new technology, Shank said. As a result, financial support for legacy warehouses, data lakes, and equipment will be withdrawn, he added. 

In addition, he said, “In terms of the (growth) rate, investment in private cloud is also decreasing. “If you look at the industry as a whole, the growth rate was high, but then fell sharply,” he explained. 

"It's disappearing because on-premises data warehouse platform capabilities are being offered in the cloud, and vendors are helping to make these platforms available as a service," Martelli said.

Cold: On-premises data centers

Martelli noted that internal data center spending is steadily declining. “Enterprises are looking for opportunities to take advantage of the cloud,” he said. Because it costs a lot of money to manage our data centers, racks, stacks, and builds.” 

Hot: Employee Engagement Platform

Stephen May, CIO at healthcare provider ChenMed, said 2022 will be a year of restructuring and consolidating platforms to prepare them for growth. According to him, Chenmed is in a 'high-growth stage' and is evaluating whether there are appropriate platforms, technologies, and processes in place to achieve aggressive growth. This means that existing systems are scrutinized to see if they can handle this growth and scale. He continued, “Since last summer, we have made our employees work in the office every two to three days. “The technology investment will be made to operate in a hybrid model.” 

This includes focusing on employee engagement skills to create an enhanced employee experience. "We haven't picked any vendors yet, but overall this is the theme for 2022," May said. It is important to adopt employee experience tools and find ways to achieve a much richer employee experience in this new operating model.” 

May noted that she was looking for more than a simple collaboration tool she was already using. “There are tools to make spaces more fun and engaging, as well as video and audio conferencing and whiteboard sharing,” he says, citing a tool called Sococo that allows users to create digital versions of their office spaces. “Aside from that, a tool called Nooks is finding innovative ways to enhance social interaction,” he added. 

He also said he plans to invest in collaborations to experiment with building a 'complete metaverse' world. "If we're targeting 50% growth next year, the standard IT operating budget will grow similarly," May said. 

Hot: Data and Analytics

Raj Madan, the CDTO of Arcutis Biotherapeutics, a biopharmaceutical company specializing in dermatology, said it is investing heavily in its data and analytics infrastructure. “It includes basic data and analytics to monitor and optimize commercial operations, enabling teams that interact with dermatologists to proactively track insights and take action,” he explains. 

He went on to say that there will be more strategic initiatives related to patient and healthcare provider segmentation and targeting to maximize reach and engagement to meet the needs of patients suffering from skin conditions. Madan added, "We also plan to increase investment in marketing and advertising technology."

Meanwhile, he started investing in an agile way to experiment with a set of AI tools to see if they could help find proven or new goals. The results were disappointing. “The insights we got from these tools were no different from what our medical team already knew,” Madan said. Therefore, it was decided not to conduct further experiments in this field. This is a good example of 'failing fast. You learn a lesson and move on to the next one.”

"IT has requested a budget increase of about 20%," he said. "We've broken down our work into smaller chunks/sprints. If all sprints deliver value to Accutis patients, healthcare professionals, and staff, IT can receive more financial support." Demonstrating the value of your investment means investing more in data, analytics, and digital. " 

Hot: Machine Learning and Data Sciences

David Fellows, CDO at Acuity Knowledge Partners (AKP), a provider of research, analytics, and business intelligence to the financial services sector, said machine learning and data science will continue to be key investment focus areas. We are producing machine learning models."This year, we plan to focus heavily on machine learning operations (MLOps) so that infrastructure isn't a modeling bottleneck."

AKP is building its ML pipelines using AWS's SageMaker machine learning platform, he said. The goal, Fellows explains, is to allow new models to be deployed into production environments as often as they want, such as AKP offers SaaS-based apps and digital services. 

Hot: Customer Experience

Epson America's CIO Michael Wang will focus on several IT initiatives in 2022 to help its brand position itself as a 'business enabler' to its partners while providing 'world-class CX' announced that it will  

To that end, IT is exploring ways to better predict customer and partner needs by turning customer and partner data into business insights. “This seamless approach to value delivery, whether by building a system to notify end-users of the expiration of a warranty and providing extensions at the right time or a proactive B2B service to support the equipment (customers are using to run their business), is the “It’s a top priority for IT,” he said. By using data to prevent potential product problems, Wang added, enterprise customers can avoid downtime and ultimately lose revenue.

“We are also investing heavily to ensure smooth and uninterrupted interactions through our customer and partner portals. This is where we are focused on providing a world-class online interactive experience.” “Customers want to communicate the way they want, and IT has dedicated resources to examining how best to support that experience.” said. For example, Wang explains, allowing customers to manage all their interactions with a single identity. 

As purchasing patterns shifted from offline to online in 2021, Epson also increased financial support for initiatives to improve customers' e-commerce experience, Wang said. These programs will continue and expand in 2022. He said that the total IT budget has increased digital transformation investments by more than 50% compared to 2021.

Cold: On-premises workloads and hardware

Fellows noted that AKP's cloud strategy is very mature, but the pandemic has created a need to accelerate the migration of remaining on-premises workloads. “On-premises workloads are becoming a stumbling block. We will no longer invest in on-premises applications or server infrastructure,” he said.

Additionally, the AKP is reassessing its hardware strategy and related spending, Fellows said. “We currently have no plans to move everything to cheaper hardware or our hardware model, but we expect a DaaS approach that moves away from the traditional. end-user hardware computing model and facilitate capital movement going forward," he explains.

Hot: Security

Security has been a 'hot spend over the past few years,' according to Jason Johnson, CIO at music technology and instrument retailer Sweetwater, and that investment is expected to rise even further in 2022.  

This includes investments in vendor risk management following supply chain attacks and the expansion of borderless networks and telecommuting in 2021, he noted. “The adoption of public cloud, which we currently pursue as a long-term strategy, will grow in a direction that will accelerate our ability to provide strong, borderless security. networks,” he said. Meanwhile, AKP plans to invest in basic IT and cybersecurity initiatives, Fellows said.

Cold: 3rd party software development

“As agile business software development succeeds, development outsourcing will be replaced by in-sourcing,” Johnson said.

According to him, this will increase IT spending by about 25% from Capex spending and about 50% from workforce spending. “Most companies are currently investing heavily in IT as a function of their product/service leadership.