It seems that labels are often problematic but humans like to use them. We use labels to classify complex groupings for different reasons. Sometimes as a shorthand. Sometimes knowing the definition is wrong. My favourite in common use is the idea of fish:
There is no such thing as a fish
In other words, there is no definition that defines all fish; there are exceptions to every rule you can think of. For instance not all fish live in water. And yet the term is useful. When we say fish markets we know what we mean and where would the English be without our beloved “Fish and Chips”.
Over the last weeks, I have heard CIO’s and IDC Analysts classifying our current situation in ways that you might find useful. In this fast-moving situation, it is useful to have a shorthand to group things. The first set of labels I noticed referred to the reactions of an organization to the crisis:
- Survival: Hit a deathblow by circumstances. Operations have stopped, or are running at a skeletal level, and IT is minimal while all the focus is on financial survival.
- Reduction: the business model of the organization is not affected, but there is a focus on cost reduction.
- New business direction: The existing business model is not working. IT is being used to digitize to leverage assets in a different way or with a different business model.
- No change or booming. Yes, there are industries that boom in a crisis such as this with little or no change. The Tobacco and the Gaming industries are examples.
So are theses classifications or labels always complete and mutually exclusive? No. Can they be useful, maybe?
Our world is fast-moving at the moment and I am sure all of us know where our organization fits. One example is the UK high street retailer which looks like they are currently in Survival mode with no route to market at present. The same for airlines.
That said not everyone in a sector has the same label: some reduce while others look for new business opportunities and grow. I have heard stories of wonderful achievements where 6-month projects have been put into operation in weeks.
Why does this matter? I think it will matter when combined with another set of labels. The stages we are going through.
IDC analysts are using the following labels to mark different situations and focus:
- Covid-19 Crisis: All about business continuity
- Economic slowdown: A focus on ROI
- Recession: Operational resiliency
- Return to growth: Targeted investments
- Recovery: The Future Enterprise
These are useful. For most of us in IT there short-term work of the crisis is done. Yes, we have to work to normalize the situation. And complete some short term actions but it is mostly done.
For those in the Reduction category, we are either in the process of redefining our portfolios and adjusting budgets to prepare for the deepening Economic Slowdown and prepare for the coming Recession. I will write more about how CIOs are doing this in coming blogs.
For those in the Booming group, the focus is on supply chain and operational resilience. This focus will follow soon for the other groups. With the obvious exceptions of those that don’t survive.
IDC believes that 1H202 will turn out to be about agility. Especially I think for organizations in the New Business Direction grouping.
So what happens after that? One answer is that recent events have shown that digitization gave massive advantages to organizations. In the areas of resilience, cost-saving and business growth. So if you look at the above stage model you may agree that from the second half of 2020 there should be a focus on digital in your organization.
IDC believes that IT is going to be a key part of surviving and thriving through the coming period. It will be fundamental to the Future Enterprise. Early indicators that IT will be the engine of the future in Europe comes from IDC research that shows the disparity that is emerging between the expected decrease in revenue (77%) and the expected cut in IT spending (28%).
So thinking about the future using these labels it may be easier to anticipate what will happen. Yes, we have to plan for and act to survive the slowdown and the recession but don’t forget to position your IT division, and yourself, to lead into the future.
If you agree or disagree we would love to hear your opinion. Please let us know what you think.