Executives working to strengthen their organizations’ resilience will need to invest in people and technology, while keeping one eye on the market and the other on the political landscape
Disruption is increasing in intensity for industries around the globe and raising levels of uncertainty for many organizations in Europe. This includes growing inflation and a potential recession, with collective action at the EU level complicated by differing national priorities. Europe’s manufacturing-intensive supply chains are disrupted by conflict and looming energy shortages, and the region’s many small and medium-sized businesses are struggling to find the tech talent needed for their digital transformation projects.
So how can executives respond to these challenges? This blog identifies five technology priorities for the European C-suite in the next twelve months and recommends actions to strengthen organizational resilience.
These priorities are:
Bridge Execution Gaps in Digital Transformation
Investment in digital transformation in Europe has accelerated during the pandemic and is being further boosted by regional investment plans and country recovery packages. However, the transformation opportunities offered by this investment require skilled people, and they are in short supply.
This creates a challenging environment for the European C-suite, who need to navigate growing inflation and project costs, along with a lack of expert technology skills. Fortunately, over the past two years many executives have gained experience the needed to identify and avoid execution gaps and will be able to apply those lessons learned to today’s uncertain environment.
Sharpen Sustainability Strategies
Rising European energy prices are increasing corporate focus on environmental goals, in particular the use of renewable energy sources. Energy prices had already risen steeply in 2021, but the Russia-Ukraine war dramatically accelerated this trend and motivated many European governments to swiftly decouple from Russian energy providers.
73% of CEOs believe that technology investments will play a critical role in meeting environmental, social, and governance (ESG) goals. (IDC Worldwide CEO Survey Part 3, March 2022).
These European energy policy changes are structural and will influence economies across the region for decades. This offers an opportunity for the European C-suite to align their organization’s technology investments and sustainability strategy, while also communicating this to the market to enhance brand reputation.
Transform Transparency in Supply Chains
Over the past two years, organizations across all industries have worked to improve their resilience to supply chain shocks resulting from the pandemic. However, this is being tested by persistent disruption, which poses particular challenges for European organizations, especially in manufacturing (given the prevalence of this industry across the region). Supply chain maturity is also lacking, and IDC research shows that 39% of European organization are in the “reactive” stage (IDC MaturityScape Benchmark: Digital Supply Chain Resiliency in Europe, May 2022).
Supply chain constraints are predicted to persist throughout 2022 and into 2023, with some industries (such as semiconductor manufacturing) attempting to improve resilience by investing in supply chain diversification. Long-term progress will require the European C-suite to take tangible steps to increase transparency, resilience, and maturity in their supply chains.
Strengthen Cyber Resilience
Cyber security remains a top priority for the European C-suite. This prioritization is also shared by the European Commission, which is updating the Network and Information Security (NIS) Directive to streamline incident reporting and introduce more stringent supervisory measures and stricter enforcement requirements for critical infrastructure.
80% of CEOs consider cyber security to be highly important (IDC Worldwide CEO Survey Part 3, March 2022).
Consistent sponsorship is needed from the European C-suite to support security teams with effectively defending their organizations against cyberattacks and to conduct scenario planning to rehearse how the organization will respond to incidents.
Deepen Due Diligence on Digital Sovereignty
Digital sovereignty is increasingly a topic of interest for European organizations. It has been brought into focus recently by the Russia-Ukraine war, but the broader topic has been gathering policy momentum for years and focuses on resilience, control, and management of technology infrastructure.
42% of European organizations are strengthening due diligence of their cloud service providers to clarify hosting capabilities and legal, privacy, and security safeguards related to the European General Data Protection Regulation (IDC: Sovereign Clouds and the Digital Sovereignty Imperative: Europe’s Quest for Digital Independence, May 2022).
It is essential for the European C-suite to conduct robust due diligence when making investments that could impact the digital sovereignty of their organization. This is particularly applicable to cloud services.
Conclusion
2022 was supposed to offer the beginning of a post-pandemic economic recovery in Europe. And while some of this recovery will be realized, there is the potential for it to be delayed or dampened by economic headwinds and the regional impact of the conflict in Ukraine.
European C-suites are finding that one major headwind — the pandemic — is dying down, while others are emerging and becoming storms of disruption. The coming year will be busy for the C-suite. Close attention to these five priorities is needed to strengthen resilience and prepare for the uncertainty of today and the disruptions that lie ahead.
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For more information, please contact David Clemente or head over to https://www.idc.com/eu and drop your details in the form on the top right.