Where is technology headed in 2024?

Where is technology headed in 2024?

Where is technology headed in 2024?

  • 3 months ago
  • postat de: NSHOST

A panel of expert technology leaders from McKinsey take a look at what 2024 may hold and offer some tech resolutions to consider for the new year.

Looking ahead is always a delicate matter. While the start of the year is an opportunity to review your strategy and plan where to focus your energies, it can be difficult to separate real trends from advertising. This is especially true when it comes to technology. Think back to this time last year and the excitement surrounding NFTs, cryptography, and the metaverse, which until recently was more of a dream than a reality.

2024 will probably be a more sober year in technology. Geopolitical and economic uncertainties inject more caution into the next phase of technology evolution. Leaders will need to look for ways to do more with less, find value where innovations overlap, and invest strategically in technologies that reach an inflection point.

Pay attention to combinatorial trends.

In 2023, we identified 14 technology trends that have the potential to change the way we work and live. These include space technologies, clean technologies, artificial intelligence and immersive reality technologies. For executives in 2024, the challenge will not just be to bet on individual trends or increase the pool of software engineering talent, but to think about how all these technologies can create new possibilities when used together - what we we call combinatorial tendencies.

In many areas, from consumer to enterprise, across all sectors, combinatory trends are creating exciting new possibilities. Because of the vast range of possible combinations, creativity in "mixing ingredients" becomes the key to success. Consider the technologies in a new electric car: cloud computing and edge computing that power the networks that connect cars, applied artificial intelligence and ML that enable autonomous decision-making and driving logic; clean energy and sustainable consumption technologies that form the core of vehicle electrificationthrough,among others, new lightweight composite materials and advances in battery capacity; state-of-the-art software technologies enable faster development of customer-facing features and reduce time-to-market, while trusted architectures ensure secure data exchange. Together, these technologies combine autonomy, connectivity, intelligence and electrification to enable a new future of land mobility.

Similarly, new treatments at the patient level, such as treatments based on blood type or cell targeting, are fueled by advances in bioengineering (e.g., new therapies based on tissue engineering), immersive reality technologies (e.g., therapies remote), web3 (e.g. traceability, interoperability and permanence of EHR records), artificial intelligence and applied ML (e.g. enhanced image processing, predictive health alerts), as well as cloud and edge computing (e.g. access increased data and processing capabilities). The impact isn't simply additive—it's multiplicative.

In 2024, we expect some of these combinatorial approaches to begin to scale. This could include the approach that led to mRNA vaccines—a combination of bioengineering technologies such as genomics, applied AI, and the industrialization of machine learning—being applied to other diseases. We are also seeing signs that the combination of advanced mobility, advanced connectivity and applied AI will be applied to less sexy but economical critical logistics problems as a way to build supply chain flexibility and resilience. When considering how you plan to invest in technologies over the next year, try to think holistically and consider how they work together to unlock new opportunities.

Prepare management teams for critical technologies.

Game-changing technologies such as 5G, artificial intelligence and the cloud are reaching tipping points for mass adoption. Research shows, for example, that enterprises want to move about 60% of their IT assets to the cloud by 2025. And more than 50% of companies say they have adopted AI in at least one function of their business. While boards may be concerned about flat or underinvestment in IT budgets, they need to focus their energies on the risks and opportunities in this big change.

To do this, the board must prioritize the budget to modernize IT foundations that enable speed, security, resilience and reusability. These aren't the sexiest of investments, but automating processes, investing in databases, clearing tech debt, and continually renewing IT architecture are necessary for the business to have a chance to take full advantage of the new technologies coming online.

The board is better positioned than anyone else to support this approach. IT priorities are too often influenced by individual business units or divisions. Investments in technology foundations - "IT for IT" - benefit the entire business, so they require the board, in collaboration with senior management, to guide and direct the effort. A good rule of thumb is that 15-20% of your IT change budget should be allocated to this core activity.

Leaders cannot assume that the board will arrive at this vision on its own. For the board to engage at this level, the CIO and CTO will need to have more ongoing and frequent dialogues with individual board members about technology priorities and needs.

Free up the time of the engineers you already have for manual work. 

Layoffs in the technology sector and belt-tightening measures in most businesses mean that the technology leaders of 2024 will have to master the art of doing more with less.

The trap will be asking the tech people to simply do more. Instead, try to get them to do less - less administrative work, less bureaucratic work, less manual work. We've found that in many large organizations, engineers spend only 50% of their time on actual development. Imagine if you could improve this by just 10 percentage points for a large company that has thousands of engineers. There are huge amounts of productivity that can be harnessed.

CIOs can capture it by being more scientific and methodical in developing and applying engineering. Specifically, there are a few steps I can take:

  •  Pay more attention to the composition of the team and find out who are the best performers. Individual engineer performances can vary by a factor of 2-3 between teams.
  •  Analyze how many distractions you can remove from your engineers' tasks. Even relatively simple solutions, such as reducing the number of meetings or turning "agile ceremonies" into something more productive, can free up substantial time.
  • Finally, go all the way with automation to eliminate the scourge of manual tasks that burden engineers. Automating testing or compliance can have a huge impact in freeing up engineers to do what they love.

This is not only a productivity issue, but also a talent issue. If you want your company to become a destination for top engineers, you need to create a work environment where engineers can do what they love.

Pick upyour head in the clouds :) 

In the past year, many CEOs have changed their view of cloud computing from "I'll do it because my CIO recommends it" to "I want to be all in."

Right now, companies have an unmissable opportunity to accelerate their cloud ambitions: As tech companies cut headcount and eliminate programs, top talent—not just top 20 percent performers— enter the job market, Although many of them are taken quickly, companies should think about how to act quickly when cloud talent becomes available so that they can take a big step forward in their cloud capabilities.

The big question, then, is how companies will exploit these two trends. Most corporate forays into the cloud have been limited to simply moving applications off their own servers (often referred to as "lift and shift") or building test and development environments to try out new programs. But now is the time to think bigger and smarter.

In 2024, companies should have strong cloud foundations that enable them to take advantage of the most important benefits that the cloud offers (for example, scaling applications or automatically adding capacity to meet increases in demand) . This means developing the right application models (codebases to be applied to multiple applications or use cases). It also requires the implementation of robust cloud economy capabilities, called FinOps. Recent McKinsey research has shown that companies tend not to really focus on cloud costs until they exceed $100 million, which is not only a huge waste, but also a wasted opportunity to generate value. FinOps capabilities can monitor and track spend, determine unit economics for various cloud usage scenarios, and translate enterprise consumption needs into optimal cloud offerings and pricing agreements.

The cloud is changing security.

For years, security has been treated as an obstacle—albeit a critical one—that has slowed progress to ensure that security protocols are in place. In 2023, however, this began to change profoundly, driven by the big commitments companies made in moving to the cloud. This shift has created a useful forcing mechanism for CIOs and CISOs to rethink the role of security, particularly how to improve the risk posture of the business.

This trend will accelerate in the coming year for several important reasons.

First, companies are seizing the opportunity to automate security as they migrate applications to the cloud. This is because both enterprises themselves and cloud service providers are upping their own security game. Vendors have invested billions of dollars in new security tools in particular, for example to automatically scan code uploaded by developers for cybersecurity issues and to reject code with vulnerabilities by providing clear recommendations on what fixes to make when i do. Most security issues are the result of code and system misconfigurations, which means automation will dramatically reduce the number of security breaches. (At one large bank, for example, breaches dropped by 70-80% after implementing security automation). There is another benefit: this automated feedback system allows developers to increase the development pace by up to 10x and is a much better experience for developers.

Second, as heavily regulated industries like banking and pharmaceuticals move to the cloud, regulators themselves are rethinking pressure points. They are already becoming more prescriptive about cloud security and compliance standards and are thinking about other issues such as the risk of significant concentration. What if one of the big CSPs collapses and 30 banks collapse with it? While there are likely to be no real answers to these questions even in 2024, we can expect to see the contours of a new policy begin to emerge.

Decentralized artificial intelligence is a game changer.

The past few years have brought huge strides in AI "decentralization" – the trend of expanding access to advanced AI technologies that were traditionally only available to players who had access to massive, centralized, proprietary datasets. Products like Stable Diffusion and ChatGPT have enabled a wider set of enterprises, as well as individuals, to access and interact with deep learning models that would otherwise have been limited to institutions with very large datasets. The implications are enormous, from improving search to increasing developer productivity.

Our analysis via QuantumBlack, AI by McKinsey, indicates that in the coming years we expect to see the first signs of how this decentralization can disrupt various sectors, perhaps starting with the fields of entertainment, gaming and media, where traditionally , we've seen new technologies make early inroads.

The big challenge and opportunity for companies in 2024 will be to take advantage of these decentralized AI capabilities - and what this technology could mean for their business models. For CIOs or CTOs, the focus will need to be on how they will rework their architectures to easily incorporate application programming interfaces (APIs) (eg from OpenAI, Stability.AI) to incorporate "intelligence" in a wider range of applications and processes. This capability can, for example, provide automatic code suggestions or code libraries to pull from or automatically generate code to jump-start development. The goal should be to have AI-based intelligence built into every part of the technology stack. Allowing this means allocating enough resources to experiment—top innovators allocate 1 to 5 percent of their revenue to innovations that could bring disproportionate returns. Protecting this budget will be especially important as businesses feel the squeeze on budgets, as the ability to innovate effectively during downturns allows companies to position themselves to grow quickly when the economy recovers.

The signals on the horizon for 2024 are difficult to analyze or understand. In this sense, they resemble previous efforts to look ahead. But what is clear is that how companies handle their technology questions in the new year will have a profound effect on how good their outlook will be as we head into the next new year.

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