Increased volatility rising out of the evolving COVID-19 pandemic has led to a reshuffling of priorities for the global technology industry.
Qualified people are the greatest asset and challenge
The annual EY report, Top 10 opportunities for technology companies in 2022, noted that the COVID-19 pandemic has increased the urgency to address already pressing issues around talent strategy in a hybrid working world.
Tech companies are exploring how best to introduce a staged return to the office, with 9 out of 10 employees indicating that they are prepared to resign if they are not offered flexibility in where and when they work. Demand for engineers and salespeople is growing exponentially for those investing in growth.
EY Global TMT Strategy and Transactions Leader, Barak Ravid is challenging tech employers to re-examine the entire value-proposition for talent.
“To build a motivated workforce, employers must prioritize finding ways to solve the puzzle of optimizing rewards, flexibility and experience, to create a package that cultivates the best talent while managing the associated costs,” he elaborated.
Growth via M&A
Second in importance is mergers and acquisitions (M&A). With 51% of technology executives stating that organic growth could be a challenge in the near term, M&A will be key to sustaining growth for many. The report indicates that despite increased regulatory scrutiny and financial uncertainty, the deal market will remain healthy.
Ravid opined those acquisitions across the industry will reignite growth by adding solutions, technologies, end markets and distribution channels to a companies’ portfolios.
“Divestments could also help companies steer away from slower growth market segments or solutions that require the business to build new capabilities. Overall, having the right M&A strategy in place will be critical to realizing a better growth profile,” he continued.
Existential challenges in supply chain
COVID-19 exposed vulnerabilities in the supply chain. For the tech industry, two major bottlenecks have been around logistics and the availability of components. The report ranked third the need to de-risk the supply chain to secure business continuity.
Ravid opined that tech companies need to holistically review their entire supply chain. Different risk profiles in the chain require different policies around inventories and sourcing contracts.
“Logistics issues could lead to changes in preferred manufacturing and distribution footprints. Real-time visibility will help mitigate problems at an early stage, while new technologies such as digital twins and 3D printing could reduce the degree of disruption,” he added.
Beyond environmental sustainability
The call to take a strong position on environmental, social and governance (ESG) issues debuts at fifth position on the ranking, with stakeholders now demanding more from tech companies.
Employees want to make a tangible difference; investors are seeking sustainable investment options, and customers are looking to the industry to implement new tech that drives sustainable outcomes.
EY says companies must respond by taking the initiative to draw up a long-term value proposition and adopt transparent KPI-led reporting.
The top ten opportunities in technology for 2022 are:
- Attract and retain a motivated workforce in a hybrid working environment
- Leverage M&A to strengthen growth profile
- De-risk the supply chain to secure business continuity
- Embed security into the design of new activities
- Lead by example in ESG to strengthen stakeholder relations
- Transform business to excel in consumption-based sales
- Realign tax organization with digital business models
- Streamline operations to increase agility
- Instill customer trust to drive digital engagement
- Prepare for the adoption of 5G