As a disruptive event, the Covid-19 pandemic has been exceptional in its scale, yet dramatic swings in supply chain demand or market crises occur more frequently than we sometimes believe
When, for instance, a single container ship blocked the Suez Canal in March, oil prices rose, goods were stranded and global supply chains had to readjust. It appeared to be the kind of event that is incredibly rare, but within recent history we have witnessed a series of devastating hurricanes in the US and the 2011 tsunami in Japan. There have been oil spills, floods in Thailand that interrupted manufacturing and the Icelandic volcano eruption that caused the suspension of trans-Atlantic flights. This is aside from the list of financial crashes, from the bursting of the dot-com bubble in 2001 to the global financial crisis of 2008, the European sovereign debt crisis and the Dow Jones flash-crash of 2010.
Currently, as well as the uncertain long-term effect of the Covid pandemic, the global economic system faces the unpredictability of crypto-currencies, the eruption of crowd-sourcing activity in stock markets and continuing political tensions.
While nobody can prepare for every eventuality, most organisations 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, you rely totally on your car for daily travel but fail to service it properly or on time and instead spend your money elsewhere. If the engine will not start or the electrics fail when you desperately need it in bad weather or for an emergency, the price you pay is significant.
Covid is a case in point. It has imposed huge stress on the IT systems of most organisations. Besides having to facilitate working from home, systems have had to adapt as whole sectors suspended or reconfigured manufacturing and shipping globally. Banking networks rapidly reassessed risk, causing major disruption to the financial supply chain. The sudden growth of remote project management, changes to consumer demand and the exponential expansion of online commerce and contactless transactions all placed new strains on systems and applications.
Those organisations that came through all this in the best shape had learned to test, rebuild and update their IT systems before the pandemic. Their systems did not buckle 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% 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%), followed by IT services (6%). 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 digitisation it drives. A survey of more than 800 IT leaders in March also found that data and business analytics and cloud-based applications are major areas for investment.
The hope is that organisations avoid putting resources into solutions that turn out to be unnecessary or ill-suited, with the primary driver being a short-term fix. Organisations too quick to purchase new technologies to meet an immediate need soon find themselves facing problems ranging from vendor lock-in and lack of interoperability to additional investment for software updates or unexpected service fees.
As with a car, the failure to test and service anything that needs fixing and then update systems makes any company vulnerable in a crisis or bottleneck. Yet almost as damaging is the long-term reluctance by decision-makers to understand systems and applications so they have an accurate picture of what the organisation needs. The result is that companies may very well put their money into technologies that do not match their overall need. And what is in many ways worse, is they could implement a partial solution that generates more headaches for integration and optimisation.
If organisations incentivise their IT teams to communicate with all internal stakeholders and experiment and push the boundaries of systems in place, they will frequently detect bugs and other performance concerns before they develop into a problem. The company will be able to avoid sudden troughs in productivity, failures to fulfil orders or meet customer expectations, with all the accompanying loss of trust and revenue.
This lesson is one that enterprises should act on continually – not just as weather crises, pandemics or market gyrations blow up from nowhere. Any organisation that services and maintains its systems is bound to have the edge on its ill-prepared competitors when such seismic events suddenly erupt.
About the Author
Scott Gnau joined InterSystems in 2019 as Vice President of Data Platforms, overseeing the development, management, and sales of the InterSystems IRIS™ family of data platforms.
Featured image: ©AlphaSpirit
