This year will assuredly see tech leaders laser-focused once again on digital initiatives, but the processes they have in place for doing so won’t be a slam dunk for success. Worse, recent research suggests that mistakes born of digital transformation are a top cause of concern for businesses.

Gartner report on emerging risks shows that while companies continue to prioritise and fund digital initiatives, two-thirds not only fail to deliver on their promises but also reveal “enterprise weaknesses, causing organisations to see a gap between expectations and results.”

Digital technology in the enterprise creates challenges in other areas as well, and tech leaders say their most difficult problems revolve around security threats and data privacy, as well as a shortage of top talent with high-tech skills.

Read on for a rundown of daunting challenges business leaders expect to see in 2020, and how forward-thinking executives are addressing them.

Gig economy worries

Companies frequently address digital skills gaps with contract workers and other flexible staffing strategies, but tech executives see the rise of the gig economy creating several challenges, including keeping sensitive company and personal data secure.

“Experts are predicting continued growth in the gig economy and telecommuting,” says John Curtis, vice president of business sales for Samsung Electronics America. “With remote work growing more common, companies need to refine the technologies and tools that enable this work, while ensuring the security of their IP and data.”

Distributed teams have their advantages, including flexibility and the ability to pivot quickly. Yet the Gartner report warns that remote work also requires planning to address related challenges: “A growing remote workforce, in both a work-from-home and co-workspace model will unintentionally expose the organisation to vulnerabilities in data privacy and the security of confidential information.”

Security isn’t the only worry in the gig economy, however. “Finding the right talent is always a top concern,” says Christine Telyan, CEO at UENI. “On one hand, the growth of the gig economy presents a huge opportunity by widening the pool of talent a company can access. On the other hand, having a team — especially a tech team — dedicatedly working on a single business goal without being distracted by other projects has its advantages. Finding the right balance of full-time and part-time talent for a company will be key to succeeding in 2020.”

Data privacy

Concerns about data governance are ongoing, and specific requirements of the GDPR need to be addressed on multiple levels and by various departments within an organisation.

“These regulations — as well as others that may emerge [in 2020] — carry stiff penalties for non-compliance,” says Qubole co-founder and CEO Ashish Thusoo. “Enterprises need to design their architectures to address requirements like the right to be forgotten and right to erasure. This must be achieved across all data repositories and all environments, including private, public and hybrid clouds. Vendors will continue to innovate next year with features and solutions to help address this critical need.”

Venkat Rajaji, vice president of product management at Quest Software, expects more regulations next year from state governments that will require organisations to rewrite their current policies to be in compliance.

“Regulations across states will likely be similar, and the easiest way to abide by them all will be to identify the most restrictive to ensure compliance,” Rajaji says. “Eventually federal regulations will become inevitable.”

Measuring new technology with ROI

Companies considering advanced technologies such as AI and robotic process automation (RPA) will need to weigh the benefits of innovation with provable benefits to the business rather than simply adopting trending technology, says Mahi Inampudi, CTO and CPO at Envoy Global.

“It’s about finding the right business case,” says Inampudi. “Balancing resources to support this endeavour along with business growth continues to be a daunting challenge for all CIOs and CTOs. There are never enough resources to execute every good idea the business can think of, so the roadmap always needs to prioritise the highest value add and lowest level-of-effort ideas, regardless of whether the value comes from cutting-edge new technology or leveraging existing capabilities.”

Security threats

Rather than focusing security efforts on fighting off exotic hacks or unknown threats, Jake Olcott, vice president of security ratings for BitSight, is more concerned about systems that haven’t addressed already-known vulnerabilities.

“Zero-day vulnerabilities receive the most attention from the media, but in 2020, hackers won’t bother with these highly publicised attacks,” Olcott says. “Instead, they’ll hone in on simple strategies, like gaining access to a network through an org’s vendor or third-party or through lack of patching, as with BlueKeep.”

Olcott also predicts data breaches will continue to cause problems for Fortune 1000 companies, due to holes in the security of the organisation and its partners, unless the companies are able to focus their efforts on continuous monitoring for security threats.

“Data breaches will plague these organisations,” Olcott says. “Execs and boards will face severe legal and financial ramifications. Fed up with the breaches, attacks, and frauds impacting revenue, shareholder suits targeting board members will gain traction — forcing boards to take a larger, more informed role in cybersecurity. Investors will keep a closer eye on how companies perform in this area, going so far as to incorporate cyber into their [Environmental, Social, and Governance] analysis.”

Yet another concerning security challenge for next year is combating the rise of ransomware. Ken Galvin, senior product manager at Quest Software, suggests some organisations will need to create a new role for security pros dedicated to countering the malicious software.

“Half the battle in solving a security problem is isolating it,” Galvin says. “But with stressed IT personnel and the back and forth required to make a plan, get it approved and determine the budget to resolve an issue, there’s always a lag. The C-level is beginning to understand now, more than ever, the importance of protecting against ransomware attacks. There should be someone specifically delegated to work with teams to identify security issues, determine how to solve them and ensure that appropriate measures are approved in order to protect against these increasingly sophisticated attacks.”

Managing risk — and expectations

Matt Mead, CTO of SPR, acknowledges Gartner’s findings on how frequently digital initiatives fail, yet that reality can be hard to manage among demands for quickly adopting new technologies.

“Businesses and customers now expect software and solutions to have rapid releases that adapt over time, similar to consumer technology,” Mead says. “IT has to adopt new tech, trends and approaches to move at the expected pace. It’s difficult to stay on time and on budget. CIOs need to manage all IT projects in a way that mitigates risk. Start by making sure projects are using a modern agile approach and place all high-risk activities early in a project’s life cycle. That way, if a project isn’t going to be successful, it can fail fast rather than at later stages.”

Gartner advises breaking up initiatives into distinct projects to mitigate risks across the organisation. “Breaking up business model tests into discrete initiatives avoids the potential for catastrophic disruption. Successful organisations favour incremental investments, which helps the organisation learn at scale,” according to the report.

Facing the skills gap

The much-discussed and ongoing IT skills gap will cause organisations to seek solutions through automation, says John Ferron, CEO at Resolve Systems.

“This lack of skilled technical workers comes at a time when IT complexity is increasing exponentially,” Ferron says, “and data volumes are exploding — all driven by digital transformation initiatives underpinned by understaffed IT departments. As we look to 2020, IT teams should expect to see increasing focus on intelligent automation and AIOps to help them truly do more with less by automating repetitive tasks and processes and enabling each IT pro to manage increasingly more infrastructure on a per-person basis.”

Upskilling on the fly

Developing new skills is key, says Envoy Global’s Inampudi, but it’s challenging in an environment where technology is evolving at an ever increasing pace.

“Creating a culture of learning and development is probably one of the most important topics for CIOs every year. When we all feel like we are learning and being challenged at work, retention improves,” Inampudi says. “My concern will always be whether we are exceeding the elevated expectations of our customers.”

Cloud whiplash

Cloud-first strategies that lacked vision may lead to problems that cause organisations to pull back. It’s an unforced error, argues Adrian Moir, lead technology evangelist at Quest Software.

“As more and more organisations begin to adopt the hybrid cloud, we’ll eventually see a trend of cloud repatriation,” Moir says, “which is what happens when companies don’t take the time to invest properly in migrating to the cloud. All of a sudden, organisations are realising that they’re spending significantly more than anticipated.”

And it’s unnecessary, Moir says, when the organisation has a clear vision and executes the strategy created before the move ever happens.

“The best thing for companies to do is to analyse the data and workloads they have before contemplating the move to cloud in order to figure out the costs and potential service impacts involved,” Moir says. “It’s important to work with a solution that analyses the behaviour of machines, applications and workloads to figure out what will work best in which cloud solution. Having a cloud-first strategy needs to be examined to ensure that it is the right thing for the business and not just hopping on the bandwagon.”

Culture change in a digital world

Digital transformation requires an ongoing commitment that evolves over time, argues Geoff Webb, vice president of strategy at software company PROS, and a change in mindset rather than a reliance on technology alone.

“In the coming year, business leaders will need to understand that the digital transformation doesn’t end but instead becomes part of how business leaders solve challenges,” Webb says. “Specifically they’ll need to understand how businesses can drive the level of organisational alignment necessary to deliver meaningful results quickly enough to impact the business. It’s easy to throw new technologies at a problem, but the deep shift that has to occur requires a level of cultural and organisational support that can be challenging to drive and maintain over the long run.”

Via CIO.com, Top 9 challenges IT leaders will face in 2020 by Paul Heltzel, 2020.