3 Ways Top Companies Will Boost Digital Innovation in 2022
2022 is set to be a critical 12 months for corporate IT and digital leaders. The past two years witnessed unprecedented levels of investment in cloud and related technologies.
In many cases, technology investments helped to steady the ship when it was rocked by the pandemic and a shift from in-person to digital commerce. New technology investments were made to support mass hybrid working, streamline business processes and enable organizations to adapt to the rapid emergence of digital-first consumption models.
Now comes the hard part: driving continuous digital innovation and performance improvements to stay competitive. Playing it safe is not an option. Organizations able to maintain an innovation focus typically outperform the market by as much as 30% in post-crisis years, according to McKinsey research.
As digital transformation enters a new phase, we expect leading companies to continue to adapt to continue innovating. Many elements will drive success, ranging from the way developers are supported to pragmatic infrastructure choices to being realistic about complexity. Here, we have organized these drivers into three key themes that will empower leading companies to accelerate digital innovation and thrive in 2022.
- Leading companies will explicitly invest in developer productivity.
Developers sit in the engine room of the digitally innovative enterprise. Yet, the tools they use have historically been unwieldy, low-powered, tied to local endpoints and demanding a high degree of manual configuration and management. This is changing. We’re seeing the continuing rise of the “developer tools” team, whose internal customers are software developers. More organizations are transitioning their teams to cloud-based DevOps and CI/CD platforms like GitLab/GitHub and features like GitHub Actions and Codespaces.
Why the move? In short: to better equip developers and thus better facilitate innovation. Application architectures have become too complex and compute power demands too great to maintain the status quo. Savvy companies will exploit new approaches to reduce the “works on my laptop but not in production” problem that plagues many projects. They’ll also look to these new environments to solve the persistent challenge of continuous delivery.
This shift enables organizations to have the same complex environment for cloud development as in production. And this more performant development environment can be better than any laptop. That’s good news for everyone; McKinsey also found that firms with higher developer velocity reap revenue growth up to five times greater than their lower-velocity peers.
- Leading companies will avoid over-engineering infrastructure.
Some 92% of enterprises now have a multicloud strategy, and 80% have a hybrid cloud strategy, according to Flexera research. In the short term, those pursuing multicloud will continue to invest in different vendors and burn through large piles of cash doing so. But how many are actually achieving the best results by doing so? According to IDG, 79% of organizations are struggling to realize the benefits of multicloud with workloads remaining locked in silos.
This is happening because many companies have been pursuing multivendor cloud strategies for the wrong reasons: avoiding lock-in rather than driving advantage by cherry-picking best-of-breed features. In 2022, many of these multicloud projects will generate negative return on investment, forcing a rethink. Ultimately, organizations that accept the future is largely hybrid cloud rather than multicloud, will succeed.
This will involve an element of pragmatism. Engineering leaders will choose the execution venue that’s the right fit for their code based on the best features in each environment, rather than adopting multicloud purely based on dogma around vendor lock-in that won’t add value to your business. This approach also allows organizations to do more with limited in-house skills and focus on what they’re good at: innovating rather than replicating multiple robust cloud environments.
- Leading companies will ruthlessly reduce complexity.
Today’s enterprises might be running thousands of digital services with millions of dependencies that could change in milliseconds. Microservices, containers, serverless architectures and orchestration platforms create a huge amount of complexity. The demand for more innovative customer experiences will only increase. But complexity cannot. It’s simply not sustainable. In other words, might there be a “Dunbar’s number” for system complexity?
The answer is yes. We’re seeing stirrings of a backlash against the complexity of some approaches like Kubernetes and the surface area it takes to deliver business value through it. We’re also seeing increasing adoption of managed services offered by cloud service providers. Such services — for example, managed database services — automatically deliver scalability, reliability and redundancy rather than forcing organizations to engineer all these characteristics themselves.
There are two other moves that leading companies are making to combat complexity. First is to invest explicitly in real-time dependency management to give engineers a clear picture of how digital systems are related, even as the overall system changes daily. This allows them to monitor, manage and remediate digital incidents in real-time before users and customers notice. Second is to invest in automation to hide the inner complexity from those who need to perform tasks. Research shows that 73% of tech leaders have invested or plan to invest in automation to tackle complexity and the rising pressure on digital services.
Empower teams and spend more time innovating.
To successfully accelerate digital innovation in 2022, these three approaches will be essential. Organizations must free up developers’ time so that they can do what they do best and innovate, rather than simply keeping the lights on. Pragmatic engineering decisions and investments that focus on optimizing developer productivity are central. Embracing automated capabilities that minimize toil and maximize creativity also have a vital role. For companies seeking to become leaders, this is the blueprint for success.