Foster enterprise growth in recessionary times: The case for the autonomous enterprise

2023 makes a strong case for enterprises to pivot toward the autonomous enterprise to combat the impact of the global economic slowdown, worrying inflation, and talent shortages while focusing on enterprise innovation.

As many companies are forced to reduce staff while struggling to hire people into low-income roles, they will be forced to do more with less, streamline processes, and centralize their data needs to operate more autonomously.

HFS Research’s Chief Analyst and CEO, Phil Fersht, in his opening keynote session of the London Horizons Summit, shared curated insights from recent HFS surveys around macroeconomic factors impacting businesses, evolving enterprise expectations, tightening IT budgets, talent shortages, and disoriented employees. He also expounded on how building an autonomous enterprise could be the panacea to overcome these challenges and defined its contours and principles (see Exhibit 4).

What is an autonomous enterprise?

An autonomous enterprise has leadership that continuously seeks to refine the data it needs in real-time to be successful. Its governance capability ensures it has the talent, tech infrastructure, automation, and AI to deliver the data to drive success with minimal manual interventions impeding progress and speed. Ultimately, this is about machines making decisions where we previously had humans and removing humans from loops that don’t need humans anymore.

However, becoming an autonomous enterprise is not an easy or quick remedy. It is a journey enterprises cannot complete alone, and they need support from trusted partners more than ever. It’s time to build the case for the autonomous enterprise.

The ongoing problems plaguing enterprise leadership are aplenty

In a recent survey of 600 Global 2000 enterprises, the inability to hire quality staff and data-security issues surfaced as the top two internal challenges to meeting their strategic goals. They also face significant budget challenges across sourcing and IT (see Exhibit 1).

Exhibit 1: Triggered by the economic slowdown, enterprises will likely slash their budgets

Sample: March 2023; 508 enterprises across the Global 2000 (predominantly IT leaders)
HFS Pulse, 2022 and 2023; 602 enterprises (2022) and 600 enterprises (2023)
Source: HFS Research, 2023

Enterprise leadership needs to get its house in order when managing talent in this environment.

There’s a mismatch in leaders’ understanding of employee expectations. For example, empowerment to make decisions emerged as the most important motivation factor; however, when we put the same question to leaders about their employees, it wasn’t among the top three choices of the cohort.

Exhibit 2: Leaders struggle to recognize people’s desire for empowerment

Sample: 668 employers; 1,333 employees
Source: HFS Research in partnership with Unisys, 2023

Besides, employees within IT services firms now feel bored and are ready to jump ship. Of the 1,800 employees HFS surveyed spanning leading IT and business service providers, almost 89% of employees felt under-challenged in their current roles, and more than 60% are ready to move to a competitor for a 30% salary increase.

Enterprise expectations and ways of working are shaping up

Our survey included senior executives from some of the Global 2000 firms; 338 told HFS they would prefer to pay for outcomes and data quality rather than “butts in seats,” indicating that the most successful service relationships will evolve from effort to performance to purpose.

Ambitious enterprises are creating new leadership roles to impact the experiences of customers, partners, and employees, as showcased in Exhibit 3.

Exhibit 3: Ambitious enterprises are rethinking hierarchies

Source: HFS Research, 2023

The panacea, aka the autonomous enterprise

An autonomous enterprise allows humans to remove themselves from some parts of the system so that we can continuously improve the ecosystem, enabling enterprises to combat the increasing people costs triggered by inflation. Its governance would ensure that talent, tech infrastructure, automation, and AI deliver the data to drive success with minimal manual interventions that impede progress and speed. An autonomous enterprise enables positive changes such as reskilling and motivating people, taking advantage of self-learning cyber solutions, and operating autonomously in the cloud.

Exhibit 4: Adopt these six principles to progress in your autonomous enterprise journey

Source: HFS Research, 2023

The six principles of the autonomous enterprise

• Your leadership must understand the data needed for your enterprise to be successful.
• Your teams must know your processes and interactions in digital detail and have a continuously updated audit trail of these digital interactions and processes.
• You must have the right infrastructure to break down the silos of data across your enterprise and its ecosystem.
• You must ensure a robust and scalable automation capability that is trusted internally and externally.
• Artificial intelligence (machine learning, deep learning, and decision engines) must continuously find patterns in your data to keep you ahead of your market and empower your leadership to make rapid, low-risk decisions.
• You must establish a robust governance system embedded across all decision touchpoints to ensure the effectiveness of your autonomous enterprise.

The Bottom Line: Adopt an autonomous mindset and move from effort to purpose.

Make a real effort to stop wasting time on tasks, interactions, and processes you can automate. Instead, focus on making smart decisions based on the data your systems generate. Re-define your IT and business services contracts based on measurable outcomes. Be aware that employees or clients stick around when there’s engagement, trust, and a relationship. The transition toward an autonomous enterprise is a purpose-led strategy, not a tech-only puzzle. A successful autonomous enterprise requires a combination of changes across cultures, people, data strategies, process re-envisioning, operating models, and governance, all working together to achieve a common goal.

Major rethinking is taking place; many firms struggle to navigate the current maze of complexity and cost. The survivors are looking toward the autonomous enterprise vision, but getting there requires fewer people and politics, less resistance to change, and great partnerships.

Watch the session video here: