As the world rightly focuses on the post-Covid realities and reinvigorates its appetite for forward-looking initiatives, it is easy to believe that disruptive events such as a pandemic are extremely rare.
Covid-19 has been exceptional in its scale, shutting down much of the globe’s economic activity. Yet all of us have already lived through market crises and dramatic swings in supply chain demand that have thrown notions of normality out of the window.
It was only in March this year that a single container ship managed to disrupt much of the world’s supply chain simply when it ran aground in the Suez Canal. This immediately inflated oil prices and forced supply chain planners to readjust their operations. For many enterprises, the Suez blockage confirmed beyond any doubt what the pandemic had taught – that they must reorder their supply chains and diversify their suppliers to avoid falling prey to the next big disruption, whatever it may be.
While nobody can prepare for every eventuality, most organizations leave themselves vulnerable to these kinds of events by neglecting to maintain the essential IT infrastructure on which they depend almost entirely. Imagine, for example, how your total reliance on your car for daily travel would be undermined if you failed to service it properly or on time, largely because you want to spend your money elsewhere. When you then desperately need the car in bad weather or for an emergency, the engine will not start, or the electrics fail. Then you pay a very heavy price for having treated your IT like an old banger.
The new strains imposed by Covid
Covid is an excellent case in point. It has imposed huge stress on the IT systems of most organizations. Besides having to facilitate many employees working from home, systems have had to adapt as whole sectors suspended or reconfigured manufacturing and shipping globally. Banking networks rapidly reassessed risk exposure, causing major disruption to the financial supply chain. New strains on systems and applications were inflicted in a short space of time by the sudden growth of remote project management, significant changes to consumer demand and the exponential expansion of online commerce. In the UK, for example, the huge growth in contactless transactions was one of these sudden surges in highly sensitive data and device use that systems had to facilitate.
The wise ones had already tested and updated their systems
The organizations that have managed best, learned to test, rebuild and update their IT systems before the pandemic. Their systems did not collapse under the pressure and unlike their ill-prepared competitors, they did not panic and invest in expensive new applications, frequently overpaying for a tool that only solved half the problem.
While it is extremely encouraging that global research and advisory company Gartner predicts a 6.2 percent increase in overall IT spending across 2021, it would be reassuring to think these were very considered purchases and investments. The fastest-growing area within the Gartner prediction is in enterprise software (8.8 percent), followed by IT services (6 percent). Gartner, however, ascribes much of this growth in software purchasing to coping with the new ways of working in the pandemic and the acceleration of digitization it drives. A survey of more than 800 IT leaders in March also found that spending on data and business analytics and cloud-based applications are prominent areas for investment.
The consequences of a quick-fix response
The hope is that organizations avoid putting resources into solutions that turn out to be unnecessary or ill-suited, with the primary driver being a short-term fix. Where companies are too quick to purchase new technologies to meet their most immediate need, they soon find themselves facing a host of problems. The range of unpleasant experiences covers everything from vendor lock-in and lack of interoperability, to additional investment for software updates or unexpected service fees.
Like a car looking to get out on the road again, the failure to test and service anything that needs fixing, and then to update systems makes any company vulnerable in a crisis or bottleneck. Yet almost as pernicious is the long-term reluctance by decision-makers to understand systems and applications so they have an accurate picture of what the organization needs. The result, sad to say, is that companies may be investing in technologies that don’t suit their overall need. They could easily compound the error by creating a partial solution that ultimately generates more headaches for integration and optimization.
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Incentivize IT to take the initiative
If an IT team is incentivized to communicate with stakeholders throughout the organization and experiment and push the boundaries of systems in place, they will often identify bugs and other performance concerns before they become a problem. The company will avoid sudden dips in productivity, the failure to fulfill orders or to meet customer expectations. They can avoid the inevitable and damaging consequences of loss of trust and hits to the bottom line.
In case anyone thinks this approach is an exaggerated response, just consider how common so-called black swan events are. A quick search will reveal that within living memory the developed world has been hit by a series of major disruptions such as the sequence of hurricanes in the some of which inflicted an estimated $125 billion in damage. In 2011, Japan suffered an earthquake, tsunami and nuclear power station meltdown. The list includes oil spills, major floods in Thailand that interrupted manufacturing and the Icelandic volcano eruption that caused the suspension of 95,000 trans-Atlantic flights. This is aside from financial crashes, the dot-com bubble bursting in 2001, the global financial crisis of 2008, the European sovereign debt furor and the Dow Jones flash-crash in 2010. The length of this list makes the point.
Currently, as well as the uncertain long-term effects of the Covid pandemic, the global economic system continues to face the dangers of major cyberattacks, the unpredictability of crypto-currencies and the eruption of crowd-sourcing activity in stock markets.
The lesson of test, rebuild and update applies at any time – not just in the approach to crises and market gyrations. Organizations that actively maintain their systems, will always be at a significant advantage and far better prepared for surges, spikes, crashes, weather events and political disruptions that inflict real damage on their underprepared competitors.
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Scott Gnau, VP of Data Platforms, InterSystems