Seven out of 10 CEOs say their network is slowing business growth: Study

Technology modernisation comes with a lot of challenges and a recent report highlights that 70% of CEOs believe their network is a primary factor impeding their business growth and expansion. 

The report by technology solutions provider NTT also revealed that while 95% of organisations recognise the importance of networks as the backbone of digital transformation, only 50% of those surveyed admitted that their company aligns network technology with business goals and priorities.

The NTT 2022 Global Network Report, that surveyed more than 1,300 enterprise networking professionals in 21 countries including India, further observed that eight out of 10 respondents embrace innovations like edge, cloud, 5G, artificial intelligence and machine learning, yet 70% struggle to keep up with the pace due to rising network problems and lack of expertise.

Additionally, security and compliance in network architectures are becoming a top concern. Other challenges include “lack of use cases and perceived return on investment,” budget constraints and vendor capacity as top challenges.

NTT said that the adoption of hybrid, distributed work environments with multiple connected devices is erupting through enterprises. However, despite investments, just two in five businesses say they are very satisfied with their current network capabilities.

Seven out of 10 organisations said that they lack the in-house skills to operate modern network technology and lack the skills and resources to drive network and business-as-usual development initiatives. While companies have been agile in adopting hybrid technologies, cloud migration, 5G and AI, reaching maturity and excelling in using new technologies remains a challenge.

The report comes at a time when enterprises are already in the midst of global market disruptions, including unpredictable economic, social, environmental and political forces. These, coupled with complex technology and cybersecurity threat landscape, are forcing organisations to evaluate their business strategies and IT investment decisions. Many are moving to more centralised, cloud-based security solutions and a managed endpoint security model.

“Levels of investment in the network have surged, with the results of this research showing many organisations are leaning towards key partners and managed service solutions to fulfill their requirements,” said Amit Dhingra, executive vice president at NTT.

The survey further said that more than 90% of senior executives prefer the network-as-a-service model due to its potential to scale up and down. Technical complexities such as deploying effective AIOps, automation solutions and simplifying ongoing network operations make the network as a service model more attractive.

“Businesses should consider security, skills competency, ability to scale, private 5G and software-defined networking when selecting a network service provider,” Dhingra said. “In the long term, blockchain, further AI and automation, augmented and virtual reality (AR and VR), quantum networking, 6G and photonic computing will affect how networks are delivered.”

 “As the network plays a fundamental role in digital transformation strategies and distributed working and processing, we can expect to see more enterprise network upgrades as technologies such as AI and security defences are layered on to mainstream enterprise networking,” said Chris Barnard, Vice President at International Data Corporation (IDC).

A September 2021 study by research firm IDC suggested that more than 50% of CXOs indicated that they expect to increase spending on 5G connectivity, devices, and applications in the next 12-18 months. And a similar percentage expect to increase their spending on WiFi-6 hardware, software, and services to bring increased speed, lower latency, and more efficient internet of things (IoT) functionality to large buildings, offices and campus environments.