The backbone of business before
If you were to ask a sampling of executives from, say, 20 years ago, what do you think they would say the “backbone” of their business was?
Actually, before we answer that question, let’s clarify what we mean by backbone. As the metaphor suggests, we mean the thing that holds everything else up. What is the thing that is so essential that you take it for granted? The thing that, when everything is running perfectly, you don’t notice it, but when it’s broken, it causes excruciating pain?
So, what do you think those hypothetical executives from 20 years in the past would say is the backbone of their business? You’re not going to get a single answer. Some will say faithful employees, while others will say thoughtful managers, or perhaps you’ll get the boilerplate answer of loyal customers. Certainly they’d all come up with an answer as to what the backbone of their particular business is, but could they agree on what the backbone of business is? Probably not. But now? Well, now there’s simply no question.
The backbone of business now
As we collectively move forward toward a fully technologically mediated business environment, there’s going to be only one answer for every business: Information Technology.
We’re already close to this reality. Think about it. Right now, you’re probably taking IT for granted, since it’s running smoothly as you read this article. Or if it’s not running smoothing, you’re probably experiencing the acute headache of IT issues.
Chances are, if information technology isn’t already the backbone of your business, it will be. Or at least, it should be. That’s according to an IDC Canada study, conducted in partnership with TELUS.
“Your network and mobile infrastructure is the invisible backbone that supports most of your workers today,” the study’s authors write. “From advertising agencies to construction sites, and factories to retail locations, employees cannot function without IT powering their next action. When that slows down? So does your business.”
This claim shouldn’t be controversial, yet a significant percentage of Canadian businesses are lagging behind. The study took the responses of the business sampling and grouped each company into one of four categories: Skeptics, Beginners, Implementers, and Leaders. 45% of respondents are either skeptical of technological solutions or just beginning to use technology to compete, while 55% are well on their way or leading the pack with large investments in technological solutions. That is to say, about half are investing significant resources into their backbone. While the other half, not so much.
The 5G transformation
If you want to compete and grow, IT is no longer optional, it’s indispensable, especially as 5G enters the market.
You’ve probably heard a lot about this in the news. Technology is continuing its exponential growth, and the dawn of the fifth generation of mobile internet connectivity is on the horizon. It’s expected to bring game-changing disruption by vastly increasing both the speed of connectivity and the number of devices able to be supported on the network at one time, all while reducing latency. As the study writes:
“If you will be able to download a high-resolution movie in two seconds, what could your business do with that capability? Ubiquitous IoT devices in concert with 5G networks are primed to change the world. Has your business planned its strategic evolution to gain the greatest advantage possible when these new networks launch?“
The new 5G future will enable a whole host of other technologies, increasing the ubiquity of the Internet of Things (IoT), Software Defined Wide-Area Networks (SD-WAN), Artificial Intelligence (AI), Augmented and Virtual Reality (AR/VR), just to name a few. It’s a world of autonomous vehicles, big data optimization, and machine learning, and businesses will need to adopt and adapt to keep pace.
Companies who make the greatest investments in innovation see greater gains, and are thus able to make bigger investments. If one company does it, their competitors have to do it too. In order to compete, other companies need to keep up, but soon the gap may be too great to close for those who aren’t investing now.
You can see from this IDC chart the disparity in investments made in new technology being made by technology leading companies.
It’s important to remember that these are Canadian companies we’re talking about here, but their competitors are not restricted to Canada. We’ve seen with the rise of tech giants like Facebook, Google, and Amazon that competition based on tech is global and, increasingly, becoming a winner-take-all game. As customer tastes evolve with technology, they become trained to interact exclusively with technology as a way to get what they need and want. Knowing your customers, and more importantly, having your customers know you, is already close to being exclusively technologically mediated. There’s a huge risk Skeptical and Beginner companies are taking. Not only could they be left behind, they risk becoming completely irrelevant.
The question of security
Along with all the advances that IT offers comes the big question: How do we maintain security?
There have been some large-scale hacks that have made the headlines. We’ve seen massive data breaches at credit rating institutions, potentially causing identity theft problems for decades to come. At the time of this writing, municipalities in the U.S. are suffering from a scourge of ransomware attacks, affecting the ability for cities like Baltimore and Atlanta to conduct city business.
According to the Ponemon Institute’s annual study on data breaches sponsored by IBM, the cost associated with data breaches continue to rise, with the average cost for a Canadian company now at over $6 million per breach, or about $81US per compromised record.
However, these findings point in only one direction: the importance of IT security. Meaning, if anything, these security issues make IT even more indispensable than ever before. That is, security questions mean IT is even more of a backbone.
Unfortunately, as IDC discovered, many Canadian businesses aren’t prioritizing security enough. For instance, the below chart details the priority given to security for automated processes between the four representative groups.
The IDC authors write:
“As Canada prepares for a rapid rise in physical and knowledge automation solutions, it's surprising to see the low importance many companies are placing on securing these solutions. Canadian businesses need to elevate cybersecurity to a board-level priority.“
So what does making IT security a priority look like? IDC believes this kind of expertise is best outsourced. They recommend businesses hire IT consultants and managed IT partners to ensure that technological safeguards are put in place as well as train staff on best-practices to keep the organization and system secure. For example, ransomware attacks, like those suffered in Baltimore, are usually made possible by a single well-meaning employee opening an attachment in a suspicious email. And it only takes one bad email attachment to bring everything crashing down.
As IDC writes: “Canadian businesses must dedicate adequate resources and time to securing all they do. Their survival depends on it.”
In other words, if you want to succeed, you have to build your business’ backbone and keep it safe.