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Global layoffs in Big Tech, an unstable geopolitical situation in Central and Eastern Europe, skyrocketing inflation, and a decline in investments – these are just some of the factors currently shaping the IT industry.
The new realities mean the need to confront previously unknown or more intensified challenges. Find out how IT management in Poland is addressing the challenges it has had to face in 2023.
Rafał Boczkowski, Partner at Neumann Executive, provided comments for the article.
1. Budget cuts instead of investments in new technologies
Many IT companies are currently focusing primarily on budgets and cost-cutting, rather than redirecting all their energy and resources towards long-term development. Investments in new technologies should be made now to ensure that companies are prepared for upcoming challenges. Unfortunately, in the current geo-economic situation, budgets for innovation are often among the first to be reduced. This is a mistake because innovation is the driving force of the IT industry.
“In today’s business environment, characterized by dynamic changes, companies must be prepared for future challenges. Innovation is crucial for maintaining competitiveness and long-term success. Unfortunately, focusing solely on cost-cutting can lead to the loss of the ability to adapt to changes. Companies should consider investments in new technologies as a tool to increase efficiency, streamline processes, and create new products and services,” says Rafał Boczkowski, Partner at Neumann Executive.
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2. Rising business costs
The year 2023 brought a series of turbulences closely related to both the global and local economic situations. As a result of inflationary policies, most IT companies experienced a record increase in operational costs. Meanwhile, the economic downturn led to a sharp slowdown in the execution of new projects. Due to the volatile market conditions, clients are also holding back on technological investments.
“This year, IT companies will be focused on combating inflation and the challenges associated with acquiring new customers. They will strive for sales growth, increased profits, and maintaining customer interest. They will also concentrate on diversifying their revenue streams. Managers will need to focus their efforts on maximizing organizational efficiency to be fully prepared for a potential recession,” comments Rafał Boczkowski.
3. Continuous innovation
The current economically uncertain times create space in the IT industry for untapped or undiscovered opportunities. Just like during any crisis, new and innovative solutions will emerge. As Albert Einstein once said, “In the middle of difficulty lies opportunity.”
This is confirmed by research conducted by EY¹— as many as 73% of technology industry leaders believe that today’s economic uncertainty will positively impact their organizations’ ability to innovate. 93% of them are confident that innovation will help them emerge from the current economic slowdown and become stronger. Software manufacturers will continue to pursue innovative solutions and improvements.
4. Collaborative partnership with other companies
The unstable geopolitical situation and surging inflation clearly highlight how important strategic collaboration with other organizations can be for IT companies. Managers must identify prospective partners who align with the long-term vision and mission of their company. The ideal collaboration is one that enables the exchange of expert knowledge and industry-specific needs.
“Collaborating with other companies (not necessarily tech-related) can paradoxically prove to be an effective solution in challenging and unstable times. Strategic partnerships allow for the exchange of experiences. Through such a partnership, the client receives a technological solution backed by industry knowledge. It’s a win-win situation,” says Rafał.
5. Low Code/No Code
Software development is expensive. It’s not surprising that IT companies continually seek new ways to reduce the costs of delivering products. The Low Code/No Code trend is the perfect response to these challenges.
Low Code/No Code platforms revolutionize the way software is created—accelerating the application development process, enabling companies to deliver new solutions much faster. This shortens project completion times and significantly reduces their costs.
“Low Code/No Code is the future of the IT industry. Companies that ignore it will struggle to compete with other organizations that embrace this trend, achieving a substantial reduction in the costs of creating MVPs,” adds Rafał Boczkowski, Partner at Neumann Executive.
Discover the latest IT salary rates and learn about the current compensation trends in the industry. Download the IT Salaries in Poland 2023 Report.
6. Cybersecurity as a priority
According to the IBM Security report ‘Cost of a Data Breach’², the average cost of a data breach in 2022 was $4.35 million. This represents a 2.5% increase compared to the previous year.
The war in Ukraine and the rising costs of data breaches have made security issues a priority for many organizations. Investments in cybersecurity are crucial for protecting technological know-how, projects, and entrusted data.
“Leaders in the IT industry should focus more than ever on building even better-qualified teams and significantly increase their cybersecurity spending. The costs of data breaches are expected to continue rising—according to ‘Cybercrime Magazine’³, cybercrime is estimated to cost as much as $10.5 billion annually. Managers should also go beyond technology and prioritize the safety of their employees, investing in education on detecting phishing and manipulation,” says Rafał.
7. Sustainable development in the IT industry
Sustainable development in the IT industry is a key element of the transformation of the technology sector towards a more environmentally friendly direction. Pursuing sustainable development involves achieving energy efficiency, recycling energy waste, using renewable sources, and efficient resource management, among other practices.
The IT industry also plays a crucial role in creating innovations that support sustainable development in other sectors, such as energy, transportation, agriculture, and environmental protection.
“Companies that integrate these values into their operations can gain a competitive advantage, attract more environmentally conscious customers and investors, and contribute to creating a more sustainable future,” says Rafał Boczkowski.
8. Growth in the use of AI tools
Artificial intelligence is redefining the way technology companies operate. AI enables the automation of many internal processes and supports technology companies in delivering personalized and innovative products and services.
One thing is certain: AI is an integral part of the future of technology and will continue to evolve, opening up new possibilities. As many as 80% of managers plan to increase their investments in artificial intelligence in the coming year². This is due, in part, to the immense global interest in AI tools (such as Chat GPT), which makes customers want to incorporate such solutions into their products or services.
“The increased use of AI tools in the IT industry represents not only the promise of greater efficiency but also challenges related to ethics, data security, and employee training. Managers must be prepared for potential challenges that may arise with the increased utilization of artificial intelligence,” says Rafał Boczkowski, Partner at Neumann Executive.
9. Reskilling and upskilling competencies
There is perhaps no other industry that requires such a spectrum of improvement and expanding of knowledge and skills as IT. New technologies and tools continue to emerge in the market, essentially necessitating the acquisition of new knowledge or skills—learning programming languages, handling platforms, or working with frameworks. Developers must, therefore, have the time and budget for improving their skills.
Reskilling and upskilling competencies in the IT industry are not only beneficial for employees but also for companies, as highly trained specialists enable them to respond more effectively and rapidly to changes in the market. Managers must be ready to invest in the skill development of their teams to meet the challenges of the modern IT industry.
What are the challenges for IT management in Poland?
The IT market in Poland in 2023 faces many challenges. It must confront unfavorable geopolitical circumstances and a sharp slowdown in investments in new technological projects, above all.
In the face of these and many other challenges, IT management in Poland must be prepared for even faster and less predictable changes. Leaders, through their flexible approach and strategic collaborations, can effectively overcome these challenges and achieve success in an extremely competitive technology market.
Sources used in this article: ¹EY, EY survey reveals innovation remains a major business priority for technology companies, despite economic disruption, accessed on: 5.09.2023, Source. ²IBM Security, Cost of a Data Breach Report 2022, accessed on: 5.09.2023, Source. ³Cybercrime Magazine, Cybercrime To Cost The World $10.5 Trillion Annually By 2025, accessed on: 5.09.2023, Source.
