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After wrapping up another year of collaboration, we asked Canon Business Services (CBS) employees across Australia and New Zealand about the technology trends they’re seeing in their work with our customers, as well as their top predictions for 2024.

The following are a few key lessons and takeaways you can learn from what our on-the-ground experts are seeing in companies like yours.

Key challenges facing businesses in Australia and New Zealand

According to CBS team members, ANZAC companies are encountering challenging business conditions stemming from the following trends:

  1. Keeping up with new technology trends
  2. Navigating financial tightening
  3. Recruiting skilled staff
  4. Maintaining security and compliance

1. Keeping up with new technology

Many of our customers are feeling the impact of legacy IT systems in the form of operational inefficiencies, under-resourcing, and outdated technologies. Yet many businesses’ ability to invest in modernisation is being impacted by market-wide financial tightening.

The top technologies on companies’ modernisation wishlists these days include artificial intelligence (AI), business intelligence (BI), data analytics, and data warehousing solutions. AI, in particular, is beginning to feel like a requirement to some businesses—which is unsurprising, given that IDC foresees global spending on AI solutions surging to over $500 billion by 2027.

AI spending

Frederic Giron, VP and Senior Research Director at Forrester, notes that, “The promise and potential of generative AI (genAI) combined with a new wave of technological innovations will inspire more APAC firms and leaders to follow some of the early trailblazers and to fuse the power of AI with their business efforts and outcomes in the year ahead”.

Yet despite this enthusiasm, companies would be wise to take a cautious approach with AI. Critical questions still exist regarding this technology trends lack of transparency and objectivity, as well as its potential for training data manipulation and the generation of “hallucinations”, or false output. There’s also a need for strong governance within AI to ensure IP is appropriately protected.

As a result, businesses looking to capitalise on AI momentum whilst keeping risk low should seek out qualified partners to help implement it appropriately.

An example of a technology trend with responsible automation in practice, take Robotic Process Automation (RPA). Although RPA is not AI, it can be safely used to delegate repetitive, manual tasks to robot agents, streamlining routine tasks like payment scheduling and document processing. However, because the deployment of Robotic Process Automation can be highly controlled through the use of appropriate security and compliance protocols, risk is mitigated—in some cases, above and beyond what’s possible with human users.

Vendor strategy also poses a challenge

Interestingly, though many companies are currently facing complex questions regarding vendor strategy, the challenges they’re solving for may be diametrically opposed.

For example, our team has seen evidence of interest increasing at some organisations to move to a multicloud approach to avoid vendor lock-in. Conversely, others are seeking new opportunities for optimisation within a single vendor’s stack.

According to Faissal Hatam, Business Development Manager at Canon Business Services New Zealand, there has been “a notable and concerted effort across sectors to streamline their software and processes, aiming to integrate them within the Microsoft stack ecosystem.” Refining and optimising your cloud solution approach—potentially including the use of Azure public cloud, private cloud, hybrid cloud, and multi-cloud solutions—may impact the vendor strategy that’s best for your company.

2. Financial tightening

Inflation and budget cuts making this list may come as no surprise, but they still represent significant headwinds across most organisations. Several of the specific challenges seen by our team include:

  • Banking rate increases, which are currently at a 12-year high in Australia and a similarly high level in New Zealand
  • Ongoing increases in hyperscale cloud costs across Microsoft Azure, Amazon Web Services (AWS), and Google Cloud Platform (GCP)
  • Slow post-pandemic growth across some industries (with sectors like travel and tourism being notable exemptions)
  • Changing consumer demand shifting increasingly to digital offerings, due in large part to the rising cost of living
  • Rising costs of raw materials and energy, driven largely by higher energy generation costs and legacy supply chain disruptions

As a result of these challenges, many businesses are reacting by:

  • Reducing budgets available for CAPEX spending
  • Lowering their overall spend or reallocating resources to highest-priority cost centres
  • Lowering their loan appetite for financing major improvements
  • Increasing their interest in restructuring or in mergers and acquisitions

Marlena Anastasi, an Account Manager at Canon Business Services Australia has seen evidence of these changes first-hand. “I have seen huge internal restructures within my client portfolio,” she states. “Keeping costs down and trying to consolidate is a big ticket item”.

That said, there is some evidence that—while companies may experience these challenges on an individual basis—overall IT spending is actually expected to increase in Australia in 2024, with software representing the category with the largest gains. Overall, Gartner estimates that “IT spending in Australia is projected to exceed AU$133 billion in 2024, an increase of 7.8% from 2023”.

IT spending

Cyber security spending represents another big growth area, with additional Gartner data suggesting investments in this area will increase by 11.5% in Australia and 11% in New Zealand in 2024.

3. Recruitment of qualified staff

Tight labour markets are not a new challenge in either Australia or New Zealand. But these trends are being exacerbated by the growing number of restructures we’re seeing.

“I have observed a significant trend this year with many companies undergoing restructuring efforts, which has posed challenges in their quest to identify suitable candidates to fill critical roles”, notes Hatam.

Slow and reversing wage gains relative to consumer pricing are further compounding recruitment challenges. Steve Bolton-Huttlestone, another Account Manager at CBS Australia, remarks that, “There is still a skills shortage and wage expectations in the technology industry remain high, which I believe we see as a service provider”.

Intriguingly, a mismatch between labour market skill sets and employer demands may also be contributing to companies’ inability to find and secure top talent. According to IDC’s 2024 predictions report, “Through 2026, underfunded skilling initiatives will prevent 65% of enterprises from achieving full value from those tech investments”.

Difficulty accessing required skills is one factor influencing companies’ decision to partner with companies like CBS. Compared to bringing on full-time talent—which may be especially expensive in Australia due to increases in the super guarantee rate—CBS’ professional services and managed services teams deliver scalable, specialist support that can fill skills gaps on a one-time or ongoing basis.

4. Security and compliance

Across industries and sectors, our team has seen that security compliance and the potential for system breaches continue to keep companies up at night. This is likely why cyber security and compliance remains one area that remains relatively untouched by the financial tightening affecting other business initiatives.

“In a time where there is the watchful eye of discretionary spend”, Bolton-Huttlestone notes, “cyber security is the area where investment is ongoing. No one wants to be the next name in the press.”

Cloud security and data sovereignty requirements and preferences are especially big concerns in FSI-regulated organisations, though no businesses are truly untouched by security considerations. The key cyber security and compliance standards that are top-of-mind for CBS customers include:

Governing Body Standard
International Organization for Standardization (ISO) ISO 27001
Australian Prudential Regulation Authority (APRA) Prudential Standard CPS 234
National Institute of Standards and Technology (NIST) NIST Cyber Security Framework (CSF)
Australian Signals Directorate (ASD) Essential Eight

Establishing secure and compliant systems can be challenging, and we recognise that the skills shortage referenced earlier makes finding talent that can navigate these considerations even more difficult. Canon Business Services ANZ’s security team can fill these gaps, offering solutions ranging from cybersecurity assessments and uplift consulting through to managed SOC services based on Microsoft SOAR and Azure Sentinel SIEM.

Additional technology trends to Monitor

Beyond those emerging technology areas surfaced by the CBS team, a number of think tanks and industry sources have released their own reports on global trends. Gartner, for example, lists 10 strategic technology trends companies should pay attention to:

Gartner 10 tech

2024 technology trends present opportunities for motivated organisations

Despite the doom-and-gloom nature of these observations, opportunities exist to overcome these challenging conditions in 2024—if companies are willing to get creative with their business models and utilise emerging technology.

The following are our team’s three recommendations on how to capitalise on these trends:

  1. Double down on efficiency
  2. Demand ROI on costs
  3. Put your customers first

1. Double down on efficiency

Tightening financial conditions means there has never been a better time to prioritise capturing new efficiencies—and digital transformation in particular is a critical component of doing so.

Despite the concerning state of the market, “There are opportunities for those who are lean, and who are improving the efficiency of their own business through adopting a digital transformation roadmap”, says Bolton-Huttlestone.

Microsoft Dynamics 365 is one solution that can support increased efficiency between teams. But another opportunity that’s worth investigating right now is Microsoft Copilot, a collaborative tool that boosts efficiency by streamlining tasks and automating workflows. Its data-gathering and interpretation capabilities also deserve attention. According to Murray Jess, General Manager of Sales and Marketing at Canon Business Services ANZ, “Having fast access to information from disparate data sources will have a huge impact”.

2. Demand ROI on costs

With budget cuts and reallocations on the horizon—if not already occurring—any potential investment must have a solid business case validating its ROI behind it, whether in IT or any other department.

Business process automation (BPA) is one of the most exciting opportunities for reducing costs whilst improving both team morale and customer experience. As an example of BPA in action, take Allied Credit, which adopted CBS’ Robotic Process Automation solution within its payment amendments process.

According to the company’s CFO, Matt Devine, “Amending payment is an extensive process as it requires changes to several elements in the contract. Canon Business Services ANZ has enabled us to automate a complicated 45-minute manual task, saving time and hassle. The robot amends scheduled payments for the customer and ensures the customer is contacted appropriately based on the new payment schedule. Based on this schedule, we’re taking our learnings from this robot and applying it to other cash allocation processes.”

In this case, the ROI is clear—eliminating the need for human users to complete 45-minute tasks has the potential to reduce labour costs or free up labour hours that can be reallocated to higher-value work.

3. Put your customers first

Finally, in a conservative spending environment, companies must remember that every customer counts—and that those who fail to effectively serve their customers risk falling behind amidst conditions that may be difficult to recover from.

Data from the 2008 U.S. Great Recession demonstrates the importance of continuing to proactively serve customers, even while looking for smart ways to cut costs. In 2010, authors Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen of the Harvard Business Review assessed the performance of public companies in the three years leading up to the recession, the recession itself, and the three years after.

Out of the 4700 companies the team surveyed, only 9% of businesses flourished after the recession, beating their pre-recession financial metrics and outpacing competitors by at least 10% in terms of sales and profit growth. The key to their success? Savvy combinations of both proactive and reactive moves.

Sustainable IT

According to the study’s authors, “These companies reduce costs selectively by focusing more on operational efficiency than their rivals do, even as they invest relatively comprehensively in the future by spending on marketing, R&D, and new assets.”

Although we may not currently be in a recession, speculation that one may be on the way for both Australia and New Zealand abounds. It’s also arguable that the financial tightening already occurring mimics the extent of a recession to the point that technically entering one may not have a material impact on business decision-making in the year ahead.

So, what does it mean to put your customers first, and how can your company act proactively to increase your odds of coming out ahead of more reactive competitors? Proactive organisations recognise that customers want their digital interactions to be accessible, easy to use, and secure. They also want viable channels for sharing feedback and complaints with the companies they choose to do business with.

Delivering against these requirements may require investment into new technology—such as cloud-based infrastructure with high up-time and application modernisation initiatives—but this spend is likely to pay off. “I have seen businesses adopting new digital platforms and building this roadmap as they strive to be better than their competitors”, says Bolton-Huttlestone.

Partnering with Managed Service Providers for success in 2024

Navigating the challenging market conditions ahead requires technology partners that can support your highest-priority needs, whether you’re focusing on modernising legacy services, shoring up your cyber security and compliance, or investing in customer-facing initiatives.

At CBS, we have seen increased investment in Managed Service Providers (MSP) across Australia and New Zealand. As noted above, many organisations are under pressure to keep up with changing technology whilst modernising their business and doing more with less. MSPs can provide valuable support with compliance, sustainability, and a breadth and depth of services that makes it possible for companies to consolidate vendors and reduce costs.

TechTarget MSP

Canon Business Services ANZ supports Australian and New Zealand businesses with a full suite of solutions, including scalable IT infrastructure design, process automation and optimisation, and modern work solutions. Let our expert teams set you up for success in 2024 and beyond.

Reach out to the CBS team today for more personalised guidance on your business’s biggest challenges.

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