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Adaptation: Key to Transformation in 2024
In a 2011 Harvard Business Review article, business adaptability was described as "the ability to read and act on signals." To do this requires staying attuned through constant learning, data analysis, market research, and open internal communication. Without accurate and current insights, pivots by leadership toward adaptability risk missing the mark.
Other qualities of adaptability include being able to:
Quickly and efficiently change strategy, operations, resources, and structure in response to new conditions or opportunities. This type of agility stems from adaptable processes and systems, along with decentralized decision making and a workforce able to innovate.
Weather difficult periods of transition by being resilient. Also important are financial stability, resource reserves, and a workforce culture of not compromising on quality.
Adaptation is important in 2024 as economic signals indicate high potential for unpredictability and recession, marking the fifth year in which organizations have been buffeted by uncertainty.
IDC's most recent economic and technology spending outlook shows more mixed signals than last year. In fact, only 29% of respondents to a worldwide survey by IDC believe the GDP in their countries will be lower, while 46% believe GDP will be higher than expected (IDC's Future Enterprise Resiliency & Spending Survey, Wave 8, September 2023, n=888). Last year's surveys were more pessimistic but consistent when compared to this year's outlook variation.
Given the range in outlooks, the ability to successfully adapt is likely to become a primary value to enterprises in 2024.
Cracks are reappearing in efforts to improve business processes
As IT budgets tighten, investments are more heavily scrutinized. Efforts to improve business processes increasingly require business cases with accompanying financial and KPI improvement estimates. Teams are struggling to supply these metrics both during planning and once an improvement is implemented. Perceptions of high costs and difficulties with life-cycle management depress the appetite for improving business processes, even as these processes are required to operate efficiently and enable adaptability.
Process mining teams become more important as tech investments are scrutinized
Process mining teams operate cross-functionally, with regular involvement by business analysts, financial analysts, IT specialists, and business subject-matter experts to both work on process mining projects and prepare requirements and business cases for improvements, according to IDC's Worldwide Automation & Process Improvement Survey (March 2023) on the use of process mining in enterprises.
As different technology-enablement projects are proposed, project sponsors are looking for how these investments deliver tangible value to the organizations – in particular, value to business operations and impact on customers. Process mining teams are generally the only function in an organization with expertise in tying technology investments to metrics and financial performance. At IDC, we expect this role to begin operating more broadly across enterprises as leadership in both business and IT recognize the need for this type of analysis and increasingly demand it.
In essence, process mining teams will adapt over the next few years to work more broadly in support of technology-enabled value creation.
Increased percent of process improvement budgets in 2024 will go to investments in Generative AI
In August 2023, an IDC global survey looking at interest and adoption of generative AI (GenAI) showed widespread interest, with 21% of decision makers significantly investing in GenAI and only 19% of respondents not doing anything in this technology (IDC's GenAI ARC Survey, n=1,363). This level of interest and investment in just one year is unprecedented.
The survey also indicated that respondents active in either planning, proofs of concept, or implementations are diverting portions of their IT budget to GenAI. In some cases, they are planning to add more funding to their IT budget to aggressively spend on this technology to innovate and gain competitive advantage.
As budgets tighten, the shift to continuous improvement is more important
Given the anticipated flat to-modest growth in IT budgets in 2024, as well as the spending competition from GenAI, not all task mining projects will be funded – even when tangible and high-value improvements are detailed.
However, according to IDC's process mining survey, 78% of organizations regularly run reports for process teams to identify problems, and 63% continuously monitor and send out notifications about problems that are assigned to subject matter experts to fix. This represents an opportunity for process mining teams and their sponsors to improve processes tactically without requiring technology investments.
It also provides a mechanism for process mining teams to propose smaller, less-costly improvements when they see repetitive problems occur from the monitoring and reporting. Focusing on incremental, continuous improvement lowers the risk associated with large improvement projects and represents another form of adaptability that benefits the organization.
Editor's note: This article is a special collaboration between Celonis and IDC.
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