CIOs Focusing On Composable, Avoiding Compostable

An economy destined for digital: 65% of global GDP will be digitalized by the end of 2022. (1)

IT spending on the rise

With two-thirds of the world’s GDP enabled through technology, it’s no surprise that we’ve seen—and will continue to see—tremendous growth in the IT and IT services markets.

Gartner forecasts worldwide IT spending to surpass $4 trillion in 2022, reaching $4.5 trillion by 2023. (2) CIOs expect IT budgets to grow 3.6% compared to 2021, the fastest growth rate in more than a decade. (3)

“2022 is the year that the future returns for the CIO,” said John-David Lovelock, a distinguished research vice president at Gartner, in a press release. (4)

Alongside the overall IT growth, the global IT services market size also grew to $3.74 trillion in 2021, and the market is expected to grow at a rate of 11% per year and reach $5.73 trillion in 2025. 5

Where do CIOs direct their investments?

There’s no lack of IT-related projects available to choose from. One or more can come together to modernize an organization to prepare for a future where nearly everything will be tech-enabled.

To bring focus to the potential investments, Gartner offers that CIOs and IT executives should lead anywhere…by ensuring enterprise and talent readiness, nurturing connections to ensure ecosystem readiness, and reaching beyond by using technology and social readiness. (6) From a project and technical perspective, it’s worth looking at trends to paint a picture for the future.

For example, in 2020, within the enterprise application software market, the cloud market became more prominent than the non-cloud market for the first time. This was due, in part, to the coronavirus pandemic—Gartner projects the cloud market to double the size of the non-cloud market by 2025. The cloud is now responsible for nearly all 11% spending growth within the enterprise software segment. Organizations are focusing on upgrading their software stack to software-as-a-service (SaaS) to support continued flexibility and agility. (7)

Cyber and information security remain at the top of the list of planned investments for 2022. 66% of organizations plan to increase investments in security. Business intelligence/data analytics (51%) and cloud platforms (48%) are the following top spending priorities. (8)

Artificial intelligence (AI) and machine learning (ML) top the list of technologies planned for implementation—with 48% of technology executives having already deployed or planning to deploy AI and ML during 2022. The distributed cloud (44%) follows. (9)

These stats also align with the CIOs view as uncovered by IBM: IoT (60%), automation (59%), 5G (49%), and AI (48%) rank highest as planned technology investments in addition to the cloud. (10) Furthermore, most high-composability enterprises have already deployed or plan on deploying in 2022. These technologies are a catalyst for business composability because they enable modular technology capabilities.

CIOs are also reporting higher levels of maturity in hybrid cloud operations. Since 2019, there has been a 700% increase in CIOs who report having deployed advanced capabilities. AI-enabled workflows (560% increase) and cloud-native development (467% increase) are among the leaders. (11)

What does composable mean?

According to Gartner, composable organizations follow these practices: (12)

- Composable Thinking
- Composable Business Architecture
- Composable Technologies

Wise investments in composability can drive significant long-term returns. According to Gartner, high-composability enterprises increase revenue and budgets faster, leveraging IT better. They also project nearly an 8% increase in revenue while expanding their IT budgets by about 4%. (13)

Staffing should be composable too

A contentious talent war continues across the spectrum of IT engineering. This reality will only grow in pressure, complexity, and impact. Organizations look to deliver more value to their customers and partners by diverting highly sought technical staff away from routine, mundane tasks that machines, software, and automation can otherwise accomplish.

Case in point: Organizations have automated 20% to 40% of business processes according to CIOs. This includes supply chain, manufacturing, finance, procurement, marketing, and research and development. (14) And, as reported by Gartner, organizations expect to increase their reliance on external consultants as greater urgencies and the accelerated pace of change widen the gap between digital business ambitions and available internal resources and capabilities. (15)

This points to a growing trend: changes in staffing solutions could look like those of the cloud operating model. Specific resources are identified and selected from a talent provider on an as-needed basis for as long as necessary. Organizations return the resources to the talent pool once the activities are completed and the business objectives are met.

Connecting these points, most large organizations will use external consultants to develop their cloud strategy over the next few years. “Staff skills gaps, wage inflation, and the war for talent will push CIOs to rely more on consultancies and managed service firms to pursue their digital strategies,” said Lovelock in a CRN article. (17) Lovelock added in a Computerworld article, “unfortunately, CIOs are at a disadvantage when attacking top talent—there is more money and better opportunities within [technology service providers] for top IT skills. To maximize the productivity of their existing IT staff, CIOs will be outsourcing more to free up time, training existing staff in the desired skills, and hiring consultants to fulfill critical skilled roles. This will last at least through 2022.” (18)

Avoiding the recycle bin

As the research suggests, it’s critical for CIOs and other technology leaders to shift their strategy to become a composable organization—both in terms of deploying new technologies and managing their internal staff. Without making the transition, IT runs the risk of becoming compostable—where IT services and resources are considered assets that can be recycled.

Citations:

1 – “IDC FutureScape 2021,” IDC, Accessed on January 27, 2021

2 – “Gartner Forecasts Worldwide IT Spending to Exceed $4 Trillion in 2022,” Gartner, October 2021

3 – “2022 Gartner CIO and Technology Executive Survey,” Gartner, October 2021

4, 7, 15 – “Gartner Forecasts Worldwide IT Spending to Grow 5.1% in 2022,” Gartner, January 2022

5 – “Companies In The IT Services Industry Introduce Multi-Cloud Solutions, Helping Growth Rate Reach 11% As Per The Business Research Company’s IT Services Global Market Report 2022,” The Business Research Company, January 2022

6 – “Gartner Identifies Three Key Focus Areas for CIOs to Drive Value,” Gartner, October 2021

8 – “Gartner Survey of Over 2,000 CIOs Reveals the Need for Enterprises to Embrace Business Composability in 2022,” Gartner, October 2021

9 – “IT Budgets Are Growing. Here’s Where the Money’s Going,” Gartner, October 2021

10, 11, 14 – “The CIO Revolution: Breaking barriers, creating value – C-suite Series: The 2021 CIO Study,” IBM, November 2021

12, 13 – “2022 CIO and Technology Executive Agenda: A Banking and Investment Perspective,” Gartner, November 2021

16 – “IDC FutureScape: Worldwide Future of Operations 2022 Predictions,” IDC, November 2021