Building a strong competitive position for the future
The technology industry has not just weathered the pandemic-driven disruptions of the past few years; it has flourished. The crisis thrust many organisations into the future, accelerating digital transformation and changing work models dramatically. But in 2023, the tech industry will likely continue to grapple with issues around supply chains, workforce and innovation—now exacerbated by considerable macroeconomic and global uncertainties.
While tech stocks outperformed during the pandemic pressures of 2020–21, the sector led considerable stock market declines in 2022. A major challenge now for tech companies is how to weather a potential economic slowdown by trimming costs, increasing efficiency and growing revenues. At the same time, many are likely looking for ways to remain innovative and build a strong competitive position for the future.
Some of the specific themes we see playing a critical role in 2023 and beyond include:
- Leading through macroeconomic uncertainty. Beleaguered by softening consumer spending, lower product demand and falling market capitalisations, tech companies’ C-suites are feeling the urgency to increase margins and grow revenues. Beyond workforce adjustments, approaches may include making business processes more efficient, relying more heavily on intelligent automation, modernising legacy architectures and considering strategic mergers and acquisitions (M&A).
- Navigating global uncertainties. As technology companies confront heightened global challenges they should work to mitigate risks and build more resilient systems. Leaders should think strategically about their choices of partners, where they’re located and where and how production takes place.
- Transforming other industries through technology. On a hunt for new revenue opportunities, the tech sector is extending its reach into other industries, using digital advancements to support innovation and transformation. Tech companies are also seeking to improve efficiency and spur innovation in other areas that are ripe for transformation, including real estate, manufacturing and retail.
- Adapting to new regulations. Climate change and social impacts are having an increasing effect on the operations of tech companies. At the same time, governments and shareholders around the world are pushing companies to increase transparency around environmental footprints and tax payments. New and proposed regulations are expected to require updates to business management software tools, enabling companies to achieve real-time visibility and to grant authorities access to data.
Download the full report to learn more about the impacts of technology industry trends, key actions to take and critical questions to ask.