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IT & Technology: State of the Market Review December 2016

30 Dec 17:00 by
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Whilst Brexit and the US elections dominated the political news in 2016, the technology sector was dominated by the re-emergence of VR and AR and the increasing disruption caused by the growing adoption of agile and devops methodologies.

Longstanding traditional models of structuring Technology and IT departments, managing workflows and running projects were conspicuously deconstructed in 2016 as the agile movement established itself as the best practice modus operandum.  Additionally Devops methodologies became widely recognised as mainstream practices during 2016.  Multiple knock-on effects emerged as a result, including a significant change in attitudes to recruitment and compensation.  Forward thinking companies engaged in these latest methodologies learnt that they must attract and retain “superstars” who have the right combination of skillsets and experience to carry out key roles.  Consequently, employers started to review and raise compensation packages in order to secure vital talent.

As companies empowered their carefully selected new hires to drive the adoption of new methodologies and implement other new initiatives, they are increasingly leaving their old guard simply to maintain legacy systems.  This is creating a divided technology employee population where, on the one hand, there is a growing but still finite pool of well-paid agile superstars who are continuously developing and finessing their working knowledge of new technologies and methodologies.  These professionals enhance their value with every role they complete successfully.  On the other hand, there is a sizeable generation of experienced technology practitioners who are being left holding the baby, not gaining the opportunity to skill up and as a result seeing their earnings potential and professional development being restricted.  

As in other functions and sectors, the challenge of attracting and retaining the brightest stars, in particular those of Generation Snowflake has not evaded the technology function.  The most talented professionals have become serial job hoppers, changing employers and roles circa every two years.  In some respects, this should not be a surprise due to the furious pace of change within technology.  However, there is still an expectation that an employee will stay between 3 – 4 years before looking to move up or on.  Typically, most young professionals fall into one of two camps.  They are either ambitious or the polar opposite, earning only to enjoy experiences.  The ambitious crew will seek to move up the career ladder, diversify their skills and experience and enhance their earnings within two years.  The experience seeker will prefer to take time out to experience life and travel between roles.  This later collective will  also be more motivated by work/life balance than monetary reward. The significant disparity between reasons for changing jobs exemplifies the challenges of managing and motivating Generation Snowflake.

Divided work practices and challenging talent pools are not the only challenge facing IT leaders.  More often than not, the shiny new systems and software developed at pace by new generation superstars are not always rooted properly in or fully supported by existing infrastructure.  Therefore at some point, it is inevitable that there will be problems unless the infrastructure is also upgraded.

On a positive front the traditional corporate inertia to change is being shaken up and forced to accept that transformation is essential to survive.  This is a refreshing change for many IT leaders.  To a certain extent, the large number of contractors that are being utilised in agile practices is expediting this change of mindset.

However it is fair to say that many technology departments still fail to understand or interest themselves enough in the commercial impact of their activity or that of the wider business.  Currently it is probably only the most enlightened US companies who have got the concept of collaboration between their technology departments and other functions such as Marketing, Sales and Finance.  It is becoming increasingly important for technology leaders to instil commercial awareness in their teams and facilitate inter-departmental collaboration.  

Near-shoring has been an successful initiative and led to a depletion of the appetite to offshore long distance during 2016.  Near-shoring in Eastern Europe has proved to offer the benefits of being easier to manage, return greater control to the corporate, is closer to home and has an abundance of highly skilled, hard-working, low cost workers.

The re-emergence of Virtual Reality (VR) and Augmented Reality (AR) was another key trend in 2016.  The question yet to be answered is will it last or fade?  The cost of hardware is its greatest threat.  However, as virtual and augmented reality increasingly change global behaviours and create new past times (who would have thought we would be looking for Pokémon and talking to strangers on the streets of London), the huge potential for VR and AR is just beginning to emerge.  It seems impossible to conceive of a world without these tools.  In fact as technology continues to advance unabatedly, they are more likely to be mainstream tools in the near future.

Rapid advancement in technologies and the need to keep up and stay competitive in an impossibly fast changing environment means that technical debt has moved up the chart of problems keeping technology leaders awake at night.  How much debt is manageable, when to repay it and how to repay it are burning questions that must be addressed.

Looking forward to 2017, the digital piece will continue to be a hotbed of activity with business driving transformation.  Equally automation, AI and the internet of things will continue to dominate tech headlines.  With the customer remaining firmly in situ as King, companies will harness the power of big data and leverage data science tools to gain greater customer insight and make more accurate predictions for future behaviours.

The war for talent will continue at pace.  With this in mind, boomerang employees will become more widely accepted and embraced and employer branding will continue to be critical.

As all companies are being forced to be technology companies to varying degrees, there is mutual agreement that great businesses will be led by tech savvy leaders and that technology leaders will play an increasingly important role at the board table.  Moreover, there will be a considerable amount of change at the highest echelons of senior technology leadership and management as a new breed of technology leaders rise to the forefront of the sector.

So goodbye 2016, it’s been eventful.  Hello 2017, we’re looking forward to seeing the advancements you’ll bring and the changes you will initiate.