10 of the biggest Business Technology risks facing CIOs and CFOs today

Businesses today face unprecedented challenges and opportunities in the digital era. Technology is transforming every aspect of business, from operations and processes to products and services. However, technology also brings new risks and threats that can jeopardize the success and survival of businesses.?

CIOs and CFOs are responsible for managing the technology investments and strategies of their organizations. They need to balance the benefits and costs of technology, as well as the opportunities and risks. As technology continues to evolve, the role of the CIO and CFO has become increasingly complex. In addition to overseeing the financial and technological operations of a business, they are also responsible for identifying and mitigating potential risks.??

In this article, we examine 10 of the biggest business technology risks that CIOs and CFOs should be aware of and prepared for.? And we call out an answer to address that risk.?These trends include:?

1. Rising Costs of IT

IT spending is expected to grow due to an increased demand for digital transformation, cloud services, cybersecurity, remote work, artificial intelligence, and data analytics. However, this often means that IT costs are rising faster than revenues for many businesses.??? As such, CIOs and CFOs need to optimize their IT spending and ensure that they get the best value and return on their technology investments. They need to adopt a strategic approach to IT budgeting, planning, and governance. They also need to leverage technologies such as automation, artificial intelligence (AI), machine learning (ML), and cloud computing in an affordable way, to reduce IT costs and improve efficiency.?

2. Opportunity Cost of Lost Business

IT downtime can have a significant impact on business performance and customer satisfaction. According to a 2022 report by Uptime Institute, the average cost of IT downtime per hour for businesses worldwide is $300,000. This number can vary depending on the industry, the size of the business, and the severity of the outage. For example, a small business may experience a cost of $10,000 per hour of downtime, while a large enterprise may experience a cost of $1 million per hour.? This includes direct costs such as lost revenue, productivity, and recovery expenses, as well as indirect costs such as reputation damage, customer churn, and regulatory fines.?

CIOs and CFOs need to ensure that their IT systems are reliable, resilient, and secure. They need to implement proactive measures to prevent, detect, and resolve IT issues before they affect business operations. They also need to invest in backup, disaster recovery, and business continuity solutions to minimize the impact of IT downtime.?

3. Lack of affordable skilled Artificial Intelligence and Machine Learning staff

Artificial intelligence and machine learning offer significant benefits to businesses, such as increased efficiency, the creation of new streams of business value, market decision insight, and improved decision-making. ChatGPT, a version of AI, has taken the business world by storm but businesses lack expertise in this technology, in order to leverage its significant benefits. AI technologies require skilled staff to implement them, so that biases, data security, and ethical concerns are not a risk to the business.?

4. Brain Drain as IT Staff Exit Businesses

The demand for IT skills is expected to grow as technology becomes more pervasive and complex in every industry.? One of the main reasons for the IT talent shortage and turnover is the brain drain phenomenon. Brain drain refers to the migration of skilled and talented workers from one country, region, organization, or industry, to another. Brain drain can be caused by various factors such as office politics, economic instability, lack of career opportunities, or better pay, benefits, and working conditions elsewhere.?

Brain drain can have a negative impact on businesses that lose their IT staff. Businesses may face increased costs of hiring and training new staff, reduced productivity and quality of service, loss of institutional knowledge and expertise, decreased innovation and competitiveness, and lower customer satisfaction and loyalty.?

CIOs and CFOs need to address the brain drain challenge by implementing strategies to attract, retain, and develop their IT staff. They need to offer competitive compensation and benefits packages, provide career growth and learning opportunities, create a positive work culture and environment, recognize and reward performance and achievements, and foster employee engagement and loyalty.?

5. Rising Cost of Outsourced Contract Providers

Outsourcing is a common practice among businesses that want to reduce their costs and focus on their core competencies. Outsourcing involves contracting out certain business functions or processes to external providers who can perform them more efficiently or effectively. Outsourcing can help businesses access specialized skills and expertise, improve the quality and speed of service delivery, increase flexibility and scalability of operations, and mitigate risks.?

However, outsourcing also has some drawbacks such as loss of control over quality and standards, communication and coordination issues, and legal and regulatory challenges. Moreover, outsourcing costs may also increase over time due to factors such as rising cost of living, inflation, currency fluctuations, and demand and supply dynamics in the outsourcing market.?

CIOs and CFOs need to evaluate the benefits and costs of outsourcing their business functions or processes to external providers. They need to select the right outsourcing partner who can meet their quality, security, and compliance standards. They also need to negotiate the best terms and conditions for their outsourcing contracts and monitor their outsourcing performance and outcomes.?

6. Cybersecurity Threats and Breaches

Cybersecurity is one of the top priorities and challenges for CIOs and CFOs in the digital era. Covid exacerbated this threat with many businesses rushing to digitally transform at breakneck speed, but not considering Cyber protection.? Cyberattacks are becoming more frequent, sophisticated, and damaging, targeting businesses of all sizes and sectors. The global average cost of a data breach in 2022 was $4.35 million, according to the 2022 Cost of a Data Breach Report by IBM and the Ponemon Institute. This is an increase of 2.6% from the previous year.?

Cybersecurity threats and breaches can have severe consequences for businesses such as financial losses, reputational damage, legal liabilities, regulatory penalties, operational disruptions, customer dissatisfaction, and competitive disadvantage. Cybersecurity threats and breaches can also compromise the confidentiality, integrity, and availability of business data and systems, which are essential for business performance and decision-making.?

CIOs and CFOs need to implement a comprehensive and proactive cybersecurity strategy that covers people, processes, and technology. They need to invest in cybersecurity tools and solutions that can prevent, detect, and respond to cyberattacks. They also need to educate and train their employees on cybersecurity best practices and policies. They also need to collaborate with other stakeholders such as customers, suppliers, regulators, and law enforcement agencies to enhance their cybersecurity resilience.?

7. Digital Transformation Failure

Digital transformation is the process of using digital technologies to create new or modify existing business processes, products, or services to meet changing customer expectations and business requirements. Digital transformation can help businesses improve their efficiency, effectiveness, innovation, competitiveness, and profitability.?

However, digital transformation is not easy or straightforward. According to a report by McKinsey, only 16% of respondents said that their business's digital transformations have successfully improved performance and also equipped them to sustain changes in the long term. The report also found that 45% of respondents said that less than half of their business's digital transformation initiatives met their initial targets.?

Digital transformation failure can result from various factors such as lack of clear vision and strategy, misalignment of stakeholders, insufficient resources, inadequate change management, poor execution, and lack of measurement.?

To successfully digitally transform, CIOs and CFOs need to drive their business's digital transformation initiatives.? They need to do so with a clear vision and strategy; a strong business case; a cross-functional team; a customer-centric approach; a culture of innovation and agility; a robust governance and risk management framework; and a continuous improvement and learning mindset.?

8. Data Explosion and Complexity

Data is the lifeblood of modern businesses. Data can help businesses gain insights into their customers, markets, competitors, operations, performance, and trends. Data can also help businesses make better decisions, optimize processes, enhance products and services, create value propositions, and generate new revenue streams.?

However, data is also growing exponentially in volume, variety, velocity, and veracity. According to IDC, the global data sphere will grow from 64.2 zettabytes (ZB) in 2020 to 180 ZB in 2025. This data explosion poses significant challenges for CIOs and CFOs such as data storage, management, integration, quality, security, privacy, analysis, and governance.?

CIOs and CFOs need to adopt a data-driven culture and strategy that can harness the power of data for business advantage. They need to invest in data infrastructure and platforms that can store, process, and analyze large and complex datasets. They also need to leverage data technologies and tools such as cloud computing, big data analytics, AI, ML, NLP, and OCR that can extract value and insights from data. And finally, they need to implement data policies and standards that can ensure data quality, security, and privacy.?

9. Regulatory Compliance and Ethical Dilemmas

Technology is evolving faster than the laws and regulations that govern it. Businesses need to comply with various rules and standards that apply to their industry, location, and operations. These rules and standards may cover areas such as data protection, cybersecurity, consumer rights, antitrust, taxation, environmental protection, and social responsibility.?

However, compliance can be challenging and costly for businesses due to the complexity, diversity, and dynamism of the regulatory landscape. Businesses may face difficulties in understanding, interpreting, and implementing the relevant regulations. Businesses may also face conflicts or inconsistencies between different regulations or jurisdictions. Businesses may also face penalties or sanctions for non-compliance or violations.?

CIOs and CFOs need to adopt a proactive and holistic approach to regulatory compliance. They need to; stay updated on the current and emerging regulations that affect their business; assess the impact and implications of the regulations on their business processes, systems, and data; implement appropriate controls and measures to ensure compliance; and monitor and report their compliance status and performance.?

In addition to regulatory compliance, businesses also need to consider the ethical implications of their technology use and decisions. Technology can pose ethical dilemmas for businesses such as privacy invasion, bias and discrimination, social manipulation, human displacement, environmental harm, and moral responsibility. Businesses need to balance their economic interests with their ethical values and principles.?

To ensure that ethical considerations are at the forefront of technology development and use, CIOs and CFOs should also implement ethical frameworks and guidelines. These should be tailored to their organization's specific needs and must be reviewed and evaluated regularly to ensure that they remain relevant and effective.?

10. Talent Shortage and Skills Gap

Technology is creating new opportunities and demands for talent in the digital economy. Businesses need talent that can design, develop, deploy, manage, and use technology effectively. Businesses also need talent that can combine technical skills with business skills such as creativity, problem-solving, communication, collaboration, and leadership.?

However, talent is scarce and hard to find in the digital era. According to a report by Korn Ferry, there could be a global shortage of 85 million skilled workers by 2030, resulting in $8.5 trillion in unrealized annual revenue. The report also found that technology is one of the sectors that will face the most severe talent crunch.?

Talent shortages and skills gaps can hamper businesses' ability to innovate, compete, and grow in the digital economy. Talent shortages and skills gaps can also increase the costs and risks of hiring and retaining talent.?

CIOs and CFOs need to adopt a strategic and sustainable approach to talent management. They need to identify and anticipate their current and future talent needs and gaps. They need to attract and recruit talent from diverse and untapped sources. They need to retain and engage talent by offering competitive compensation and benefits, career growth and learning opportunities, and positive work culture and environment. They also need to develop and upskill talent by providing training, coaching, mentoring, and feedback.?

Thankfully CIOs and CFOs have an answer to all these challenges in one platform – an Automation as a Service Platform.?

Automation as a Service Platform (AaaSP).??

Automation as a Service Platform is a technology that uses software robots or digital workers and digital technologies such as AI, ML, NLP, CV, and OCR to automate tasks that humans usually perform on computers. RPA can help businesses improve efficiency, accuracy, compliance, and customer satisfaction while reducing costs and errors.?

Implementing automation can be challenging for some businesses, especially those that lack the technical expertise, infrastructure, or budget to deploy and maintain their own automation solutions. That's where Automation as a Service Platform (AaaSP) can help.?

AaaS is a cloud-based model that allows businesses to outsource their automation needs to a service provider who handles the installation, configuration, management, and maintenance. AaaS offers a pay-as-you-go pricing model that eliminates the upfront costs and licensing fees associated with traditional on-premise automation solutions.?

AaaS can also enable businesses to access advanced capabilities such as AI, ML, NLP, or OCR that can enhance their automation outcomes.? AaaS can also improve collaboration and coordination across the organization and with external stakeholders by allowing them to share and integrate their automation workflows with other applications or systems.???

In addition, AaaS platforms come with deep learning AI models, meaning businesses can better understand business opportunities, and fix, business issues highlighted by built-in as standard. Businesses no longer need to pay for expensive, scare AI data scientists when this digital capability comes with an AaaS Platform.?

AaaS can also solve many other challenges such as data privacy, vendor dependency, and integration issues. All at a fraction of the cost of their current on-premise or outsourced vendor contracts.?

Conclusion?

CIOs and CFOs are facing unprecedented challenges and opportunities in the digital era. They need to manage the technology investments and strategies of their businesses in a complex and dynamic environment. They need to balance the benefits and costs of technology, as well as the opportunities and risks.?

CIOs and CFOs need to address these challenges with effective solutions that can help them optimize their technology performance and outcomes. They also need to leverage these challenges as catalysts for innovation and transformation that can help them create value and a competitive advantage for their organizations.?

However, by adopting an AaaS platform, businesses can adapt, evolve, and thrive. This technology can help reduce costs, increase efficiency, reduce the risk of brain-drain from exiting IT staff, and improve productivity. While there are still significant challenges and risks facing CIOs and CFOs today, businesses can immediately benefit from AaaS and extract significant cost savings, and business value from their investments in intelligent automation.?