With 2022 just around the corner, this is the perfect time to reflect on the previous 12 months and consider what could change in the next 12.
We have all endured an era of profound disruption which will undoubtedly continue to impact for years to come, with these experiences shaping how we conduct business in the future. This disruption will inform the trends and forces that will shape activities in the coming year and beyond.
Business resilience will top strategic agendas, which shouldn’t be a surprise: resilience refers to the ability to withstand unpredictable changes and emerge stronger. The world has watched businesses over the last 20 months pivot or adapt their business model remain successful, while there have been just as many who couldn’t and were forced to close.
The COVID-19 pandemic exposed the operational fragility of many organisations and, as recovery gathers pace, these organisations are keen to develop further on resilience initiatives to avoid the worst-case scenario. However, the pandemic wasn’t the only disruptive force on industries in recent years: McKinsey & Company recently noted that cyber incidents have risen 24% since 2013; geopolitical risk has not been higher since 2003, and the frequency of natural disasters, which can impact global supply chains, is on the rise.
With both the EU and UK introducing new regulations governing Digital Operational Resilience in financial services, we can expect businesses from all industries to take note and prioritise building more resilience. Indeed, Gartner puts it at the top of the CIO Agenda for next year. It’s important to keep in mind that developing resilience is a continuous process, and even those organisations who were successful throughout the pandemic will need to keep it as a priority.
Continued Reign of Hybrid for Flexibility
“Hybrid” was a buzzword of sorts from the start of the pandemic and it will not be going away anytime soon. While its most prevalent usage has been to refer to working models, hybrid will reign supreme when it comes to enterprise technology estates.
We know via Gartner that 40% of workloads will be cloud-based by the end of 2021, up from 20% in 2020. Organisations are increasingly becoming more cloud-native in application deployment to ensure more flexibility, whilst maintaining legacy systems.
This also ties into the aforementioned need for resilience: 2021 was a year of many technical glitches and cloud outages. Those organisations that relied solely on public or private cloud strategies are likely to have seen the worst fallout from outages: putting all your eggs in one basket means, if the basket falls, all the eggs will crack.
By using a hybrid approach, companies can use a combination of cloud providers and on-premises infrastructure to ensure their systems continue running even through an outage. This is particularly important for mission-critical services, and hybrid models will continue to rise in popularity to ensure redundancy and backup capabilities. Should we continue to see the same level of outages into 2022, it would be ignorant not to consider how a hybrid approach could benefit.
The Rise of FinOps
As cloud becomes core to business operating models, cloud teams will be challenged to account for their spending and make sure it is well spent. Billions of dollars are wasted each year on improperly provisioned and architected cloud solutions, with the average organisation wasting almost half of its cloud resources. As a result, more organisations will take on board FinOps principles and practices to ensure their cloud spend is well optimised.
FinOps is, at its core, a cultural practice which brings IT teams and the wider business into closer alignment. It’s not only about reducing costs, but about understanding how to spend more efficiently.
Cost has been a focal point throughout cloud adoption, as its flexible, pay as you use model promised huge cost efficiencies for businesses. However, accountability for spend is often lacking – engineers can spend at will when they spin up cloud resources – a risky prospect for the finance department. Fostering a FinOps culture helps finance teams become more comfortable with the variable cost of the cloud and IT teams to take ownership of their spend.
The challenges businesses faced throughout 2020 and 2021 won’t disappear as the clock strikes on 2022. However, they can be addressed with the right support and preparation. Resilience, flexibility, and improving understanding of costs will be key to this.
We have all experienced an enormous amount over the past year, from disruption and cloud outages to unexpected cloud spending. In 2022, organisations must apply their learnings to their strategies to ensure they can handle anything the new year brings.
By Linda King, Chief Go-to-Market Officer at Cloudsoft.