Observability gains ground

As Australia emerges from two unsettled years, businesses nationwide are now refocusing their technology strategies and leaning into the next phase of digital transformation.

The pandemic spurred a rapid expansion of many businesses’ digital presence and technological investment, exacerbating monitoring challenges for traditional IT teams and forcing many companies to accelerate their digital innovation plans.

Shifting expectations

Businesses are now re-examining their long-term plans in light of shifting expectations. Today, businesses are expected to have a contemporary, agile approach to digitisation. There’s also an expectation to prioritise innovation at every opportunity and transform customer and employee processes to ensure they are digitally driven. Observability — the ability to measure the internal state of a system by examining its outputs — continues to gain ground as a key metric of digital transformation, according to Splunk’s State of Observability 2022 Report. The report shows that observability “leaders” (those who have already adopted observability tools in their business) present as more forward-thinking, innovative and able to adapt to change, compared to “beginners”, who are just starting out in their observability journey.

When it comes to digitisation, customers and potential employees are seeking out organisations that are already ahead of the curve, implementing the “next best thing” before it becomes best practice. For many, a company’s focus on observability and its ability to transform businesses is a marker of its overall attitude to innovation. Observability leaders have launched 60% more products or revenue streams from their AppDev teams in the past year compared to beginners according to the Splunk report. Also, more innovative organisations increase employee productivity at twice the rate of less innovative organisations.

Rise of the citizen experience

The post-pandemic rise of the ‘citizen experience’ is accelerating the need for a frictionless customer journey and greater observability over the process as a whole. Customers expect more than ever before from the businesses they interact with, and companies are thus more aware of the need to meet expectations to retain market share. The pain of application downtime is real: the impact of reduced customer satisfaction and loss of revenue and customers has increased year-on-year, according to the report. Observability is a trend that businesses can’t afford to ignore from a cost-saving perspective. Observability leaders’ average annual cost of downtime associated with business-critical internally developed applications is $2.5 million, compared to $23.8 million for beginners.

As a result, businesses are investing heavily in new customer solutions like serverless apps to enhance the customer experience, while also seeking out ways to have real-time visibility into how customers interact with their systems. They recognise the value of being able to better understand and connect with the customer journey in real time, and to use analytics to improve technology.

Tech-first, digitally driven workplaces

For employees, the accelerated rate of digital innovation is indicative of a tech-first, digitally driven workplace. It also shows potential employees their skills will remain relevant, there is a clear career trajectory and there will be continued opportunities for growth. This metric is critical when organisations are battling it out to secure next-generation talent and skills — it could be the difference in attracting top-tier staff or watching them take up positions with more digitally savvy competitors.

It’s a similar mindset for retaining staff. Post-pandemic, employees are looking for roles where they can be productive, creative and not bogged down by menial tasks. This year, there has been a rise in innovations like edge computing to not only reduce costs and better allocate internal resources, but to drive productivity and overall business innovation. This level of digital transformation is helping to retain workers in a competitive market, and make businesses more resilient and efficient.

Continued transformation

Observability has gained considerable user traction over the past two years. Smart businesses will have it top of mind when they’re planning continued transformation of their digital systems, ensuring they build the technology and tools to attract talent, and invest in skills training to make observability part of BAU in the coming years.

The good news is that Australia is already on a solid trajectory. APAC adoption of observability tools and functional capabilities is at a record high of 35%, which is on track with its global peers. The relatively high adoption rate is a direct result of leaders heralding their efforts, along with the benefits of adaptation, and like-minded peers following suit, evaluating processes and tools along the way.

However, there’s still more work to be done. In a competitive market, the businesses that find solutions to observability and implement accordingly are likely to attract the lion’s share of both customers and employees. Companies need to work to overcome challenges — skills shortages, compliance regulations and complexities around the architecture, along with a need to reframe the mindset around the customer experience, and the imperative to prioritise it across all areas of business. However, despite the difficulties, observability is an area that companies will want to invest considerable time and money in to reap the benefits across security, performance and cost savings annually.

Image credit: iStock.com/Naeblys