The IMF has warned that half of the European Union and a third of the world face recession in 2023. This means that economic headwinds such as energy costs and currency fluctuations are forcing organisations to reassess budget decisions.

In our recent Future Enterprise Resilience and Spending Survey (December 2022), IT leaders said they expect inflation to impact spending decisions. IT cost price increases stemming from inflation and currency changes is expected to have the greatest impact on IT spending plans in 2023.

C-suite concerns are related to IT and technology challenges. In our Worldwide C-Suite Tech Survey (August 2022), 60% of European C-suite concerns about the impact on their IT and digital spending was related to challenges coming into sharper focus as macroeconomic conditions worsen. This includes IT price increases stemming from inflation.

So how can tech vendors navigate these issues and thrive?

Planning Is the Foundation for Success

According to research by the Harvard Business Review, companies that not only survived recessions but thrived afterwards were those that were prepared and agile — those that didn’t just slash costs but invested strategically.

Strategy is essential to know where to plan resources, to determine which projects you are going to prioritise and which you are not, and to know how you are going to identify and target the opportunities that will give you the best return.

Download eBook: Essential Building Blocks for an Effective Growth Strategy

A good strategy should help you align with business conditions, so that you can be agile enough to deliver short-term savings without impacting long-term growth.

Informed Decisions

Data becomes more important in volatile and uncertain economic situations. Economic conditions can impact regions and industries differently. Knowing the factors that might impact the market(s) you are selling into is crucial.

Those who are buying tech is changing, with European tech spending moving from the IT department to the C-suite. In Europe, 47% of IT spending is now C-suite funded (source: IDC Worldwide IT Spending Guide: Line-of-Business Forecast, January 2023, European forecast).

Download eBook: Speaking the Language of the C-Suite: Selling Beyond the IT Department

This is an example of how data can give you insight into your customers and how they are buying. Knowing who is buying, where they are spending and what is impacting spending decisions will help you build an effective strategy.

Data-supported decisions are key to effective resource management both internally and externally.

This means you need to know who is buying in your market. Which markets or industries are more resilient? What are their drivers and challenges?

Adapt and Invest

Times of economic uncertainty can also be a time of possibility. Microsoft, Instagram and Airbnb, for example, were all formed during or just after a recession.

Technology is an area where businesses tend to continue or increase spend. 66% of European C-suites believe that IT budgets will increase, even during an economic downturn (source: IDC Worldwide C-Suite Tech Survey, August 2022).

According to our Digital Executive Sentiment Survey (October 2022), European organisations now expect more than 50% of their revenues to come from digital business models on average in the next three years.

Technology is often seen as a critical business differentiator to better deliver business outcomes, increase resilience and accelerate revenue growth. So while caution may continue while the economic outlook is uncertain, investments in projects that improve efficiencies are continuing. According to the Harvard Business Review, prioritising digital transformation and digital technology can help cut costs and improve efficiencies.

In an economic downturn it can be harder to achieve growth, as you have to do more with less. It can also be harder to get customers to spend, so you must ensure that you are targeting the opportunities with the best chance of success.

But there are opportunities. So what you do and where you allocate resources becomes increasingly important.

You need results. To be proactive rather reactive, but still agile enough to pivot to changing market conditions. An effective strategy is essential to that.

Visit our website for more information on how we can help you build for growth.

Not Going Back to the Office Full Time

If you bring together a group of senior managers and ask them what the most pressing concern is in their workplace strategy, the most likely answer will be, “How can we get our workforce back into the office?” Nostalgia about the “good old days” reassures them that work is better done in the office. A buzzing office at full capacity is often taken as a sign of high performance.

Our data shows that 68% of European employers are determined to have employees back full time in the office (IDC FoW Survey, 2022). Meanwhile, workers are demanding greater flexibility and a choice of where and how to work.

Some employees want to be in the office, while many want to “balance their lives” and family obligations. Our data shows that compared with hybrid staff, employees working onsite five days a week are 10% less likely to recommend their employer, meaning they are less loyal and more likely to switch jobs.

About 73% of office workers in Future Forum’s future-of-work study say they are open to new jobs if they are dissatisfied with the level of flexibility they are offered.

In the wake of a recession in Europe, however, many businesses are reluctant to invest in the technologies needed to transform their organisation into a digital-first workplace for the long term.

Our survey data from December 2022 shows that concerns around geopolitical tensions and labour shortages remain high in Europe, with inflation having the biggest impact on spending plans for 2023. 70% of organisations are planning to significantly reduce their IT spend in 2023 (IDC FERS Survey, Wave 11, 2022).

Many managers need to seriously consider whether a return to a traditional work policy will enable their business to survive in today’s world. A typical organisation has two generations of digital natives in their workforce (Millennials and Gen Z). Employees are key stakeholders in the evolution of their workplace, and their interests and preferences must be considered. Organisational culture needs to evolve and keep pace with social changes. The alternative, in form of a non-negotiable “everyone return to the office” strategy, would cause more harm than good in terms of business outcomes such as talent attrition, quiet quitters and lower productivity.

The Digital HQ and Why It’s a Must-Have

So, what is the way forward? A digital HQ that is accessible to all — those in the office and those working away from the office — can be the foundation for a more flexible work environment that drives performance, loyalty and other positive business outcomes.

Platform vendor Slack defines the digital HQ as “a single, virtual space to connect people, tools, customers and partners for faster and more flexible work”. Contrary to most assumptions, a digital HQ does not imply that people never meet in person.

Yes, the workplace is digital by default, but people will still get together in their office. However, they do so for team building and collaboration, social connection and networking, or training.

The understanding is that going to the office to replicate an at-home work pattern that focuses on productivity would be a waste of time. As a result, the office — or “physical headquarters” — is being reimagined less as a place of routine and obligation and more of a centre for driving company culture and values.

These new offices emphasise free-form flexibility, offering hot desks, huddle rooms and smart meeting rooms. However, too few companies have given thought to the workings and architecture of digital headquarters. And given that so many workflows and team collaboration efforts now happen in the digital space, that seems like a serious lack of imagination and an invitation to failure.

To ride the wave in a challenging labour market, companies must prioritise attracting talent and keeping existing employees motivated. By enabling employees to connect and collaborate from anywhere, a digital HQ helps companies to provide the flexibility that today’s workforce demands.

All workers can feel included and productive in a digital HQ, no matter where they live or what their daily schedules might look like. Flexible work practices are also essential to building inclusive workplaces, which is top of mind for many employers as diversity, equity and inclusion have become a priority in recent years.

A digital HQ can break down silos, unite teams in an asynchronous work model and boost security. Employee and customer experience will benefit from that increased agility and create a stronger culture as a result. The fact that 56% of European companies feel they are not ready to meet current and future work transformation requirements should be a wake-up call for those trying to survive the coming storms of disruption.

Meike Escherich - Associate Research Director, European Future of Work - IDC

Meike Escherich is an associate research director with IDC's European Future of Work practice, based in the UK. In this role, she provides coverage of key technology trends across the Future of Work, specializing in how to enable and foster teamwork in a flexible work environment. Her research looks at how technologies influence workers' skills and behaviors, organizational culture, worker experience and how the workspace itself is enabling the future enterprise.

The Future of Work is going through a tumultuous time. In a response to tough market conditions, business leaders across industries, including high profile CEOs, are mandating a return to the office. The reason is no more than a desire among managers to boost employee performance by having tighter control over their reports.

Moreover, recent mass layoffs, which are essentially no more than a sugar rush for shareholders, can also be interpreted as a shift in power from employees back to employers. The latter are now in charge, dictating how work gets done for the sake of financial performance.

Will this last? Can we assume that the past few years of progress in the Future of Work have been erased from history?

Are You Ready for the “Era of Disruption”

Returning to a pre-pandemic workplace is not viable. A company with top-down decision making will find it difficult to adapt to a fast-changing environment.

Employees will not give the best of themselves if their voice is not heard, or if they feel disrespected or undervalued. Many will retire early, quiet quitting or even joining the large contingent of gig workers, simply because they feel “they don’t belong”.

The pandemic taught us something profound that goes beyond “where” work happens. It is the realisation that work is a projection of ourselves, our life goals and aspirations, and a means of fulfilment.

Meaningful Work

Brad Bird, the movie director, once said, “Money is just fuel for the rocket. What I really want to do is go somewhere.” This sentence, which reflects the mindset of many people at work today, can be summarised in one single word: Purpose.

With Millennials and Gen Z making up roughly half of the current workforce, and soon becoming our future leaders and CEOs, it is reasonable to expect “corporate purpose” to change business as we know it today. Younger generations want to work for companies with impact, beyond shareholder value.

Purpose is the secret sauce for high performance

Therefore, it’s not “where” work happens but “why” work happens — i.e., the purpose of work that unlocks employee energy. In an era of disruption, when work has direction and is transformed into purpose it is powerful and energising.

Let’s think about a sailing racing yacht, and the teamwork involved to pursue a common goal, a North Star. In a racing yacht, the following applies:

  • The interest of the team is always above individual interest
  • There is just “one collective head” — they must think and act together
  • Every crew member has a critical role to play for the victory, from the leading role of a helmsman to the agile role of trimmers, tuning the sails to ensure maximum thrust.

 

How does the above apply to your firm? Are your people “energised” to collectively pursue your North Star? Do they feel their roles and responsibilities make an impact?

This is the secret sauce of high-performance organisations: by nurturing their core, business leaders can drive employee performance and team cohesion.

Sustainable companies do business and make profit by placing the welfare of their people, society and the environment as their core purpose. As such, unfair pay, work inequalities, “command and control” management styles and the social disconnect affecting many organisations today is foreign to them.

Companies with a sustainable purpose enjoy a more mature social contract between employer and employees. Thus, the choice of hybrid or full time in the office is actually irrelevant. What matters is that decisions are not top down but in partnership with employees.

Technology Is the Enabler

In a digital world, pursuing the North Star is far more effective (and enjoyable) when employees are given the right technology. Here are some suggestions:

  • Devices that are sustainable by design and appropriate for different workstyles
  • Digital Workspace solutions for productivity, inclusive collaboration and connection to purpose.
  • Workflow automation to free up employee time for more human work
  • Online training platforms to continuously elevate employee skills throughout their careers
  • Intelligent IT support for employee experience and productivity
  • Identity management for digital trust
  • Zero Trust security solutions for a perimeter-less workplace

In summary, placing purpose at the core of your business is most effective for employee performance and social cohesion. Numerous third-party studies show that purpose-led organisations outperform their peers.

If you would like to learn more about this and how technology enables a purpose-led organisation, join us at our IDC Future of Work Conference.

Digital technology is reshaping business models, revenue streams and operations management. At the same time, the rising number of start-ups, scale-ups and unicorns in Europe — the digital-native businesses — is helping to boost digital transformation (DX) initiatives in traditional organisations.

What Is a Digital-Native Business?

Digital-native businesses (DNBs) are highly dependent on a digital infrastructure and are built from the start around modern technologies, from cloud-native applications to artificial intelligence, with data across all aspects, from operations to business models and customer engagement. By adopting new and emerging technologies, and using platform services and marketplaces, DNBs can quickly grow and scale up their business, creating new markets and disrupting traditional business models across industries.

DNBs are also defined by their market valuation — start-ups are valued at less than $250 million, scale-ups are valued from $250 million to $999 million and mature digital natives are valued at $1 billion or more. They can also be either technology-orientated companies (e.g., innovative ISVs/SaaS providers, selling technology products, software or IT services to other businesses) or technology-driven B2B or B2C companies (offering tech-enabled products or services respectively to business or consumers).

What Impact do DNBs have on Traditional Enterprises?

DNBs are disrupting some industries more than others. Fintech companies such as Revolut in the UK and digital banks such as N26 in Germany have pushed digital innovation in the past few years into a very traditional sector, whereas Sweden-based Spotify has completely reshaped the music industry at a global level.

DNBs’ influence also extends to the way traditional companies adopt and use technology. DNBs’ tech operations are often cloud native and data driven, with a customer-centric focus, employing tech-savvy developers and data scientist teams in agile environments to grow and scale the business quickly.

Market disruption and the growing interaction with DNBs are driving traditional European organisations to adopt some of the DNBs’ distinguishing digital features, such as shifting towards a digital-first organisational approach across the enterprise. According to IDC’s What Is the Impact of Digital-Native Businesses on Traditional Enterprises? — based on IDC’s 2022 European Industry Acceleration Survey — these impacts include:

  • Increased innovation: 35% of businesses with more than 1,000 employees cited this. Healthcare (37%), government/education (34%) and transport (34%) are the most impacted industries. Healthtech, edtech and the shared economy are the fastest-growing segments in the DNB arena.
  • Adoption of new working models: The implementation of agile, remote and hybrid ways of working pushed by the interaction with DNBs is most common in very large enterprises, government, education, and retail and wholesale industries. These extensively adopted remote working during the pandemic, and are now taking inspiration from DNBs to permanently adopt new and flexible working models.
  • Higher proportion of digital personnel: Finance respondents have increased the share of employees with digital skills (38%), and have a greater focus on customers and CX (31%), a trend influenced by the interrelationship with the fintech ecosystem. On a broader level, medium, large and very large organisations also say DNBs have had a major impact on organisational changes at the C-suite level.

Why Is it Important to Monitor the Relationship Between Digital Natives and Traditional Businesses?

IDC’s European Industry Acceleration Survey highlights growing coopetition between DNBs and traditional organisations. This is leading to a more innovative and digital-first organisational approach for the latter, such as a tighter focus on digital revenues, across all size categories, and greater competitive pressure in their respective markets, which may enable them to enter M&As or investment activities with DNBs.

This last trend is more prominent for utilities and oil/gas respondents, an industry where customer-orientated digital natives have pushed traditional companies towards improving their CX, also by acquiring entirely digital organisations in the process and with new market segments (such as renewables) being led by digital-native businesses.

Tech providers should target European DNBs, as this is a competitive, fast-growing segment populated by lean, agile and tech-enabled organisations. DNBs are built around modern technologies and digital infrastructure, and need to enter strategic partnerships with external stakeholders to meet their need for innovation. Tech providers are the first option for European DNBs, according to preliminary results from IDC’s Global Digital-Native Business Study.

Tech providers should also look to DNBs as precursors of the changes and trends that will affect traditional industries. Changes range from greater adoption of cloud services (cited especially by telecommunications and media, finance, and professional services respondents) to the adoption of a data-driven approach to business outcomes (cited by 19% of very large enterprises and 25% of retail/wholesale respondents). What DNBs need today will be what traditional businesses need tomorrow.

The relationship between DNBs and traditional organisations could span from tech supplier to potential acquisition target. This could change based on their business model, giving birth to interconnected ecosystems. For these reasons, in cultivating a long-term relationship with digital natives, tech vendors can also improve their positioning in traditional enterprises as trusted partners in their DX journeys.

To find out more about digital-native businesses in Europe, please contact Martina Longo.

Martina Longo - Research Manager, Digital Business - IDC

Martina Longo is a research manager in the IDC Digital Business Research Group. In her role she advises ICT players on how European organizations create business value using digital technologies. She also leads IDC European Digital Native Business research, focused on those enterprises born in a modern technological world in a mix of start-ups, scaleups, and more mature digital natives. Within the European Digital Business Research, the European Digital Native Business, Start-ups and Scale-ups theme advises technology suppliers on the market dynamics and segmentation, business priorities, tech buying patterns and go to market approaches (sell to/sell with) needed to engage digital native organizations in Europe.

European organizations expressed their concerns and the impact the believe they will face from Regulations in the coming years of 2023 and 2024, when asked about it in the European Enterprise Acceleration Survey (n=1500). The survey was conducted in late 2022 and we found that the top three priorities for European organizations are in the domains of Cybersecurity, Data Governance and Sustainability.

However, the perception or Regulatory impact varies within European regions, as the political and economic differences reflect in organizations’ regulatory focus for the coming years.

For instance, Western Europe and Central Eastern Europe bear significant differences as the organizations from Western Europe are more concerned about Sustainability Regulations and Safety of products (quality). Meanwhile, organizations from Central Eastern Europe see a higher impact coming from Cybersecurity and Privacy regulations.

Central Eastern Europe

Given the geopolitical context with the war on Ukraine, countries like Czech Republic, Poland and Romania have the highest concern about Cybersecurity Regulations. Those countries have already felt the geo-economic impacts of the conflict in Ukraine, and organizations can find themselves in a situation of lack of compliance with both EU and local regulations.

Particularly in the Czech Republic, there has been a push for Cybersecurity regulations by the National Cyber and Information Security Agency (NUBIK) in the last 5 years, as well as a dependency reduction from foreign parties since the war started in Ukraine. Lukáš Kintr, Director of NÚKIB, commented on the progress of the new draft legislation on high-risk suppliers assessment of technology: “The Czech Republic can have a comprehensive system for reducing the state’s dependence on untrustworthy foreign suppliers within two years. In the field of information technology, we hope to avoid the situation we are currently observing, for example, in connection with oil and gas supplies from the Russian Federation.

Moreover, with the upcoming application of the NIS2 Directive, several industries included in the Critical Infrastructure category will be touched by the new security requirements. As the tighter Cybersecurity Regulations in the EU comes to place in the next 18 months, EU countries will need to transpose it into national laws and organizations will need to understand how to implement those.

Western Europe

Western Europe organizations hold the same pattern without great discrepancies and have a balanced Regulatory impact assessment profile. Some specificities can be found in France, Netherlands and the UK.

France

France has the highest concern with Ethical-AI Regulations in Europe. France has started to roll-out their policies about the topic from 2018 on, following the publication of the National AI strategy, and the creation of the French National Committee for Digital Ethics.

The country has been historically a leader in the Ethics of technology and AI policymaking, not only from a restriction and liability standpoint but also from a talent and skills investment perspective.

Netherlands

Netherlands is the country with the highest perceived impact of Privacy Regulations, given the high degree of awareness of their citizens and therefore the concern of Dutch organizations. Even if Germany is the leading country on the Privacy subject, Netherlands leads the Privacy Impact Assessments (an instrument for determining privacy risks of data processing in advance).

United Kingdom

The UK is the Western European country with the greatest focus on Data ownership and control regulations, hence the Digital Regulatory misalignment caused by Brexit and the harmonization needed for UK organizations to keep operating in European countries.

Nordics

On another sub-European region, the Nordics, we see yet another response to the contextual geopolitical challenges. The highest regulatory impact perceived by Nordics organizations is around Digital Sovereignty Regulations.

This is explained by the perceived risk of the geographic proximity to Russia, and the increase of the state-sponsored attacks to Nordic countries, especially after the beginning of the war on Ukraine. As the region has the highest digital maturity of European, the direct cyber response is in place (updated infrastructure, high cyber skills, security systems in place, etc.) and new concerns about business implications of the geopolitical context arise.

The Nordics has nonetheless the highest perception of impact coming from Sustainability Regulations in Europe. Historically, the sub-region has had the most relevant political push for green and environmental regulations.

Norway has a number of local regulations around the ESG dimension, such as the Transparency Act, which will required amendments to be compliant with the new Corporate Sustainability Reporting Directive from the EU. Organizations in the Nordics, even if very advanced in terms of compliance with ESG-related Regulations, have to juggle with tighter requirements and uncertainty of the compatibility of the national and EU regulations.

Recommendations for Tech Providers

  • Geo-based sales enablement: Base your go-to-market strategy, sales message and product offerings on the regulatory priorities of organizations for the next two years, taking into consideration not only industry but specific geography (sub-region and country).
  • Target the top regulatory concerns across the continent: European organizations will be required to comply with many new or update regulations at the EU and local level. Target the three top areas first: Cybersecurity, Data Governance and Sustainability.
  • Focus on technology to help automate compliance procedures: Technology should be a facilitator of the compliance process. Provide your customers with Digital Regulatory Intelligence Solutions, the technologies for monitoring, data processing and reporting.

 

If you want to know more about this Research, access the report or contact Anielle Guedes.

Purpose is a word that is often talked about. But what does it mean and how does it impact your business?

Purpose is not just about what you sell, but the value you bring. Not just about the products and services you produce, but your company ethos. The impact of what you sell, how you make it and the effect your company has on the wider community.

Purpose impacts everything from buying decisions to employee productivity. Purpose, therefore, drives not only what you do but how you do it.

A purpose gets to the why of the company. Why do your products or services exist? What value does your company bring? Beyond making a profit, what are you providing?

But why does this matter?

Customers are not just concerned with the performance of the products they buy, but who is providing them. Interest in things like a company’s carbon footprint, the working conditions of employees, even the charities a company donates to influence a customer’s decision to buy.

What you stand for is impacting if people buy from you. So you need to ensure you can demonstrate the value you bring. What your “purpose” is.

Your brand purpose is also important for your employees.

It helps build strategy and focus goals. Helps with decision making. It needs to be more than a PR statement — an ethos that can help drive the company. Something that an employee can look to and ask, does the work I am doing contribute to our purpose?

It promotes an aligned and connected organisation that delivers value. Purpose enhances performance and creates value.

Brand purpose is an important keystone for any business. Brand purpose should influence everything from your strategy to messaging to recruitment.

Your company may already have a brand purpose. If you do, it’s good to revisit it and see if it still reflects the ethos and goals of your business.

There are key questions that you should be asking when thinking about your business that your purpose should answer.

Questions to ask when looking at brand purpose:

  • What does our business help people achieve?
  • How does our business impact the societies we operate in?
  • What value(s) do we have while building our products and services?

Customers are becoming more concerned about what a brand stands for. More likely to check whether your business is doing what you say it does. Performative actions without substance (such as greenwashing) will not go down well with potential customers. Purpose can be aspirational, but it must be honest.

Examples from major companies:

  • Coca-Cola. Our purpose: Refresh the world. Make a difference.
  • HP. We are a technology company born of the belief that companies should do more than just make a profit. They should make the world a better place. Our efforts in climate action, human rights and digital equity prove that we are doing everything in our power to make it so.
  • Nike. Our mission: Bring inspiration and innovation to every athlete* in the world. (*If you have a body, you are an athlete.)

Purpose goes beyond a slogan.

Purpose should tell whoever encounters it what your company stands for and what it provides.

Purpose is a factor in a business’ reach and awareness within a market. It can determine whether a customer buys from you, or not. A driver for success.

Act with purpose.

 

For more information and resources, click here.

Neurodivergent people have many talents that can add value to the IT industry. Autistic people can be strong logical thinkers, highly focused, detailed orientated, reliable and loyal. ADHD people tend to have high energy and strong imagination. Dyslexic people can bring out-of-the-box thinking and pattern recognition. Dyspraxic people tend to be really good at strategic thinking and problem solving, and highly motivated.

There is no question that neurodivergent talent can add value in a variety of technical and business roles in the IT industry. So, we don’t need to ask, “What can neurodivergent people do for the IT industry?” The answer, unequivocally, is a lot.

We need to change the perspective. We need to ask ourselves what we can do better to attract and retain these talents in IT buyer and supplier organisations.

In a previous blog, I talked about how cities should think of how to become autism friendly, including through the intelligent application of technology. In this piece, I’m reflecting on how the technology industry itself can make the workplace more autism friendly.

Making the IT Industry Autism Friendly

According to Digital Scotland, 10% of Scottish people are neurodivergent, but many of them are unemployed. In fact, the UK Office of National Statistics’ research shows that just 22% of autistic people are in any kind of employment, but many more are eager to work. That’s a lot of wasted talent for the IT industry at a time when there’s a dire shortage of talent.

According to our surveys, around 74% of European organisations find it difficult or very difficult to hire technology roles in either line of business or IT. Most importantly, that’s a lot of unaccomplished self-fulfilment and happiness for autistic people.

The good news is that the IT industry has started to pay attention. On the technology buyer side, the Israeli army recruited autistic soldiers for a highly specialised visual intelligence unit. On the supplier side, IBM established the ND@IBM BRG (Business Resource Group), which includes neurodivergent employees and allies in IBM offices across the globe.

SAP, Microsoft, DXC and EY have invested to raise awareness both among their employees through internal webinars and training, and for the overall industry by sponsoring Autism at Work Summits. There are even companies that make neurodivergent talent their core asset, such as Auticon, which provides quality assurance, testing, data science and cybersecurity services with a delivery workforce that includes around 400 autistic consultants in its 20 offices.

There’s a long way to go, but these examples show that a different perspective on autism at work is possible for the IT industry. Companies embracing this new perspective need to consider that matching the skillset of neurodivergent people with the right projects and activities, and raising awareness, are only the first steps in the process.

Success comes from changing recruiting and hiring processes by finding alternatives to one-to-one interviews, which can be a barrier for people with gaps in their social skills. For example, they could combine cognitive written tests with week-long workshops, where psychologists bring candidates together for group work and meals to evaluate their individual soft skills.

Workspaces need to be adapted. Just as an employee in a wheelchair may need a ramp, an autistic person may find a low-light, low-noise environment more conducive to concentrating. Psychologists need to be retained as job coaches to help prevent situations that cause anxiety, based on each individual’s profile, and to facilitate interaction with clients.

Dress codes need to be relaxed for autistic people that may be hyper-sensitive to touch and therefore can’t wear certain fibres. Neurotypical employees must be immersed in teams with neurodivergent people to learn how to interact.

A simple change of language from “I need this deliverable to be completed ASAP” to “I need this deliverable to be completed by tomorrow at 5pm” makes an immense difference for an autistic person. The former quite simply does not make sense, and just creates anxiety. The latter provides a clear deadline that an autistic person can meet.

Neurodivergent talent can bring a different perspective to help IT buyers and suppliers avoid bias when tackling business and technical problems in our fast-paced industry. All we need is a change in mindset to make the IT industry a good place to work for neurodivergent talent.

Massimiliano Claps - Research Director - IDC

Massimiliano (Max) Claps is the research director for the Worldwide National Government Platforms and Technologies research in IDC's Government Insights practice. In this role, Max provides research and advisory services to technology suppliers and national civilian government senior leaders in the US and globally. Specific areas of research include improving government digital experiences, data and data sharing, AI and automation, cloud-enabled system modernization, the future of government work, and data protection and digital sovereignty to drive social, economic, and environmental outcomes for agencies and the public.

AMD made major changes to its CPU and GPU portfolios in 2022. On August 29, AMD unveiled its Ryzen 7000 series of desktop processors powered by Zen 4 architecture and the new socket AM5 platform. These processors have been available globally from September 27. The flagship 16-core AMD Ryzen 9 7950X processor is presently offered at the manufacturer’s suggested retail price (MSRP) of $699.

On November 3, AMD unveiled the Radeon RX 7900 series of graphics cards powered by RDNA 3 architecture. The cards have been available on AMD’s website from December 13, 2022. Leading AMD board partners, including ASRock, ASUS, Biostar, Gigabyte, MSI, PowerColor, Sapphire, Vastarmor, XFX, and Yeston, have offered the cards from mid-December. The Radeon RX 7900 XTX has a starting price of $999, while the AMD Radeon RX 7900 XT has a $899 price tag.

AMD offered samples of the Radeon RX 7900 XTX along with the Ryzen 9 7950X processor, a socket AM5 motherboard, and a DDR5 memory kit. The samples allowed IDC to test how well AMD’s flagship technology platform performed as a completely new system or upgrade over an existing system. IDC also gauged how well the new samples performed over prior generations in terms of performance per watt and computations per U.S. dollar.

What’s New with the AMD Ryzen 7000 Series Desktop CPUs?

The core compute die of the Ryzen 7000 series processor is built on TSMC’s 5nm process node. The input/output die — which now includes basic RDNA 2 graphics capabilities for 2D workloads or diagnostic/troubleshooting purposes — is based on TSMC’s 6nm process.

AMD made a significant change by moving from the previously long-lived AM4 socket platform to the new LGA AM5 socket. Since pins have moved from the CPU to the socket, there is less risk of damage during installations or upgrades. The AM5 platform also supports dual-channel DDR5 memory up to 5200 megatransfers per second (MT/S), in line with JEDEC standards.

AMD has invested in a memory configuration standard it has branded EXPO. EXPO supports advanced pre-configured profile settings designed specifically for AMD memory controllers built into DIMM boards. These pre-configured profiles simplify overclocking for greater bandwidth and tighten timing for the fastest responses and lowest latencies.

The new socket AM5 motherboards have up to 24 PCIe 5.0 lanes and are available with AMD X670E chipsets. In addition to possessing the highest overclocking capabilities, the enthusiast-grade X670 and B650E motherboards support the PCIe 5.0 standard for graphics and storage components. However, PCIe 5.0 support is an optional feature on the mainstream B650 motherboard.

AMD has pledged to support AM5 motherboards through 2025 and at least two subsequent CPU generations. However, support may be provided even longer if the long history of the AM4 series is anything to go by.

What’s New with the AMD Radeon RX 7900 Series GPUs?

The AMD Radeon RX 7900 XTX and Radeon RX 7900 XT graphics cards are the first gaming cards to feature an advanced chiplet design. Like the Ryzen 7000 series, the AMD RDNA 3 generation architecture’s chiplet design combines 5nm and 6nm process nodes. The main graphics compute die (GCD) is built on TSMC’s 5nm process and provides the compute units for rasterization and ray tracing. AMD includes up to six TSMC 6nm memory cache dies (MCDs), each with 16MB of second-generation AMD Infinity Cache technology and a 64-bit wide memory interface. AMD invested in a novel interconnect to link the GCD and MCD chiplets together, enabling bandwidth of up to 5.3TB/s.

The AMD Radeon RX 7900 XTX has 96 compute units. Each has four texture units (for 384 in total), one ray accelerator (96 total), and two artificial intelligence (AI) units (192 total). According to AMD, the performance of the ray tracing units in RDNA 3 architecture is nearly double that of the corresponding units in RDNA 2, while the new AI instructions are nearly three times as many as those in the previous generation.

The AMD Radeon RX 7900 XTX features six MCDs that support 24GB of GDDR6 memory running at 20Gbps over a 384-bit bus. The Radeon RX 7900 XTX also supports USB-C, DisplayPort 2.1, and HDMI 2.1a connectivity with UHBR 13.5, allowing displays with high refresh rates to be connected (up to 480Hz refresh rates on 4K panels and 165Hz refresh rates on 8K panels). A dual media engine supports simultaneous encode or decode streams up to 8K60 for HEVC, as well as the new AV1 codec.

The Test Platform

The test PC hardware components included the AMD Ryzen 9 7950X processor, the Radeon RX 7900 XTX graphics card, the Gigabyte X670E Aorus Master motherboard, and a G.SKILL Trident Z5 Neo 2x16GB DDR5-6000 EXPO memory kit. The Windows 11 main drive was a 1TB GIGABYTE AORUS NVMe Gen4 solid-state drive.

A be quiet! Silent Loop 2 280mm water cooler was installed for the processor, which was paired with a be quiet! STRAIGHT POWER 11 Platinum 850W power supply. A 34″ Dell Gaming S3422DWG monitor — a Quad-HD 3440×1440 display with a 144Hz refresh rate, FreeSync, 10-bit colors, and high dynamic range support — was also utilized.

The reviewer utilized the motherboard’s optimal default settings, set the memory profile to EXPO 6000, and made sure that smart access memory was enabled. No special tuning, optimization, or overclocking was carried out for the tests.

Synthetic Benchmarks and Productivity Performance

PCMark 10 is a comprehensive benchmarking tool that covers the wide variety of tasks performed in the modern workplace. Web browsing, videoconferencing, spreadsheet and word-processing workloads, photo and video editing, and rendering and visualization are some of the tasks tested by PCMark 10.

The gaming test focused on real-time graphics and physics engines of the platform hardware. The 9,186 score the platform achieved was better than 99% of all results produced by PCMark 10.

Blender Benchmark 3.4.0 was used to test the rendering performance of the graphics card. Thanks to the Heterogeneous Interface for Portability — AMD’s compute language for GPUs which Blender Benchmark uses (in contrast to OpenCL, which does not) — the Radeon RX 7900 XTX ranked in the top 10% of all benchmarks, delivering an excellent result.

IndigoBench, an OpenCL benchmark based on Indigo 4’s advanced rendering engine, was used to measure the performance of the Radeon RX 7900 XTX. The AMD Radeon RX 7900 XTX achieved 21.500 M samples/s in the bedroom rendering test and 49.599 M samples/s in the supercar rendering test. According to the published test results, the graphics card was 56% faster than the Radeon Pro W6800 and 51% faster than the 6900 XT.

3DMark Port Royal is a dedicated real-time ray tracing benchmark for gamers. The system’s score of 16,319 was better than 93% of all results and almost double the 8,784 score of the older AMD Ryzen 9 5900X and Radeon RX 6800 XT system.

The system’s 3DMark Time Spy Extreme 4K score of 14,242 was better than 95% of all results. The graphics score of 14,593 was 48% higher than what was achieved by the AMD Radeon RX 6800 XT on the same Ryzen 9 7950X platform.

Gaming Performance

Various old and new video games were tested on the platform, including next-gen versions.

Shadow of the Tomb Raider

This game ran at an average 111 frames per second (fps) at 1440p, registering a minimum of 79fps. The highest graphical settings, as well as AMD’s FidelityFX CAS package, were enabled.

FARCRY6

Far Cry 6 ran at an average 140fps at 1440p, registering a minimum of 123fps. All DirectX Raytracing (DXR) and FidelityFX Super Resolution (FSR) features were enabled during testing.

Cyberpunk 2077

Cyberpunk 2077 ran at an average 67fps at 1440p, registering a minimum of 49fps. Ultra-ray tracing presets and FSR 2.1 features were automatically enabled.

The Witcher 3 Wild Hunt Next-Gen

The Witcher 3 Wild Hunt Next-Gen ran at an average 75fps at 1440p, registering a minimum of 60fps. Ultra-ray tracing presets and FSR 2.1 features were automatically enabled.

Fortnite

The latest Fortnite game runs on Unreal Engine 5.1 and makes use of several next-gen features (such as Nanite, Lumen, Virtual Shadow Maps, and Temporal Super Resolution). For example, the Lumen Global Illumination and Lumen Reflection features can exploit the Radeon GPU’s hardware-accelerated ray-tracing capabilities. The updated game ran at an average 82fps, with a 65fps minimum.

IDC Opinion and Conclusion

Ryzen 7950X Performance, Power Consumption, and Heat Considerations

With the Ryzen 7000 generation of desktop CPUs, AMD has taken a new approach to delivering maximum performance. Rather than limit power, AMD allows its CPUs to consume as much power as needed within the socket and reach their thermal throttling temperature (for the Ryzen 9 7950x, the throttling temperature is 95°C). With a much higher CPU thermal design power of 170W in comparison to 105W for the Ryzen 9 5950X, the 7950X reached much higher single threads and all core boost clocks, increasing overall performance and speeding up challenging productivity tasks.

However, enhanced cooling is needed to maintain the performance of the processor (this means increased fan noise). The system and cooler’s fans will quickly ramp up to high speeds when the processor is executing a demanding workload.

AMD provides several tools for performance and efficiency customizations. For example, Precision Boost Overdrive (PBO) is a feature that has dramatic impacts on power consumption, heat, and noise as it enables users to set overall socket power. On the test system, PBO had a major impact on the power consumption of the Ryzen 9 7950X, with only minimal drawbacks in terms of performance.

For example, the Ryzen 9 7950X running at 105W delivered 93% of the performance and used just 46% of the power of a higher 230W system setting. When AMD’s suggested 65W “eco mode” setting was used, the test platform delivered 73% of the performance and used 38% of the power of the 230W setting. While this configuration flexibility is a welcome change, AMD should make it simple and easy for users to change PBO socket power profiles on the fly. AMD could work with Microsoft to enable this capability via the power management features of Windows 10 or 11.

Radeon RX 7900 XTX Considerations

On the GPU side, AMD has increased the GPU power draw to 355W. This is a 55W increase over the 300W draw of the Radeon RX 6900 XT and RX 6800 XT but only a 20W increase over the Radeon RX 6950 XT. Overclocking delivered small gains of around 200 points in 3DMARK tests and slightly boosted gaming fps, but at the expense of increased power consumption, heat, and fan noise. The RDNA 3-based Radeon RX 7900 XTX can hit frequencies of up to 3GHz, with additional power available on AIB partner cards that include a third 8-pin PCIe power connector and significantly enhanced cooling systems compared to AMD reference card designs.

As with the Ryzen 9 7950X, reducing the GPU power limit and undervolting the graphics card significantly reduces overall temperatures and noise for only a few percentage drops in gaming performance.

AMD Ryzen 7000 Series Pricing

AMD faced some criticism about the Ryzen 7000X series and AM5 platform at launch. Although the pricing of the CPUs was competitive, the initial AM5 motherboards based on the X670E chipset were limited in choice and very expensive. This was compounded by the high price of DDR5 RAM (in comparison to DDR4).

AMD has since lowered the price of the Ryzen 7000X and introduced more cost effective and lower power non-X series of CPUs (the 6-core Ryzen 5 7600, 8-core Ryzen 7 7700, and 12-core Ryzen 9 7900). AMD board partners have also introduced a wider range of AM5 motherboards based on the X670, B650E, and B650 chipsets. Volume production of DDR5 has also resulted in more cost-competitive memory options.

AMD Radeon 7900 XTX Pricing

The European street price of the Radeon 7900 XTX is around €1,130, which is higher than the American $999 MSRP listed on amd.com, due to fluctuating exchange rates and taxes (e.g., value-added tax). The cards from board partners are in some cases more expensive, chiefly due to their beefed-up coolers, uprated power systems, and the additional margins of the board manufacturers and their channel partners.

It does not make sense for AMD to lower its profit margins, especially on niche flagship products. AMD’s key competitor asks higher prices for cards in the same category. At the same time, customers may not actually benefit from lower prices in some instances due to intermediaries such as channel partners or scalpers.

It’s getting harder to find a bargain these days, but with an MSRP of $999, the RX 7959 XTX reference card is actually $100 cheaper than the previous generation RX 6950 XT, despite having more compute units, more RAM, a wider RAM interface, and a significantly better performance. This should come as good news for high-end gamers.

User Experience

There are a few user experience challenges with the AMD AM5 platform, some of which are created by partners. For example, updating the motherboard BIOS may be difficult for some users. In fact, updating the BIOS of the motherboard in the test system failed a few times — the reviewer only discovered that the older BIOS first needed to be set to a default state before an upgrade could be made after carrying out a bit of reading and research. Fortunately, new standard features (e.g., BIOS flashback) simplify the recovery process when experiments with settings make a system unbootable and clearing CMOS memory does not work.

Another example is when the reviewer found that when games such as Hell Let Loose, Fortnite or Genshin Impact were launched, a sudden surge in frame rates can dramatically bolster power and voltage consumption. Fortunately, AMD has countered this issue with safety mechanisms that turn the device off when such surges are detected. After carrying out various tests and checking the health of system components, the reviewer found that these problems can be solved by establishing a frame rate cap (e.g., of 240fps), using Radeon Software.

Casual users who encounter such issues may feel displeased with the overall experience, particularly if they have to spend hours troubleshooting with systems integrators or manufacturers. They may attribute the problem to the AMD platform, rather than a poor job from the software house, in capping the frame rates.

AMD Advantage

The AMD Advantage framework combines Ryzen 7950X processors, Radeon RX 7900 XTX graphics cards, the AMD Software: Adrenalin Edition application, and smart technologies to deliver the best experiences to gamers and creators. The company works closely with prominent system integrators, including CSL, Cyberpower, eBuyer, Falcon Northwest, Maingear, Origin PC, and XIdax, to bring stable and enhanced experiences to gamers, streamers, and content creators. Customers who want to avoid the headache of troubleshooting issues during PC buildouts or upgrades will be pleased with AMD’s investments in additional testing, certification, and support.

Performance

AMD is innovating on multiple levels. The company is enhancing core architecture for inter-process communication gains, improving chiplet design for scalable manufacturing, making cache enhancements for memory intensive workloads, and supporting process and design improvements for clock speed increases. As a result of these efforts, its new products are 30–50% faster than previous generations. The company is not holding back or milking the market with small, incremental gains. Competition is one of the biggest drivers of innovation. As such, the performance improvements of AMD CPUs and GPUs are benefiting the entire market.

The move to PCIe 5 and DDR 5 will future proof the new platform. The inclusion of technologies — such as EXPO memory configuration profiles — will make performance improvements simpler and more accessible to the wider PC market.

AMD is also investing in backend software development with ISVs. AMD is collaborating with Adobe, Blender, and OBS to improve hardware acceleration across CPUs and GPUs for content creation, productivity, and encoding, decoding, and streaming use cases, thereby adding productivity value to the gaming cards.

Final Words and Conclusion

According to IDC’s monitor tracker, 1440p is the fastest-growing screen resolution. In addition, 3% of users buy 4K and higher-resolution displays. As these users are the target customers for high-end hardware, AMD is on the right track.

However, AMD has increased the power draw of its CPUs and GPUs to deliver a high level of performance. Per IDC tests, power consumption can be dropped significantly in many cases while still maintaining over 90% of peak performance. In turn, this drop can lower noise and energy bills. AMD can provide users with the best of both worlds by making it simple to switch performance profiles depending on the particular workload.

In conclusion, AMD has certainly taken a big step forward with its new generation of CPUs and GPUs. AMD’s 2023 desktop platform is taking 1440p gaming mainstream and making 120–140Hz refresh rates the norm. The new platform also makes 4K gaming possible at 60fps with the highest graphical settings achievable at native resolutions or with FSR. For this and other reasons, including AMD’s well-earned reputation for remedying challenges and aging very well, we have no issues with recommending the platform.

Mohamed Hakam Hefny - Senior Program Manager - IDC

Mohamed Hefny leads market research in EMEA on professional workstation PCs and solutions. He also reports on professional computing semiconductors, processors, and accelerators (CPUs and GPUs), as well as breakthroughs and trends related to the market. In addition, Mohamed is actively involved in AI PC taxonomy and research. He participates in business development projects, contributes to consulting activities, and provides IDC customers with analysis, opinions, and advice.

When organizations in all industries are struggling to attract talent, IDC explores opportunities for dealing with this shortage.

Introduction

Organizations in all industries are struggling to attract talent. The shortage of potential employees is a problem that has plagued the IT sector for years but has possibly never been worse than it is now. In this blog IDC explores opportunities for dealing with this shortage.

Employee Benefits

The most obvious perspective to consider is that of salary. Benchmarking employee expenses will allow your organization to match your peers and stop losing employees over salary competition.

Another benefit of benchmarking salary cost is tackling the possible internal tug of war for budget increases. An independent benchmark report is often useful to convince senior management that additional budget is required, if the benchmark points this out.

However, employees are not motivated by salary alone. For many, satisfaction also comes from working on cutting-edge technology, something that only some IT organizations allow an employee to do. In contrast, maintaining legacy systems at less competitive organizations may not be interesting to IT professionals who love to experience technology. In a benchmark, the technologies maintained by the IT staff are closely examined and compared to peers. IDC identifies key areas to innovate your business’ digital transformation, keeping IT staff engaged at the same time.

Optimize Your Current Environment

Another perspective to take is optimizing the existing situation. If finding new IT talent is challenging, IT management must consider ways to maximize the use of existing employees. With talent being as scarce as it is, management must be fully aware of possible optimizations.

A benchmark will show how teams are performing in terms of productivity and where potential exists.

Because IDC’s data collection methods dive deep into your IT administration and governance, gaps that no doubt exist are discovered and reported on. The results of a benchmark will uncover where your automation is lacking and whether your end users are educated to market conform levels. All of these insights will allow you to deliver more and better IT with the resources that you already have available.

Rationalizing and consolidating your IT environment has many benefits and generally offers an attractive business case. That said, possibly the most interesting result is simply reducing the amount of IT that needs to be managed by the talent that is so scarce. The size and complexity of the IT environment is a large factor in our benchmarks, be it the complexity of the networks, the size of the datacenter services, the setup of the end user workplace, or the amount of contract management and governance required. IDC reports on all of these components and shows the way to reducing unnecessary complexity and size.

Is Outsourcing the Way?

Finally, if the options of increasing budgets, optimizing teams, and reducing complexity are exhausted, outsourcing more of the IT services can be considered. Outsourcing can be a relatively quick answer to a suboptimal internal IT team, but it does not come without its share of challenges. The first step is deciding which IT domains are attractive candidates to place under a contract. In other words, an organization needs a sourcing strategy. This strategy will determine how each part of the IT organization should be sourced and what a fitting roadmap to get there should look like. Prioritization of rationalization projects are also considered, as well as the potential to supplement existing teams with external talent from an IT supplier.

Cost is, of course, an important factor in deciding which sourcing scenarios are feasible for the organization. IDC will provide so called ‘landing zones’ in which the future cost of a sourcing scenario are modeled based on the current IT market. This is essentially a virtual benchmark of your IT organization as if parts of it were outsourced.

If IT is outsourced in some way, the existing organization should also change. External contract governance and service management capabilities need to evolve and a future organizational model needs to be constructed. When transforming the organization, one must also consider whether it is attractive to re-educate the existing teams into roles that are needed in the new organization.

The ongoing war on talent is challenging. This blog, however, has hopefully shown that the tools to navigate this challenge exist. IDC continues to help organizations daily and to us, the current market offers new and exciting ways to help CIOs globally.

 

Generative AI is the buzzword of the day. More specifically, ChatGPT, the OpenAI model that is trained to interact in a “conversational way”.

The dialogue format enables ChatGPT to answer follow-up questions, admit its mistakes and challenge incorrect premises. Of course, like many geeks in the ICT industry and beyond, I have tried it.

It’s quite impressive. Well, besides the fact that it took me a couple of attempts to find the right time of the day when traffic was not so high to cripple access. I asked a couple of questions about my passion, mountaineering and climbing.

The answers were correct, although a bit conservative. For example, when I asked about which multipitch routes I could climb with my level of experience, in Western Canada, the model provided only two options that were exactly in line with my multipitch skills. Instead, I would have appreciated a wider variety of options, some easier and some harder than my skill level, so that I could make a choice.

The model also told me to consult local guides for more information, which indicates that careful ethical principles, like personal safety, are embedded in the design of the algorithm. I then asked about who I should vote for in the upcoming primary to elect the new secretary of the Italian Democratic Party. The answer was that the model can’t express a political opinion, but that it could provide me with the list of candidates.

That’s fair enough, and further proof that ethics are taken into account. So, I asked for the list of candidates and their programmes. The answer was that the model is trained on historical data available until 2021, so it’s not up-to-date on events between 2022 and early 2023. This is understandable, but I would expect it to be quasi real time in the future.

Regardless, fascinating.

Embracing the Augmentative AI Vision

I’ve not done enough research (yet) to say how good the model is and for what use cases. Many of my IDC colleagues are developing thought-leadership research and collecting in-depth data into how generative AI will affect enterprise and consumers.

What I’m thinking about is the societal implications of generative AI. This was triggered yesterday during our first meeting with the 2023 IDC Government Xchange Advisory Board. Gwendolyn Carpenter, a member of the Advisory Board, who has kids in school, said she’d heard about students using it to cheat on their homework.

My colleague Matt Ledger has already written a quick take on this matter too. As Matt noted in his piece, there are a range of opinions on this, from schools that believe ChatGPT can be very valuable as a learning tool, to those that are uncertain about the impact and have temporarily banned usage, to educators that believe that generative AI could make redundant our ability to write, learn and eventually think. This, paradoxically, could hamper our ability to invent brilliant new tools such as ChatGPT itself.

I am no Luddite. I don’t think we should stop progress. But I think generative AI is a great case in point for the ongoing debate about whether we should design AI that can replace human abilities versus AI that can augment human abilities.

For example, I don’t want generative AI to replace my writing, just because it’s much faster and more elegant than I am at synthesising available knowledge. I’m having a lot of fun expressing my opinions in this blog because, in a way, I’m creating it while I write it!

But I would definitely like to have a tool that can critique my writing. A tool that could, for instance, highlight where my piece is biased or where I could consider additional sources of data and literature to enrich my perspective. Sort of a much smarter version of the spell checker that tells me if there’s a typo or if I didn’t use punctuation correctly or if I used too many passive forms. This augmentative AI tool would push my brain to think more, not less. And I’d still be able to make my own choices on whether to apply the advice or not.

Policymakers need to think about how they can shape the new norms to maximise the benefits and tackle the risks of AI. For instance, by recommending (or mandating) a machine-readable label that helps recognise if a piece of content is generated by AI, for example in the case of government-regulated certifications. But regulation is not enough.

If that does not happen, AI will fail to meet the high expectations that it can be a positive force in the future. In fact, according to our Future Enterprise Resilience and Spending Survey (Wave 11, December 2022), only 25% of government executives worldwide think the promise of AI has completely lived up to their organisation’s expectations.

The future of generative AI (and the AI market in general) will depend on whether users and suppliers embrace the human augmentation narrative, in both the B2B and B2C worlds. We need to ask ourselves what kind of AI solutions we want — solutions that replace humans or augment humans. And then design and engineer them in a way that reflects that purpose.

I look forward to discussing more about the power of innovation, and how we can use it at scale to make a positive and ethical impact on society, at our Government Xchange.

Massimiliano Claps - Research Director - IDC

Massimiliano (Max) Claps is the research director for the Worldwide National Government Platforms and Technologies research in IDC's Government Insights practice. In this role, Max provides research and advisory services to technology suppliers and national civilian government senior leaders in the US and globally. Specific areas of research include improving government digital experiences, data and data sharing, AI and automation, cloud-enabled system modernization, the future of government work, and data protection and digital sovereignty to drive social, economic, and environmental outcomes for agencies and the public.