Given how quickly the technology business sector has iterated and developed in recent years, it’s only natural that so many unique challenges and risks have emerged.
While some challenges are part of routine work, others are more prominent and therefore, they need immediate attention.
The nature of operations and structure of every company are unique. If you look closely, the challenges faced by them are also unique.
The friction point in a small start-up in Singapore, Bangalore, or Dubai may not be the same as a large global MNC.
However, when you look at the bigger picture, the challenges are almost similar in nature, be it a small tech start-up or an established global company.
The first step to overcome these risks is to accept the fact that risks exist.
In this article, we have compiled the top 12 risks that technology businesses are facing in 2023.
Top 12 Risks or Threats Faced by Tech Companies in 2023
From adopting new trends to recruiting and retaining adept talent pools, technology companies are always at the forefront of critical challenges. They have to find solutions to the following emerging threats and take timely counter-measures to thrive in the global competition.
1. Price Point Dilemma
The price point is always a dilemma for tech companies.
On one side, since the demands in the market are high, you have the liberty to raise your product and service costs. However, on the other side, you also have to stay ahead of your competitors.
And to get an edge in the competition, you need to plan out competitive pricing.
Setting the price tag in a particular currency is a problem again.
Given the fact, currency exchange rates always fluctuate, your set price in one currency may not give you the same value in another currency.
The best solution to this problem will be to set localized price tags.
2. Data Security
Data security is the process of preventing unwanted access, tampering, or theft of digital information over its entire lifecycle. It is essentially a notion that incorporates all aspects of information security.
The aspects include physical security of hardware and storage devices, admin access to essential systems, securing the entire network, and logical security of different organizational software.
Since businesses operate with a tremendous volume of data, any wrongful act may compromise the safety of millions of people. This has been a real picture in recent times. The Covid-19 pandemic alone saw a substantial increase in cyber threats.
In such a circumstance, businesses need to prioritize data security as the foremost risk. Along with that, they need to look for robust mechanisms to protect and counter data breaches.
3. Data Governance
For most tech companies, data is becoming the fuel that drives them forward.
Starting from transformation, innovation and decision arise from data. That is why companies invest billions in collecting and storing data in secure facilities.
However, despite the best efforts, we come across news of data breaches and data theft issues almost regularly. Adding to that, worldwide campaigns are being organized worldwide against tech companies collecting and dictating the personal data of their customers.
This has led governments to come up with stringent data protection laws, monitoring and regulating the amount and nature of data being collected by companies.
General Data Protection Regulation or GDPR and Data Subject Access Request or DSAR are among the many regulatory laws in the EU and USA. For more information, you can read the DSAR guide to know why it is an important step towards better data governance. And also find out how DSAR is one of the core elements of the California Consumer Privacy Act of 2018.
4. Software Piracy
Software piracy is a global problem that many software companies are dealing with.
While it may appear that hackers or skilled coders are the primary perpetrators of software piracy, anybody can be a software pirate.
Theft of legally protected software is a criminal act punishable by law. Even after that, many software businesses struggle to keep their products from being stolen.
Data piracy not only compromises the data and company customers but is also a dent in the company’s image. That is why companies take data piracy more seriously than ever.
5. Functionality
A perfect software product should not only have a unique design but at the same time should be functional in order to benefit the most from it.
For example, you may have tax software that you want to work in several regions. Each location, however, has its own set of tax systems and subsequent legislation restrictions.
If you opt to design software for each location separately, you will have a lot of work on your hands. Furthermore, you will have to deal with customized and regular software updates and maintenance.
On the other hand, if you decide to build a single system that can support all of the regions, the software will be incredibly large and expensive to develop. Failing to understand the functionality in every target region, you may end up wasting your resources designing incompetent software.
6. Staying Contemporary
When compared to the past, the rate of innovation and variation is blistering. New and transformative technology is emerging frequently. But this rapid innovation itself is a challenge for businesses to stay contemporary.
First and foremost, you need to be vigilant about market trends and consumer behaviors. You have to deploy a market analytics and monitoring system to catch up with your leads and convert them.
Second, you need to tactfully plan out your cost strategy. Quick pivots necessitate cash and, in several circumstances, the disruption of corporate processes in order to prepare for the move. You must be ready to take on the call in such cases.
7. Attracting and Retaining Talent
The new emerging fields like AI, Data Science, Machine Learning, and Blockchain are prompting tech companies to hunt for new talents.
You need to have proficient teams that not only understand the new age technologies but extract the benefits for your company’s growth.
The majority of organizations believe they have solid digital plans, but just a tiny number believe they have the people and expertise to implement them. This is because there is a dearth of skilled talents in the global tech industry.
Even if you find the right person for the job, retaining them is another issue altogether. Hence a proper and strategic talent acquisition program is needed to address the situation. The quicker companies do it, the better it will be for their survival as well as growth in the long run.
8. Ransomware
‘Ransomware’ is a buzzword that has been around the corner for quite some time. it’s easy to dismiss that ransomware is generally a problem that other businesses deal with, not the technology businesses. That is a naive assessment and it can be suicidal too.
On the consumer side, ransomware assaults may be on the decline, but there is a catch.
According to a recent estimate, the number of detections in commercial and enterprise settings grew from 2.8 million in early 2018 to a whopping 9.5 million in 2019.
The stats are enough to explain the severity of the ransomware problem and why as a tech business, you need to worry about it.
9. Automated Threat Detection
Reinvesting in security teams should be prioritized by organizations. For years, we have been living in an era of alert overload, with security and response teams becoming overwhelmed by the volume of data they receive.
The sheer volume of operation involved in threat detection can undermine the purpose itself. Despite the best human efforts, threats may still creep in through loopholes and vulnerabilities.
To address this, organizations require a foundation of data analytics that can study behavior and detect probable threats. The more self-sustaining and automating the process, the better efficient system will be in place.
10. Syncing With New-Age Tools and Technologies
The Covid-19 compelled a number of new trends.
Many businesses have had to speed up the transition to digital technologies with several new software and tools intended for remote working and team management.
However, rapid implementation of new technology and processes can cause disruption of work-flow, rather than helping.
Companies must address the issue before they impede production and result in an isolated workforce. The easiest way to accomplish this is to educate the teams about new tech tools and software.
11. Changing Customer Expectations
In today’s difficult environment, IT teams face challenges with a product focus, budgets, timetables, and team chemistry.
The most challenging task for any tech team will be adapting to how their clients are evolving in terms of expectations.
The most successful technology companies understand their customers’ demands. The increased digital literacy has allowed customers to even compare products and services before purchasing them. They no more blindly follow or choose a company just for the name.
12. Scalability
Every year, around $300 billion is spent in software development productivity alone, with no clear return in sight. This is due to a lack of automation in the system.
As a result, scalability becomes a challenge with companies operating with limited capacity and limited expertise.
This leads to a substantial increase in the marginal cost of service delivery – a factor that again hinders the scalability of a tech business.
Conclusion
The most difficult task is striking a healthy balance between regular duties and long-term strategic objectives.
Cyberthreats, technology, and business objectives are all changing. To stay ahead of the competition in an ever-evolving threat landscape, business leaders must ensure risk mitigation does not subside under business objectives.
Only by overcoming these hurdles will a software company be able to prosper in the global market.
While the challenges appear to be numerous, operating on a global scale involves more than just a set of problems. But when successfully done, the corporation will have a larger market, which will lead to higher sales and higher profit margins.
