Technology innovation is happening at breakneck speed, creating new opportunities and threats for companies of all sizes and industries. At the same time, ever-evolving macroeconomic conditions are pressuring leaders to drive business outcomes against tighter margins.

While today’s business climate certainly feels like a test for the survival of the fittest, your goal should not be to just survive, but rather to thrive. In this new reality where a bank can go under in two weeks, and new innovations are fundamentally changing our ways of life (e.g., ChatGPT) the speed with which businesses are able to respond to changing market dynamics and customer needs is critical.

In a world where companies are defined by the digital services they can deliver, software agility IS business agility, and in turn results in better business outcomes.

Software agility translates to teams being able to quickly build and deploy applications in order to address changing customer needs, create new revenue streams, and scale to meet demand. Software agility also means that if the organization would like to leverage a new technology to innovate and remain competitive, teams can easily deliver an app that does just that.

However, as organizations rush to adopt cloud computing, Kubernetes, and open source software, they are faced with a sprawling landscape of tools and services that can be overwhelming and costly. And while it’s inspiring to behold the innovation happening around us – or as Stephen O’Grady from RedMonk called it “an embarrassment of riches” – developers can find themselves suffering from “analysis paralysis” and even worse, having to stitch their favorite tools and services together, taking time away from writing code and delivering those applications that run the business and delight the end users.  

Instead of tools serving to enhance productivity, today’s developers are caught in a tangled web of tools and services just to support their day-to-day. Additionally, this has added to the complexity of managing apps and infrastructure in a multi-cloud environment, where teams have to control costs, ensure performance, and manage consistent security policies across these diverse and distributed environments. Businesses with a multi-cloud environment also face a growing number of IT silos that can lead to inefficiencies and increased risk. And, as is increasingly common in today’s tightening labor market, a lack of skilled professionals adds yet another layer of difficulty. The complexity of today’s digital systems has multiple points of friction that need to be addressed if we are to achieve true business agility.

Organizations need a new approach – establish a common platform supported by a platform engineering function to unify application delivery and management across different apps and clouds. This will help in optimizing application development and operations, and strengthening security and compliance. What we are finding is, for developers to be successful and productive, they need: 1. A common data platform, 2. A seamless, self-service experience with minimal hand-offs and separation of concerns 3. Strong knowledge of open source technologies.

With our comprehensive Tanzu and Aria platforms, VMware has become a trusted partner to help organizations become more agile and responsive in software development. Delivering accessible, developer-friendly experiences and IT operational management is core to our DNA. With the depth and breadth of our technologies, alongside the consulting expertise of Tanzu Labs, we help organizations transform their methodologies and practices as well. We deliver near real-time insights across the application lifecycle with simplified, streamlined, and powerful solutions for developers, platform engineering and cloud operations teams to seamlessly provision, monitor, secure, and optimize apps across multiple clouds and their entire app portfolio.

We help customers across nearly every industry – from retail and healthcare to financial services and the public sector – build a culture that empowers developer productivity to enable the delivery of better, more secure software so they can meet changing market dynamics and customer expectations.

When there’s a market condition, how it impacts your business – whether positively or negatively – depends on how fast you can change, move, and adapt. At a time when organizations are pressured to perform and achieve business outcomes more efficiently than ever, now is the time to accelerate app delivery and digital transformation efforts. The best defense is an optimized and more productive offense. Change is inevitable, as we’ve learned in the last few years. So now and in the months and years ahead, it’s imperative for organizations to continue on their journeys to be future-ready for the next disruption.

To learn more, visit us here.

Software Development

On the morning of Feb. 24, 2022, Russia invaded Ukraine, escalating a years-long conflict between the two countries. In the year since those first pre-dawn attacks, hundreds of thousands of troops and civilians have been wounded or killed, millions of Ukrainians have been displaced, and cities have been shattered.

The previously rapidly growing IT industry in Ukraine was also rocked by the invasion. In 2021, the country’s computer services exports had more than tripled over the previous five years to $6.9 billion — 38% of the country’s gross domestic product — and the sector employed 289,000 professionals, according to IT Ukraine Association. The IT sector in Ukraine had stabilized after the 2014 Russian incursion with growth accelerating beginning in 2017 and “supercharging” in 2020 and 2021, says Katie Gove, senior director-analyst in Gartner’s Technology and Service Provider Research division.

In the weeks following the invasion, IT services providers in Ukraine worked quickly to relocate thousands of workers or set them up for remote delivery where necessary. One year later, the industry’s remarkable resilience is clear. As Konstantin Vasiuk, executive director of the IT Ukraine Association wrote in a recent report: “It remains the only export industry in Ukraine that operates to its full capacity in wartime.”

Indeed, by the end of 2022, the Ukraine IT industry had delivered $7.35 billion in computer services exports, an increase of 5.8% over the previous year. “Even during the most negative scenarios, they’ve been able to show some growth,” says Gartner’s Gove. “It’s a pretty substantial statement that they’ve been able to not only scrape by, but also make some gains.”

That continued business expansion was made possible by the efforts of IT service providers with delivery centers in Ukraine to first take care of their people, and then to put them in positions to continue to perform their work — largely software development — whether in another part of Ukraine, another country, or remotely at home. But the growth is also attributable, in large part, to global goodwill for the country as well as an ongoing global shortage of highly skilled technology talent.

Immediate response and recovery

In the weeks leading up to the invasion, IT companies with operations in Ukraine, read the writing on the wall and put their business continuity efforts into effect. “This has been a combination of setting up delivery centers elsewhere in Europe, expanding delivery centers in India and other alternative non-European countries, and, finally, leveraging remote work using Starlink for employees who could not leave Ukraine and were not drafted,” says Peter Bendor-Samuel, CEO of IT and business services research firm Everest Group.

While smaller firms or startups may have had only one delivery center, most application development firms, which make up 80% of Ukraine’s computer services export market, have numerous delivery locations. “The pattern has been to establish multiple redundant delivery teams and locations,” says Gove. “All the big companies have been doing this for ages at scale, but even midsize providers have multiple delivery locations.”

EPAM Systems, for example, which had 14,000 employees working in Ukraine, moved about 10% of its Ukrainian staff out of the country and has relocated hundreds more employees and their families to safer parts of Ukraine. The company, initially founded in Belarus with headquarters in the US, also began accelerating hiring at its other locations in Central and Eastern Europe, Latin America, and India.

“They offered all of employees that wanted it,” says Gartner’s Gove. “EPAM had already been invested in expanding talent pools in Latin America and they supercharged that.” (EPAM Systems also ceased doing business with Russia and moved its Belarus operations to Uzbekistan.)

The COVID-19 pandemic had provided companies with extensive experience enabling remote work, which also helped during the transition period. “It was a jumping off point for the ways we work to continue to be viable,” Gove says.

It was a remarkable pivot amid an unspeakably difficult time for the country. “We saw their resilience very early on,” says Gove. “During the first couple of weeks after the invasion, clearly a lot of SLAs were not able to be met. But within several weeks, those SLAs had gone right back up into the 90s.”

Leaving Kharkiv: One provider’s story

Kharkiv-based Aimprosoft, a software development firm with US and European customers across industries such as ecommerce, healthcare, automotive, and telecom, had been in high growth mode throughout 2021. The need to do more work digitally during the pandemic drove demand for greater business process automation, sending revenues 61% higher. “Businesses were going online en masse, and everyone needed specialists who could implement e-commerce solutions, reduce overhead by automating routine tasks, launch telehealth solutions,” says Aimprosoft CEO Maxim Ivanov. “We had even more work to do.”

Maxim Ivanov, CEO, Aimprosoft 

Ivanov / Aimprosoft

A month before the invasion, Aimprosoft opened a new office in Ivano-Frankivsk in Western Ukraine near the Polish boarder as a business continuity measure. Some employees transferred immediately while others waited. “Everybody hoped to the last that the new office would become our branch office in the context of business expansion,” Ivanov says.

In 2020, the company had developed robust processes for remote work. “It may sound paradoxical, but COVID gave us the advantage. We’d had enough time to get our processes up and running for delivery from anywhere,” says Ivanov. “The pandemic taught us to be flexible and work effectively remotely. The war showed we could make internal moves across Ukraine without losing productivity.”

The company’s cloud-based infrastructure is hosted in Germany, with its infrastructure and customer code stored in one data center and backups of both in another. “An old rule of thumb, ‘to make a copy regularly,’ has proven to be excellent,” Ivanov says. “This distribution is reasonable and helps protect your business from force majeure accidents like war, natural disasters, or fire, which are less predictable.”

Reliable access to power was also a consideration. Aimprosoft set up its office in Western Ukraine with everything necessary for continuous delivery: Starlink internet terminals, power generators, and fuel reserves. “Having autonomous power facilities will make you more resilient,” Ivanov says.

The biggest challenge was explaining to customers outside the country that the company could continue to work at the same level of productivity “when there is a full-scale war in your country, how we could work when bombs are flying, and we are promised conquest in three days,” says Ivanov. But the company’s leaders had confidence, having even signed a contract with a new customer the day of the invasion. “I never stick my head in the sand. Being a leader means being able to be responsible and having a contingency plan,” Ivanov says. “I was lucky because our team is made of people who can be relied upon and have lived up to their expectations. Some employees worked standing in traffic jams while relocating to safer regions of the country.”

The first month was the hardest. “We all had to come to terms with the fact that what we all feared and didn’t want to be had already happened,” Ivanov says. “However, we had a plan B, and we took advantage of it, took a breath, and quickly adapted to the new reality.” The safety of employees and their families came first.  “We didn’t force anyone to work at 100% capacity in the first days,” says Ivanov. “But the demonstrated responsibility illustrated that our team was incredible. No one gave up and ran away. We didn’t fire anyone.”

Within a month, the company was recruiting new hires. And twelve months later, the company’s service levels give little indication of the ongoing turmoil in other parts of the country. “The war changed us,” Ivanov admits. “But what remains unchanged is our responsibility to our relatives and clients.”

Good will and a global talent shortage

In the early days, there was some impact to new business for IT providers in Ukraine. “Clients moved work to other destinations and often other firms,” says Everest Group’s Bendor-Samuel. “However, there has been a strong sentiment amongst the clients to support these firms, and much of this work has now returned.”

The impact of good will for Ukraine — not just from customers but from the broader global community — can’t be understated. “There’s been a lot of stickiness and lots of support for Ukraine,” says Gartner’s Gove. “It’s been pretty remarkable.”

The impact of positive sentiment for Ukraine is reflected in the fact that the IT industry in Belarus and Russia, which has a similar profile to Ukraine, has not fared well.

“Belarus and Ukraine have similar talent pools with both IT service providers and enterprises sourcing there for tech talent for a long time because of their academic tradition and focus on math an engineering,” says Gove. “But Belarus has taken a dip because they’re so connected with Russia.”

The US and UK are by far the largest market for Ukrainian IT services, following by Malta, Israel, Cyprus, Switzerland, and Germany, according to the IT Ukraine Association. “Most [clients] worked to hedge their bets and set up alternative delivery, but if the Ukrainian providers proved they could continue to deliver, they tried to keep the work with them or returned the work or added other work as the new delivery came online,” says Bendor-Samuel.

Aimprosoft has been working with some customers for more than a decade and others for a much shorter time when the Russian invasion took place. Swedish ecommerce consultancy Koalitionen had been working with Aimprosoft for two years. “Our main concerns prior to the conflict was of humanitarian sort: Would the company be able to provide safety to their employees?” says Koalitionen CEO Amir Mofidi. “For us, the uncertainty of not knowing if the staff were safe was the most difficult part. We were relieved when we found out that the people that we work with were safe.”

Aimprosoft felt supported by its customers. “Our clients are amazing,” Ivanov says. Some paid the company’s developers on their days off. Others offered personal bonuses to Aimprosoft employees. Others sent pics of their children baking cookies to raise money for Ukraine. “It touched us to the core,” Ivanov says. “This empathy once again underscores the fact that business is built not only on numbers but also on human relationships.”

Still, performance is critical. “Then and today, customers’ biggest concerns are that the work process may be disrupted because the employee does not get in touch for some reason, data security caused by power supply issues, which impacts whether their business would work tomorrow if a conflict escalated,” says Ivanov, noting that healthcare and finance customers have the highest requirements for availability and continuity. But Aimprosoft has been able to maintain its service delivery and retain all of its more than 100 clients.

“We were surprised that the downtime was only for a couple of weeks and since then they have been working without any interruptions,” says Mofidi. “The staff are working as any of our other partners — if not more.”

The global shortage of experienced, high-quality engineering and IT talent has also enabled Ukrainian firms to continue to grow even in the most difficult circumstances.

Ukraine has a long tradition of tech leadership, even in uncertain times. The first computer in continental Europe was built in Kyiv in 1951 during the years of post–World War II reconstruction and closed borders. It was developed in a building that had been restored following significant damage during the city’s liberation in 1943.

The country remains a hotbed of talent in part due to a strong academic tradition that nurtures skills in engineering and software development to the tune of more than 31,000 graduates entering the IT labor market annually. (That total dropped to 27,000 last year as some students were forced to suspend their studies during the full-scale invasion.) Prior to 2022, the Russia-Belarus-Ukraine region accounted for about 5% of the global talent pool, according to Gartner.

The availability of skilled engineers and other professionals in Ukraine led a number of global technology firms to set up software development and R&D centers there, including SAP, Snap, Fiverr, Wix.com, Amazon’s Ring, and Nvidia. Developer platform and services company GitLab started in Ukraine before moving its headquarters to San Francisco.

“Companies want and need this talent,” says Gartner’s Gove. “Businesses lives and dies based on IT. Both providers and private enterprises have been willing to have an increased risk profile because the tradeoffs have been acceptable. It may not be as safe and straightforward as getting talent from Boston, but it’s highly desirable.”

Looking forward

Operating in Ukraine remains challenging, but providers have been able to keep a significant core of Ukrainian talent safe and working while also standing up new delivery options. “Clients continue to seem pleased with the work, and while some are careful of creating too much concentration in Ukraine, they seem comfortable with the new arrangements and willing to continue to support these firms by giving them work,” says Everest Group’s Bendor-Samuel. “It looks to me like the worst is over and the Ukrainian engineering and IT industry is surviving.”

Aimprosoft CEO Ivanov notes that new customers may be less willing to hire specialists in Ukraine than they were a year ago. That’s diminished the country’s previous growth trajectory.

“It’s hard to see Ukraine returning to the same role it played before the war anytime soon. That said, if the war ends soon, it is likely that it will still be a viable destination for the services industry, and over time it may reclaim some of its standing,” says Bendor-Samuel. “However, it has clearly lost momentum, and the establishment of other eastern European centers due to the movement of work will affect the overall picture.”

The global shortage of engineering and IT talent works in Ukraine’s favor. “Given the need for these scarce resources, if Ukraine can rebuild its university programs it will find itself with an attractive export market for services and reestablish itself as a premiere country for delivery centers both with the outsourcing community as well as for global in-house centers,” says Bendor-Samuel.

Gartner forecasts no end in sight for the global talent crunch. “The willingness for companies to take on more risk [to access that talent] isn’t going away,” Gove says. Neither is the good will for Ukraine in the marketplace. “That’s substantial,” Gove says. “It will sustain them and allow them to grow.”

Still, Ivanov prefers to focus on winning the war and beginning reconstruction quickly. Aimprosoft’s employees, forcibly resettled to other parts of the country or abroad, are eager to go home — a sign, Ivanov says, that the IT sector has strong roots. Technology workers donate an average of $270 a month toward the Ukrainian cause, says Ivanov.

“Every day I see how hard and selflessly our employees work, volunteer, and donate. If these people have not abandoned the country now, they are unlikely to do so after the victory.” In addition, Ivanov says, the industry is attracting even more workers with its flexible, remote work model.

“We have been through some of the toughest times. Last year showed that the Ukrainian tech sector is incredibly resilient,” Ivanov says. “The whole world saw that Ukrainians are a nation that adapts quickly to difficult circumstances, and we are an example of that, and so is our business. Modern Ukrainian IT people are successors of their heritage: being hard workers with passion in their hearts.”

For more on how Ukrainian IT professionals and organizations are navigating through conflict, see “Cybersecurity in wartime: how Ukraine’s infosec community is coping.”

Outsourcing, Technology Industry

Aerospace organizations are pushing new boundaries every day. Their products, research, and technologies are changing the way the world works. We see it every day in the way humanity relies on communication, global positioning, and special analytics to enable smart cities, smart cars, and smart factories. It is their ability to systematically innovate, push boundaries, and challenge norms that propels Aerospace every day — it is what excites growing countries and high-value entrepreneurs to invest.

The impact of space technology, on other industries, is wide and vast, and the innovation ripple of research has spurred many high-profile products, including Teflon and CAT scans, as well as many more developments from NASA.

According to Verified Market Research, the Global Satellite Communication Market size was valued at USD 65.68 Billion in 2020 and is projected to reach USD 131.68 Billion by 2028, growing at a CAGR of 9.10% from 2021 to 2028. Its impact on the global economy spans many industries, especially Pharmaceuticals, Beauty and Care products, Semi-Conductors, and Food and Nutrients. Companies are working with aerospace technologies to accelerate innovation and provide new differentiation.

What of the Aerospace companies themselves? How are they researching, developing, managing design, planning, producing, and managing their logistics and operations? They, too, are adopting new digital thread technologies, commercializing data more than ever before. They are focused on cybersecurity and sustainability and delivering on the design cycle faster than ever.

It seems natural that Aerospace companies will be planning a large role in the 2023 Innovation awards. Innovations span industries and the innovation awards are celebrated across the globe.

Let’s take a walk down memory lane to celebrate the innovation leadership of aerospace from around the globe. Then, I will share information about the 2023 SAP Innovation Award program and how companies can get involved.

Aerospace and Defense 2020 SAP Innovation Awards

We celebrated a record number of submissions for the 2020 SAP Innovation Award program. Among them were Kawasaki Heavy Industries, Ltd, which developed a “Smart-K” Digital Innovation of KAIZEN for aerospace manufacturing.

Manufacturing of aerospace and defense systems can be a labor-intensive industry. It is crucial to link engineering, which must maintain tight control of configuration and change, to the shop floor, which requires continuous improvement on a daily basis.

Using SAP S4/HANA Manufacturing for production engineering and operation to establish a consistent digital link between production engineering and production execution ensures both frequent changes and change management control. The accumulated data will also help streamline business processes and improve productivity.

KHI created a new vertically integrated digital platform for production engineering and manufacturing, making it easy to balance strict change management with frequent improvements (i.e. KAIZEN). This competitive advantage collects digital data, reduces flow time, and leads to a more data-driven business.

“The competitive advantage of our production process is that it’s sustainable KAIZEN. We are confident that our ‘Smart-K’ digital innovation of KAIZEN, which includes configuration and change management that are crucial in aircraft manufacturing, will be more strictly controlled and will allow KHI to advance and sustain KAIZEN more effectively,” said Hiroyoshi Shimokawa, Managing Executive Officer President Aerospace Systems Company.

The innovation resulted in over 1 billion manual activities of 4,000 workers being integrated by digitization. There was a 20% increase in productivity for change management by the vertically integrated platform. There was also a 15% reduction in flow time by utilizing actual data and insights from workers.

Covid impacts have created change

As COVID-19 hit, leading manufacturers pivoted to transform their business models, address supply chain disruptions, and manage workforce constraints.

Operations have shifted to focus on business continuity, cybersecurity, and enabling a workforce with digital tools so that they can continue to produce, deliver, and service.

The geographic dependency, regulatory restrictions, and supplier slowdowns forced A&D companies to quickly monitor and respond to sourcing risks while balancing a shift in the demand pattern, these new digitally enabled skills will continue to provide resilience in the future.

A&D companies continue to address new challenges in new ways, there is no better time to share their innovation story with the world.

Share Your Innovation Story

This year’s SAP Innovation Awards aims to honor and celebrate the achievements of forward-thinking companies that have harnessed the power of SAP technology to become an intelligent enterprise; thrive in new business realities; and create positive economic, environmental, and social impact to help the world run better.

SAP is thrilled to showcase these inspirational customer and partner stories that use SAP solutions to differentiate themselves, achieve tremendous results, and adapt to dynamic customer needs.

More information on the award timeline and list of prizes is available here. For details on the judging criteria and category definitions, visit the SAP Innovation Awards website. The submission period is now open, and all entries are due by February 1, 2023. Get started today and join the conversation online using the hashtag #SAPInnovation.

For more innovation stories, follow @SAPIndustries on Twitter and join us on LinkedIn.

Digital Transformation

There’s no doubt that today’s small- and medium-sized business leaders are facing several unprecedented challenges. And building resilience to weather any upcoming storms is essential.

In this first episode of our 5-episode podcast, Essential Connections: The Business Owner’s Guide to Growth During Economic Uncertainty, we welcome Jamie Domenici, Chief Marketing Officer at GoTo. Jamie’s unique expertise in marketing and hands-on experience in small- and mid-sized companies makes her wisdom and best practices especially relevant and meaningful.

“My passion is around small businesses,” she says. “And my whole life honestly, has been associated with small businesses. And now working at larger companies, I really spend a lot of my time and my efforts thinking about how we help small businesses navigate some of those more challenging experiences.”

Navigating today’s turbulence requires a strategy that allows for agility and strength. Jamie’s advice? “Resilience is all about the ability to bounce back,” she says. “I think a resilient strategy is one that allows you to adapt quickly to market changes, view mistakes and failures as learning opportunities, and most importantly, anticipate problems so you can prepare for them in the future.”

Listen in to learn all the details, including Jamie’s actionable insights on how to use marketing and technology for differentiation.

IT Leadership

By Bryan Kirschner, Vice President, Strategy at DataStax

Not too long ago, many CIOs might have had to wrestle with a chief financial officer who viewed enterprise IT as a utility. To use a household metaphor, a CFO might be sorely tempted to save money if budgets were tight by lowering the thermostat on cold days.

Now technology has become such an indispensable tool to drive revenue or remove costs that CIOs are just as likely to be asked to do more in the face of a downturn rather than less.

In one recent large-scale survey, 83% of respondents said their companies were concerned about a recession in 2023 – but 90% indicated IT spending would either increase (51%) or stay the same.

More tellingly, organizations that were more concerned about the effects of a possible recession were more likely to be planning bigger IT spending than those who were less concerned, the report said. “Just 30% of companies with ‘no plans’ to make major preparations for a recession reported that they were getting ready to hike IT spending, in contrast to solid majorities – 68% and 55% – for companies who were already making recession plans or planned to in the near future, respectively,” the survey said.

Some of the drivers are expanding proven use cases, such as personalization. For example: Target’s internal platform that optimizes advertising placements on Target.com to deliver a more personalized guest experience drove more than $1 billion in value in 2021 – which, with continued investment, is expected to  double in a few years.

A bigger slice of a shrinking pie

In-the-moment experiences like personalization are a proven way to drive revenue. The recent State of the Data Race 2022 report found that 71% of respondents could tie revenue growth directly to real-time data.

But technology investments that delight customers can also be a way to win a “bigger slice” when macro trends are “shrinking the pie.” Given rising US interest rates,  “As the size of the mortgage industry shrinks … now is the time to ramp up tech spending to create a better customer experience and gain market share,” according to  Brian Woodring, CIO of Detroit-based Rocket Mortgage.

And robotic process automation (RPA) offers broadly relevant potential to attack rote work and waste. According to one survey, organizations that moved beyond piloting automation achieved an average cost reduction of 32% in their targeted areas.

Multi-dimensional challenges

Any organization can benefit from building a strong cultural focus by taking advantage of best-of-breed technologies and rallying teams to pivot and double down on taking share, bolstering revenue, or protecting margins as the need arises.

But it’s worth pointing out that there’s a broader strategic dimension to this, too. Sometimes “tough operating conditions” aren’t simply a matter of, say, a temporary pullback in consumer spending. Challenges can be multi-dimensional and can have lasting impacts. The COVID-19 pandemic, for example, simultaneously created a shortage of pharmacists while increasing demand for revenue-generating services such as administering vaccines and tests.

Under these radically changed circumstances, executives asked a pointed question: “We looked at our system and said, ‘Why are we filling prescriptions the way we did in 1995?’”

Now a growing network of automated, centralized drug-filling centers (complete with rows of robot arms) sort and bottle pills. According to Walgreens, this cuts pharmacist workloads by at least 25% and will save the company more than $1 billion a year.

Ask yourself these two questions

“When the going gets tough, the tough get coding” looks to be advice enterprises are taking to heart. But it’s also worth considering the distinction between these two questions: “Must we make better use of technology because tough circumstances give us no choice in the matter?” and “Might we do better because we’ve grown accustomed to legacy practices?”

A strong culture of asking the latter question in good times will always set your organization up to have better answers to the former question when tough times force the issue.

Learn more about DataStax here.

About Bryan Kirschner:

Bryan is Vice President, Strategy at DataStax. For more than 20 years he has helped large organizations build and execute strategy when they are seeking new ways forward and a future materially different from their past. He specializes in removing fear, uncertainty, and doubt from strategic decision-making through empirical data and market sensing.

CIO, IT Leadership

By Ashok Rutthan, Chief information security officer at Massmart

Organizations of every size and sector are experiencing a rising tide of ransomware attacks, resulting in the collective global loss of billions of dollars and untold brand damage. Leaders are learning first hand the ways ransomware has become a scourge on smooth operations and financial well-being. Nowhere is this more true than in retail, where ransomware represents a unique set of challenges and risks. For retailers, becoming more resilient in the face of ransomware is paramount.

Why Ransomware Presents Significant Challenges for Retail

In contrast to most industries, retail organizations are multi-site and multi-channel in nature, which means there are many more points of entry for ransomware attacks. Retail operation also embodies an extraordinarily diverse set of endpoints, above and beyond traditional computer endpoints, such as item-level RFID-based packages and pallets, vehicle-mounted computers, handheld scan-based computers, smart shelves, IP cameras and more. It’s a massive surface to protect.

Additionally, retailers are challenged by the fact that many employees using technology devices and services are non-technical staff. In fact, that’s often a retailer’s weakest point—its own user base. Retail employees are there to sell the candy, clothes, or canned food, not be IT or InfoSec specialists. So retailers have the challenge of properly training a large number of full-time, part-time and seasonal staff, to ensure every employee is aware of risks and how to avoid them.

But probably the single biggest factor that makes ransomware a challenge in retailing compared to other industries is retailers’ single-minded focus on our consumer. We are well aware of what happens when a ransomware attack compromises consumers’ identity and other personal, private information. Once we retailers lose a customer for any reason, they’re likely to be gone for a long time. Not only that, but we lose that customer to a direct competitor, making it a double hit. Even if we are fortunate enough to regain customers’ trust, doing so is an expensive re-acquisition effort; it’s well documented that regaining a lost customer costs many times more than acquiring a new one.

Add to all of these considerations a stark fact: Retailing is tied with public education as the industry most targeted by ransomware attacks. According to research from Unit42, the average business downtime caused by a ransomware attack in 2021 is 23 days, and the cost of downtime is estimated at 50 times the initial ransom demand.

How Retailers Can Become More Resilient Against Ransomware

First, it’s essential that retailers practice their responses to an attack; our company continuously does tabletop learning exercises. What you often discover in those exercises is that members of your executive team or board may need to be educated on cybersecurity technology and best practices.

This c-level education is important, but it’s also challenging. There are a thousand things going across executives’ minds at any moment in time—strategy, operations, running the business. When you bring something as technical as cybersecurity to top leaders, they may simply shut down because of everything else on their minds. This is an important communication challenge to overcome. You can do it by speaking the language of business.

Beyond educating your leaders on good cyber hygiene, ensure they understand the impact of a ransomware attack on the business. That understanding helps to drive greater investment— figuratively and literally—because they know the true cost of a breach. One thing that all executives and board members understand is the concept of risk, so I like to lean into that bias by helping them understand their responsibility in the event of an incident. Once they see everything in a familiar risk context, they often instinctively ask, “What can I do to help you?”

It’s also important for leaders in your organization not to fall into a false sense of comfort and think the information security team or the IT organization has it all covered. It’s not. We are there to make sure the organization, employees, business partners and customers are protected. We are there to manage an incident when it occurs, and to do everything we can to spot problems before they pop up. But we cannot do it alone.

Everyone must be appropriately trained to understand ransomware and other cyber threats, and act appropriately. Each employee in the retail organization, from store operations and merchandising to shipping and receiving, must understand that they play a key role in promoting cybersecurity best practices and stopping ransomware from getting inside the walls. This kind of training should be delivered in small snippets and nuggets, short videos and email so you don’t lose the audience. And repetition is key. Everyone needs to know what happens when they take a risky action like clicking on a spam email link, and how to report it when they discover a risk. In the event of a ransomware attack, there are critical decisions to be made, and one of our key jobs as security leaders is to ensure that the C-suite and the board are ready to act.

5 Considerations for Ransomware Defense Strategies

There are five key elements to understanding the impact of a ransomware breach on a retail organization.

What is the downtime that is going to occur throughout the organization at headquarters, in the stores and in the supply chain? If your point-of-sale system is down and you have hundreds or thousands of stores, there’s no way you can go to manual processing. Customers are going to leave the stores, and they may not come back for a long time. When everything takes place on a digital platform, the operational impact of downtime must be calculated before a breach even happens.How long can we withstand the impact of downtime? Revenue will be lost, reputation will be damaged. Also, an attack is going to impact associates’ productivity, but we still have to pay these associates.Lost opportunities with our customers. If you can’t service a customer, they’re going to your competitor. If they get great service there—and when your competitor discovers why the customer has left your store and gone to theirs, they will get great service—you’re going to lose that customer for a long time.What are the bad actors asking for? Is it a nuisance attempt, maybe a small amount (initially)? Or are they asking for a million dollars?  You’ll need to determine what will cost you more in the long run: paying the ransom now, or not paying the ransom?Customer confidence is the key. Simply put, customers who are not confident that you will treat their personal information safely and securely will likely walk away. If you lose a customer’s confidence, you’ve lost the customer.

Retailers should acknowledge and accept that their organizations are highly likely to be confronted with a ransomware attack at some point in the near future. While that doesn’t mean the attack will be successful, it means you have to operate with an understanding that you need to have a plan, you need to practice that plan, you need to train your employees and you have to give your C-suite board all the information they need to make the right decision for the organization.

Read more on ransomware trends in this Unit 42 report.

About Ashok Rutthan:

SRT guest author, Ashok Rutthan, is chief information security officer at Massmart, a major retailer and wholesaler based in South Africa.

Data and Information Security, IT Leadership

Cyber risk is increasingly a top executive priority, due in large part to the rising number of unplanned outages, driven by the increasingly sophisticated cyberattacks and widening skills gap. Consider these facts:

69% of board of directors accelerated their digital business initiatives following COVID-19 disruption[1]73% of organizations are increasing spending for data protection because of ransomware threats[2]40% of board of directors will have a dedicated cybersecurity committee overseen by a qualified board member by 2025[3]

As organizations work to transform, many struggle to ensure security and resilience while balancing the requirements of legacy environments and enabling IT transformation efforts. And the problem can’t be ignored.

What’s the answer to coping with the dynamic nature of risks? Build cyber resilience characteristics into broader IT strategy that includes three principles:

Shift left: Build cyber resilience into digital initiatives, underpinned by cloud and zero trust principlesShift right: Since protection is not enough, establish and improve linkage between security and resiliencyChange approach: Radically streamline approach to security and resiliency leveraging partners to access expertise

To cope with the dynamic nature of risks, organizations need help from partners who can enable their digital transformation journey by supporting legacy infrastructure. Those partners must also build cyber resilience into newer initiatives, underpinned by cloud and zero trust principles.

Kyndryl’s cyber resilience framework and portfolio can help you anticipate, protect against, withstand, and recover from adverse conditions impacting cyber-enabled services across complex hybrid (cloud and legacy) environments.

Kyndryl’s differentiators include deep technical expertise across a broad array of technologies, a portfolio of IP enablers, and a broad ecosystem of partners. In addition, Kyndryl is no longer “biased” toward any vendor, their technologies, or toolsets. We help customers engage with broadest array of technologies in the field, enabling them to reuse existing investments while supporting the new.

Intrigued? Find more about it here.

[1] Gartner, 4 Major Sourcing Trends for a ‘New Normal’ World: Change, Outcomes, Risk and Agility | Published 23 November 2020 – ID G00733227| By Claudio Da Rold, Fabio Di Capua,  Katie Gove, Andy Rowsell-Jones

[2] 451 Research, part of S&P Global Market Intelligence; Source: Voice of the Enterprise: Storage, Data Management and Disaster Recovery 2021

[3] Gartner, Predicts 2021: Cybersecurity Program Management and IT Risk Management Published 8 January 2021 – ID G00735901 | Analyst(s): Sam Olyaei, Katell Thielemann, Richard Addiscott, Khushbu Pratap

Cloud Management

As organizations brace for challenging economic conditions, they will need to be strategic and flexible on where they spend their resources to maintain business resilience. Proactive intelligence and automation tools will be essential as organizations enter “survival mode,” focusing on sustaining growth and efficiency. More importantly, organizations should ensure that even with a limited workforce and tightened budgets, the value and services they deliver to customers aren’t impacted.

However, monitoring and maintaining the myriad of infrastructure and application platforms that support business services is difficult when only using traditional methods. Investing in a solution that automatically and securely collects, aggregates, and analyzes data can enable teams with proactive intelligence to help organizations achieve quick time to value and be more productive.

With proactive intelligence, businesses can get ahead of potential issues and reduce both downtime and time to resolution so teams can focus on key priorities that maintain critical operations. This has a critical impact on businesses: one hour of IT downtime can often exceed one million to over five million dollars for mid-size and enterprise companies according to ITIC’s 2021 Hourly Cost of Downtime Survey. In addition, strategic investments in automation can help teams proactively identify and prevent problems while increasing security, reliability, and productivity. Rather than spending time firefighting, teams can focus on tasks that bring value to the business.

Automated Issue Avoidance

Between the move to the cloud, remote work, and the accelerated adoption of new technologies – IT complexity continues to grow with workforce attention already spread thin. Solutions that enable proactive intelligence services can help reduce pressure on IT teams by helping identify the problematic issues that cause downtime. Through AI/ML, more quickly through automated collection and analysis of product usage data. These capabilities provide a more effective mechanism for identifying potential problems, guiding how to remediate, and ultimately avoiding challenging service requests.

A large part of the support process today is dedicated to identifying the problem and determining its underlying cause. Without proactive support tools, companies are leaving value on the table. Expecting the unexpected in your IT environment means your business is solving problems that are broken – not just symptoms of problems – and avoiding issues before they occur.

Automate Common Workflows with APIs

APIs (Application Programming Interfaces) can be a powerful tool in automating common support workflows. APIs are a highly technical yet important aspect of a business’s underlying IT infrastructure – they are integral to bridging systems and enabling seamless transfer of information and connectivity. APIs enable different systems, applications, and platforms to connect and share data with one another and perform varied types of functions. Without APIs, enterprise tools and their benefits could become siloed – resulting in a reduced bottom line.

As organizations scale their environments, APIs are key to improving the developer experience as they facilitate collaboration and reusability. A better developer experience means better DevSecOps productivity which translates into immediate business value. Creating a software development culture that optimizes the developer experience allows teams to invest less time in internal processes and more time in creating something valuable for their customers. By automating common tasks and eliminating manual intervention, APIs can help organizations foster better developer productivity while significantly reducing costs.

Improved Productivity

The process of identifying a problem, determining its root cause, and troubleshooting can be time-consuming, and requiring the customer administrator to communicate and contextualize information for every support request logged further adds to this time. Proactive intelligence capabilities can help arm customers with holistic visibility into their environment fostering a faster, smarter, and easier way to maintain a healthy and productive environment. Intelligence tools like VMware Skyline can help to empower teams with the insights to solve issues on their own, and enable those organizations to move from reactive, fire-fighting mode to a proactive, predictive, and prescriptive posture.

When enterprises have tools that empower proactive responses and automate issue resolution, teams can increase productivity and dedicate more time to other business priorities. In addition, by improving overall security posture and environmental health, businesses can realize performance improvements to translate to greater operational efficiencies.

Succeeding in today’s business environment requires innovative approaches that lead to greater business operational agility. Break/Fix support is not enough anymore to monitor and support the extensive infrastructures enterprises have today that can span on-premises, remote sites, and the cloud.

Proactive intelligence and machine learning tools allow organizations to embrace an automated approach for troubleshooting, pinpointing root/cause analysis, guiding remediation and when needed an improved support experience that translates to more productivity for teams and better visibility into systems.

To learn more, visit us here.

Build Automation, IT Leadership

A recent North Carolina State University (NCSU) study finds surprising misalignments between supply chain and procurement executives on top business priorities and resiliency. In this article, I take a look at three key findings from that study, and what this misalignment can mean for achieving business objectives.

Key finding #1: Misalignment on priorities

A core finding of the study was that although procurement and supply chain executives were generally aligned, they had differing views on the top priorities for the business. Procurement executives rated “achieving lowest cost” as their No. 1 priority, followed by “on-time delivery” and then “resilience.” Supply chain executives rated “on-time delivery” of supply as their No. 1 priority, followed by cost and then resilience.

As you may have noted, the order of their top two priorities was exactly flipped. Procurement focused on cost and supply chain focused on on-time delivery. Although this may fall in line with our traditional perceptions, in a highly disrupted environment this misalignment on the most essential priorities can cause and magnify problems.

Normally, these slightly divergent visions co-exist decently in the majority of cases. In a normal environment, theoretically, cost and speed can be more easily balanced and important decisions can be weighed and planned ahead of time.

Yet, the reality of today’s fast-paced and disruptive environment is that making judgements in silos – and having competing priorities – can pose nagging problems and be quite costly.

We’ve heard growing concerns about just such problems, for instance, when procurement focuses on low-cost suppliers while not considering the increased transportation costs and risks associated with those suppliers. A specific cost KPI may be maintained, but the larger total costs to the organization due to increased transport costs, reduced resiliency, and business interruption are perhaps not being properly considered.

Today, we are seeing almost every single category of material and commodity at a record high price and every form of transportation also at a record price. And this demands a greater degree of shared alignment to combat the inflationary effects.

Key finding #2: CSCOs standing alone on resilience

Another curious finding of the survey was that resilience ranked as the No. 3 priority for both procurement and supply chain respondents. You would think it would be the No. 1 priority.

According to other studies GEP commissioned since the onset of the pandemic, including those with The Economist Intelligence Unit and Harvard Business Review Analytics Services, resilience is the No. 1 priority of chief supply chain officers (CSCOs) and chief procurement officers (CPOs). Yet, the NCSU study found resilience was not the top priority.

A deeper analysis was conducted to understand why resiliency was not ranked as the No. 1 priority. And when researchers examined priorities from the perspective of different seniority levels within an organization, a surprising schism emerged: CSCOs and CPOs were focused on resilience as their No. 1 priority in the current environment, but mid-level and operational management were hyper-focused on their traditional priorities and measurements. For procurement managers, the central focus is on managing costs in the face of inflation, and for supply chain, it is ensuring delivery of supply amidst shortages.

While CSCOs and CPOs are proclaiming resilience their top priority, mid-level managers are hyper-focused on their day-to-day functional priorities at the expense of prioritizing resilience.

C-level executives have their vision on resiliency, but they may be unaware that their organizations are on auto pilot and continue to operate as usual. It appears mid-level managers are heeding to instinct and struggling ever harder while still sinking in the quicksand or the swamp.

Top executives might think that the people who report to them are in alignment with them, but the reality is that their teams are buried in their immediate challenges.

Key finding #3: You don’t know what you don’t know

Adding even more fuel to the misalignment fire is the fact that supply chain and procurement executives believe they are aligned with each other when that is not the case.

One question in the survey asked executives to rate the relative alignment of procurement and supply chain across a series of priorities — from reducing financial risk to focusing on low-cost suppliers. Although nearly 30% of executives understood they were not aligned across these priorities, between 60-70% of executives, depending on the priority, viewed themselves in alignment with their colleagues.

So, to recap, the NCSU study clearly shows that there is misalignment between procurement and supply chain – and there is a schism between CSCOs and mid-level management. However, the majority of executives are not even aware that such a problem exists.

It’s the old “you don’t know what you don’t know” problem. A problem of misperception.

Such misperceptions can give executives a false sense of security – and be the hidden cause of underlying future disruption in the supply chain.

Operationalizing resilience

The NCSU report warns that this misalignment and misperception can derail progress in achieving greater resilience and meeting business objectives. The current disruptive environment only magnifies the problems.

We recommend taking the following actions to achieve your strategic vision and operationalize resiliency:

Define resilience and clearly communicate about shared objectivesOperationalize resilience through systems and processesFocus on enabling key capabilities, particularly shared data, visibility, and technology

The essential starting point is for organizations to align on their vision, prioritization, and definition of resilience, and then operationalizing or integrating it.

Operationalizing resiliency requires alignment of procurement and supply chain operations to address key pain points and weaknesses in the supply chain.

First in line in terms of priorities for improving processes is closing the gaps in the supply chain: gaps in process, information flow, and technology, which predictably result in a drag on the supply chain’s productivity and optimization and present openings for errors and increased risk.

Up to 59% of surveyed executives rated the procurement and supply chain gap as a “major issue.” This was rated as the No. 1 gap in the supply chain, according to the survey.

In this increasingly complex and disruptive environment, I believe that “convergence” – the uniting of critical processes, information flows, and technologies across the supply chain and the ecosystem – is the key to operationalizing resilience and closing the gaps.

You can delve further into these topics by downloading and reading the full NCSU report, Supply Chain Convergence in a Disruptive Environment.

Turn ideas into action. Talk to GEP.

GEP helps enterprise procurement and supply chain teams at hundreds of Fortune 500 and Global 2000 companies rapidly achieve more efficient, more effective operations, with greater reach, improved performance, and increased impact. To learn more about how we can help you, contact us today.

IT Leadership

CIOs of large enterprises have pain points that are complex, underscoring the need for suppliers to listen intently and understand their predicaments. The challenges of managing data, the lifeblood of any enterprise, are continuously evolving and require attention because ignoring them only makes the “pain points” worse.

CIOs and their teams look to the tech industry to solve their problems, develop new, cost-effective technology solutions, and make implementation of new solutions smooth and easy, with built-in flexibility. This article explores three examples of how listening to the concerns, and changing the requirements and needs of CIOs, has resulted in viable technological solutions that are now widely in demand.

The need to improve cybersecurity by increasing cyber resilienceThe need for the lowest latency, while delivering the highest real-world application performanceThe need to incorporate AI operations (AIOps) and development operations (DevOps) as part of a modern IT strategy

As the chief marketing officer of Infinidat, I continually hear customer input and feedback, which feed into a strong cycle of continuous improvement. Product strategy must align with not only today’s needs but the anticipated, evolving needs of the future. A new product must help address or eliminate one or more pain points. Otherwise, what is its value?  This is the story of Infinidat’s comprehensive enterprise product platforms of data storage and cyber-resilient solutions, including the recently launched InfiniBox™ SSA II as well as InfiniGuard®, taking on and knocking down three pain points that are meaningful for a broad swath of enterprises.     

The need to improve cybersecurity by increasing cyber resilience

Cyber resilience is among the most important and highly demanded requirements of enterprises today to ensure exceptional cybersecurity and combat cyberattacks across the entire storage estate and data infrastructure. In comprehensive surveys by Fortune and KPMG in the last 12 months, cybersecurity has been cited as the No. 1 concern of CEOs. The continuous attempts at comprehensive theft and hostage-taking of valuable corporate data can be overwhelming. 

This naturally puts immense pressure on CIOs and CISOs to deal with the rapidly expanding threat landscape – and it’s much more than securing network connections. It now extends to the people at their desks or at the edges of the company network, creating weak points. Industry data confirms the average dwell time for an enterprise-level cyberattack is up to 287 days. The C-suite is rightly concerned about this shroud of secrecy and how eerily “patient” cyber criminals are, taking systematic approaches and looking for the tiniest of cracks to exploit. 

Cyber resilience must be part of an enterprise’s overall corporate cybersecurity strategy. One example of cyber resilience is the ability to recover known good copies of the enterprise’s data. When you’re able to do it – and do it quickly – then the leverage that the cyber attackers thought they had is dramatically reduced, if not completely eliminated. To have end-to-end resilience, an enterprise needs to build it into primary storage for the most critical apps and workloads, as well as secondary storage to protect backup copies of data. 

Infinidat added cyber resilience on its InfiniGuard® secondary storage system during the past year and, at the end of April 2022, across its primary storage platforms with the InfiniSafe Reference Architecture, encompassing Infinidat’s complete portfolio. InfiniSafe combines immutable snapshots of data, logical air gapping, a fenced forensic environment, and virtually instantaneous data recovery, and is now extended into the InfiniBox SSA II, as well as the entire InfiniBox family. 

“With the InfiniSafe Cyber Resiliency Technology extending into the InfiniBox portfolio, we’re able to provide our customers the peace of mind they need in a time filled with cyberattacks and data breaches,” said Trent Widtfeldt, Chief of Engineering, Technologent, a female-owned global IT solutions provider. “Technologent is known for partnering with the best technology vendors to ensure we bring the most efficient solutions to our customers, and Infinidat has always been a key partner in this area.”

The need for the lowest latency while delivering the highest application performance

CIOs and storage administrators have asked whether a performance void in enterprise data infrastructure could be filled – a void that no storage vendor had been able to meet to their satisfaction. It is the ability to provide consistent, ultra-low latency, super-fast response times for virtually every I/O that they process, not just great latency for an overall average of their I/Os. If this could be delivered, they said, it would provide them with valuable competitive differentiation for their real-world applications and workloads.

Although CIOs already know, for the most part, that most storage vendors can meet or exceed their requirements for bandwidth and IOPs, what they are really pointing to is the “new” storage performance battleground, which is latency. They articulate to anyone who will listen, and in a position to make it happen, how they want consistent ultra-low latency.

To address this customer demand, Infinidat developed the InfiniBox SSA II, delivering unprecedented latency. Enterprises have seen real-world workloads hit performance as fast as only 35 microseconds for storage performance. This is not an artificial “hero” number that no real application has ever seen, but an observed performance from real, live, customer applications. This enhancement allows customers to not only have optimal application and workload performance, but also allows for substantial storage consolidation, dramatically transforming storage performance, increasing efficiency, and reducing total cost. 

“Infinidat is squarely targeting this market segment with its InfiniBox SSA, and the vendor’s updated capabilities, including in particular the ability to deliver latencies as low as 35 microseconds and the InfiniBox SSA II’s new InfiniSafe cyber resilience support, make it an excellent fit for tier 0 workloads in the enterprise,” said Eric Burgener, Research Vice President, Infrastructure Systems, Platforms and Technologies Group, IDC.

The need to incorporate AIOps and DevOps as part of a modern IT strategy

CIOs have conveyed a common reality that they are under pressure to deliver nonstop operations within budget constraints, limited headcount, and short-term deadlines. A strategy to manage such converging forces cannot be cookie-cutter. Each enterprise has its own unique operating requirements. The challenge is for the IT team to deliver new capabilities that are tightly aligned with the organization’s specific needs – and to do it rapidly and with low risk. 

A smart move for CIOs, and other IT executives, is to exploit the underlying capabilities of the installed infrastructure. This has led IT leaders to demand that their infrastructures have the highest levels of autonomous automation and intelligence, along with proven extensions to enable further operational integration. This integration includes both interoperability with incumbent IT consoles as well as simple, trusted access to unique functionality and the creation of new capabilities. Additionally, it is critical that outdated fly-by-wire management controls are replaced with infrastructure intelligence, automation, and proven solutions.

Earlier this year, Infinidat introduced InfiniOps™, a collection of extensive software capabilities that exploit world-class AIOps functionality and expedite DevOps activities. By harnessing the unique operational awareness of InfiniVerse, IT teams have streamlined storage oversight and management to unprecedented levels of set-it-and-forget-it simplicity at their local site and across the globe. Infinidat also works closely with data center AIOps vendors, such as ServiceNow and VMware, so that Infinidat’s storage platforms are integrated into their cross-data center AIOps toolsets. Additionally, a proven set of IT tools are available to further integrate InfiniBox capabilities into IT operations for standard and container application deployment environments – at no additional cost.

IT must build upon a foundation of the highest performing, most available, and most intelligent infrastructure. InfiniBox delivers on these requirements with 100% availability, microsecond latency, multi-petabyte scale, and its Neural Cache.

Newly introduced InfiniOps technologies include InfiniVerse, a solution that delivers application to storage insights as a secure, cloud-based service. IT staff can see their entire storage infrastructure across multiple sites, including key indicators such as system health, rate of capacity consumption, and SAN/WAN performance compared to internal latency measurements. InfiniOps also offers a wide variety of tools to streamline IT operations, accelerate solution deployment, and reduce internal solution development risks.

Our customers are looking for enterprise storage solutions that deliver the utmost in availability, reliability, and performance. With the InfiniBox SSA II, Infinidat has done that and more. The InfiniBox SSA II has added sophisticated AIOps technology and comprehensive cyber resilience to the solution. At the same time, the InfiniBox SSA II continued Infinidat’s powerful “set-it-and-forget-it” ease-of-use architecture. 

All of this provides our customers with a highly differentiated enterprise storage platform that provides not only strong technical values, but critical business value as well.

For more information, visit Infinidat here

Security