Challenges Facing IT Businesses

 In Business, Business Advice, Financing, Investment

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The IT industry is one of the largest sectors in the world, benefiting from continual demand and investment from across the globe. In such a market, it would be natural to assume that IT businesses are flourishing and embracing the opportunities before them. However, while such companies are undoubtedly performing well, there are numerous challenges that the sector is currently facing.

If you run an IT business, or have thought about doing so in the future, then understanding these niche challenges – and their potential solutions – is of paramount importance. Here’s what you need to know.

The security threat posed by AI

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IT businesses have always had to handle security issues of varying sorts, but there is a potentially concerning harbinger on the horizon: the security threats that could be posed by artificial intelligence (AI). One of the biggest concerns with AI and security is that the issue is somewhat overplayed; people have been warning about the dangers of AI almost since its inception, giving birth to a sense of fatigue related to the subject.

However, AI security threats are real, particularly in regards to how AI can make hacking more sophisticated. As a result, IT businesses will need to focus heavily on safeguarding against AI issues as well as maintaining vigilance for non-AI security threats in order to provide a comprehensive service to their clients.

Industry reputation

While most people understand that IT, and IT businesses, are a crucial part of modern life, it’s fair to say that trust in technology has taken a few hits in recent years. A number of high-profile data breaches have taken their toll on the trust people have in IT, which combines with an underlying belief amongst the general public that technology has caused more harm than good – even though this is demonstrably not the case. As a result, IT has something of an image problem, which can be a concern for IT businesses.

The only way to overcome this issue is to seek to build trust by focusing on providing core services, and prioritizing security, at all times. In particular, IT businesses need to work on building strong relationships based on trust with their clients and continuing to improve their processes in order to reinforce that trust.

The IT skills gap

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The first generation of pioneering IT professionals is now on the brink of retirement, which has led to a widespread concern over the future of highly-skilled professionals. Over recent years, discussions of an IT skills gap have continued apace, as the “baby boomers” retire – and take their years of hard-won knowledge and expertise with them. Worse still, the financial crisis of 2007/8 led to a reduction in the number of entry-level IT professionals being hired, which has led to a gap: as there were fewer entry-level IT professionals a decade ago, there are fewer individuals who have had the opportunity to build the skill and expertise required to replace the retiring baby boomers.

There are a variety of different ideas IT businesses can utilize when seeking to close the skills gap in their own organization but, ultimately, the issue will have to be addressed on a national level to truly be rectified. However, until there are national initiatives encouraging young people to consider IT as a career, the future is somewhat unsure, leading to extra pressures for IT organizations.

Application management

Modern IT businesses will have a high number of different applications available to them, but a vast number of these applications will go unused for long periods – and in some cases, cease to be used at all. Despite their lack of use, these applications will continue to place expensive maintenance demands on the company, potentially to the point where IT costs spiral and overspends begin to take their toll.

To combat this issue, IT businesses are encouraged to turn to application portfolio rationalization to spearhead a move towards complete application portfolio optimization (APO). APO allows firms to reduce costs significantly and increase productivity across the business as a whole.

The continued stress of GDPR

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Last May, the European Union’s General Data Protection Regulation (GDPR) came into law. The legislation – which is designed to protect user data – is sweeping and widespread, impacting companies across the globe. Despite a two-year implementation period prior to GDPR becoming law, many IT businesses still continue to struggle with the regulation.

In truth, the only way to handle GDPR is to accept it absolutely, appointing dedicated data protection officers if necessary. The punishments for failing to comply with GDPR are simply too severe – up to 4% of annual turnover – to take any risks regarding this landmark legislation.

Outsourcing concerns

Outsourcing is more common now than at any other point in the history of business, allowing companies to offer a broader range of services and offer greater benefits to their clients. IT, like most industries, has benefited from outsourcing, both as a recipient of outsourced work – many companies now outsource their IT needs rather than managing their own department, for example – and also outsourcing their own processes to other companies.

However, while outsourcing has quickly become the new normal, it does nevertheless pose a significant risk to IT businesses – particularly in conjunction with some of the challenges we have discussed thus far. Every time an IT business chooses to outsource an aspect of their service, they are taking a security risk. However, simply not outsourcing is not a viable option either, as IT companies seek to provide a more comprehensive range of services in order to remain competitive.

To overcome this challenge, the only viable answer is a huge amount of research. IT businesses will have to endeavor to be especially careful of the companies they outsource to, ensuring that security and data protection will be well-preserved at all times.

Final thoughts

While IT businesses undoubtedly face many challenges over the next few years, the overall outlook is nevertheless rosy. By focusing on the known challenges, and seeking ways to address them, IT businesses like yours can ensure that they can continue to perform well and embrace the opportunities that the future may bring.

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