Apptio: Cost management platform's predictions for 2022
In this extended list of Predictions for 2022, Apptio executives will discuss the following topics in detail:
- Increasing use of agile to optimise ROI as skill shortages increase: Agile offers a solution for IT leaders specifically to improve output without hiring in more staff/making up for skills gaps in their workforce.
- Technology leaders will be focusing on evolution, not revolution: In 2022 and following years, the focus for many technology leaders will not be on revolutionising their use of technology, but evolving it on a smaller level.
- Increased focus and accountability on tech sustainability: Many IT leaders will need to be able to provide information on the environmental impact associated with the use of their businesses technology, and how to mitigate them.
- Optimising following the SaaS shopping spree of 2020 and 2021: Leaders will have to revisit their SaaS product usage to identify any unused or underutilised tools which are potentially wasting budget.
- Facing the altered hiring reality: Rapid transformation and the need for operational efficiency means more hiring is needed. But this comes amidst the largest global labour shortage on record. Experience in cloud platforms in particular will be one of the most in-demand qualifications over deeply technical skills.
- Slowdowns caused by scaling agile: While it can be exciting for more teams to be embracing Agile and adapting to external changes, doing it at scale can make payoff difficult to prove. At this point, there will likely be a descaling phase which sees large companies split their development teams into smaller units.
Comments below from Henrik Nilsson, Vice President, EMEA
Increasing use of agile to optimise ROI as skill shortages increase
A trend that started this year, but is set to continue, is that business leaders are having to do more with less, as many employees have changed roles or even entire industries. Agile offers a solution for IT leaders specifically to improve output without hiring in more staff/making up for skills gaps in their workforce. However, this will need to be accompanied by proper governance and reporting approaches/tools to help square agile processes with the needs of CFOs and CEOs.
While it seems likely that adoption of agile will grow, CFOs are still hesitant to invest due to challenges around planning and reporting. Finance leaders need to understand the value coming from a project, which means constant updates on how much is being spent on both technology and labour, and the resultant ROI. This requires a burdensome reporting process for dev teams which is completely at odds with the concept of agile itself.
To solve this, CIOs need to invest in processes and tools which allow for the automatic reporting of costs and ongoing tracking of value. Key to this is the discipline of Technology Business Management (TBM), which involves using frameworks that treat IT as a business within the business, linking IT costs to business value.
With these processes in place, the gap between waterfall processes in finance teams and agile in tech teams can be bridged. Tools can be used which automatically log both labour and tech costs associated with tech teams and translate them into insights that are reportable against waterfall processes from finance. This is a vital step in enabling agile development and plugging the current resource shortfall that many businesses are experiencing.
Technology leaders will be focusing on evolution, not revolution
The increased adoption of new technologies to adapt to the pandemic means that most large organisations are using complex and advanced technology stacks to service business needs. As a result, in 2022 and following years, the focus for many technology leaders will not be on revolutionising their use of technology, but evolving it on a smaller level through the use of agile, refining their cloud infrastructure etc. However, these smaller-scale shifts in technology need clear data and insights to succeed, as opposed to the transformational projects where a dramatic change was always going to be justified.
The challenge that comes with this evolutionary approach is that it requires clear data and insights to succeed – while the benefits of big transformational initiatives can be clear, working on continuous improvement requires a culture of measurement and analysis that many organisations still don’t have.
Increasing leverage of simplification to power sustainable growth
Despite rapid adoption of new technologies and services to weather the pandemic, tech investment isn't slowing down as businesses continue to focus on growth now the worst is over. While this is likely to continue in 2022, it can be expected that some organisations may have to take a harder look at optimisation and rationalisation of technology to avoid wasted spend and ensure long-term sustainability.
For now, growth, not cost reduction, is the most important goal.
Investment in technology at this rate is likely to continue in 2022, but organisations will begin to look further into optimisation and rationalisation of technology spend. Technologies like cloud and SaaS have been a lifeline for businesses needing flexibility over the past year. However, they can present a challenge when it comes to tracking costs. Investing in growth needs to be balanced against spending, in the long run, to avoid wasted spend and ensure long-term sustainability. Without effective oversight, organisations can risk wasting money on resources and services which they aren't using which could halt further growth in the future.
Increased focus and accountability on tech sustainability
Awareness of the environmental impact associated with the use of technology means that many IT leaders will need to be able to provide information on these impacts and take steps to mitigate them. This involves both a clear understanding of how technology is being used, and the ability to leverage these insights to make changes to areas such as cloud, power source & consumption, cooling technologies etc.
For example, where the shift to cloud was previously seen as a cost-efficient decision, IT leaders are also beginning to consider their carbon footprint in the decision-making process, and this is something that we expect to see more of in 2022. Cloud instances are often left running for a long period of time when they’re not in use, and this can have a detrimental effect on the environment. Businesses will look to take advantage of flexible technologies like cloud and wind down on these instances when they are not in use with the aim of reducing the cost to the environment
Comments below fromJeremy Ung, VP of Engineering and Product Management
Rationalising technology sprawl and facing a fundamentally altered hiring reality
The year after the onset of the COVID-19 pandemic brought massive investments in technology as the world adapted to supporting fully remote operations. The second year was all about executing on IT plans made in the first year, along with continuing to plan accommodations for the future hybrid/remote workforce.
In the coming year, product and engineering teams will be forced to reckon with two significant outcomes of that shifting: rationalising technology sprawl and a fundamentally altered hiring reality.
On the technical side, we saw the rapid, and highly decentralised adoption of SaaS tools as teams and organisations experimented to find solutions that supported their unique workflow needs in a remote-first environment. Technical teams were asked to integrate those tools quickly. Optimising for speed in this way made sense given the context but it also led to sacrifices in quality. Engineering teams in 2022 will need to identify any unused or underutilised tools from the SaaS shopping spree of 2020/2021, and they will also have to revisit integrations for any tools retained to ensure that they can scale with the company over the long term in accomplishing product roadmap goals and supporting continued scale and growth of workloads without increased operational overhead.
This rapid transformation and need for operational efficiency mean more hiring is needed. However, this comes amidst the largest global labour shortage on record – 4.4M people left their jobs in the U.S. in September alone, according to the latest US Bureau of Labor Statistics report. The need to staff up to support evolving business needs, and other changes driven by the pandemic, is putting pressure on hiring teams who are competing with other companies seeking out the same skills and experience required to address these changes. Experience in cloud platforms will be one of the most in-demand qualifications, where in the past you might have seen an emphasis on deeply technical skills. For example, cloud and container skills have grown, but it’s challenging to find enough candidates who have existing experience in these areas to fill all open roles.
Teams will need to be mindful of shifting priorities for benefits that have come from the Great Resignation and will need to ensure that they attract and retain new talent with flexible, employee-friendly policies that support a hybrid workforce and embrace the new reality of work in 2022 and beyond. While remote work has been the “de facto” method for the last year and a half, employees (even those employees who prefer remote) are starting to feel disconnected from their companies and colleagues. Employers need to find ways to help their employees forge and keep connections. This requires a lot of balance, providing opportunity for more human moments without requiring in-office time. Teams should also think carefully about how to balance asynchronous work so they can find talent from more geographically diverse locations while maintaining the need for real-time collaboration and back and forth interaction.
Comments below from Andrey Mihailenko, VP of Product and Engineering
Scaling Agile could lead to slowdowns
In 2022, beware of slowdowns caused by scaling agile. As businesses continue to grow, the need for innovation and speed remain the same. While agile methodology started in product & engineering teams, it has expanded in popularity to teams across enterprises. The question now becomes whether agile is the right option for every team and what is the proper way to go about it.
While it’s exciting to see those teams embracing agile and whole organisations realising the benefits of quickly adapting to external changes, ironically, scaling agile across a large enterprise can actually lead to more slowdowns. At some point, this huge scale becomes cumbersome, making the payoff difficult to prove.
As the use of agile in the organisation matures, I predict we will begin to see a descaling phase, in which large companies split their agile teams into smaller units that maintain the core benefits and nimbleness that can get lost at scale. Long-term, agile will be a balance between decentralisation and transparency. Individual teams will continue to retain autonomous decision-making capacity, but there will be greater transparency into costs and returns across the organisation.