In an increasingly interconnected, globalised and complex world, it has proven more difficult for organisations to accurately predict where and how the next disruption in their industry may arise. Author Nassim Nicholas Taleb explains in his book ‘The Black Swan’ that certain events — such as the 2008 financial crisis — are impossible to predict and rare, and are statistical outliers.
IT teams need to take into account such risks as well, and large up-front investments often end up compounding these risks, as technology disruptions may make certain technologies obsolete, regardless of how much has been spent on them. One such example is how Zip disks became obsolete just a decade after they were introduced, supplanted by cheaper CD-R technology and later by USB flash storage. Companies that had made up-front investments in large volumes of Zip drives and disks therefore lost competitive advantage to other companies that were able to switch to more cost-efficient forms of storage.
IT investments, therefore, need to be based on the possibilities that a certain architecture, device or platform may need to be discarded in the future and an organisation needs to be agile enough to pivot itself away from legacy technologies. The key is to prevent lock-in to particular vendor ecosystems or formats, and invest in technologies that allow an enterprise to keep its options as open as possible with canonical standards and open APIs.