CFOtech India - Technology news for CFOs & financial decision-makers
Story image
Outdated tech & board ignorance costing businesses
Tue, 13th Feb 2024

New research commissioned globally by enterprise technology provider, IFS, has concluded that businesses may be losing substantial advantages due to outdated technology coupled with a lack of understanding at Board-level about the potential of modern software. The study, carried out by IDC, IFS, and Boomi, reveals that many enterprises could be unintentionally restricting themselves from realising the benefits of enhanced software which can unlock valuable data.

Engaging with more than 1000 business leaders across various industries including manufacturing, energy and utilities, construction and engineering, aerospace and defense, and telecommunications to offer key insights into their organisations' technology landscape. The research discovered that while many believe they have successfully navigated the disruptions of the past three years, challenges persist. Top complications included working capital and inventory imbalances (56%), volatile demand (53%), and unpredictable supply chains (48%), areas that many businesses highlighted as their primary focus.

Business leaders identified legacy applications (60%), lack of integration (48%), and inflexible applications (43%) as key barriers to their efforts and the efficiency of risk mitigation, suggesting a potential cost due to this ineffectiveness. The evidence points to detrimental effects caused by outmoded technology platforms such as the negative impact of departmental silos (18%) and an ongoing lack of data visibility (24%). This suggests that companies face limitations regarding the use of their data in long-term planning, which may result in business agility issues and difficulties when responding to any future disruptions.

While more than two-fifths (41%) of organisations are without a composable strategy, businesses run the risk of stagnation and accumulating technical debt. Despite the value of a composable architecture being recognised by over 70% of respondents, only 19% of Board members understand the value that it creates, pointing to a pressing need for education and clear business cases that demonstrate short, medium and long-term value.

The research indicates that areas such as supply chain (51%), procurement (47%) and customer service and support (40%) could gain significantly from composability, in addition to customer experience enhancement (36%) and adapting to new business opportunities (51%). Insightful data derived from the research emphasises to executives that composability is fundamental to remaining competitive, increasing productivity, and building agility across their entire enterprise.

“Composability enhances agility and enables better mid and long-term planning", enthuses Alex Rumble, SVP Product Marketing and Corporate Communications at IFS. He added, "Functional and operational leaders recognise the transformational impact of composability and now need to ensure board-level education in the dependency between composability and AI".

The challenges for organisations currently is to actualise value permeation throughout their business. Among the substantial barriers include the lack of executive and Board understanding (54.5%) of the value of composability, and a failure to make sufficient progress in their cloud journeys (50%). It's not surprising then, that the CIO and CTO are the prime champions for composability.