Kim Sneum Madsen, CEO of Umbraco, writes:
“Organisations faced numerous challenges in the past year, including rising costs, supply chain issues and increased competition for talent. In addition, the effects of climate change are becoming more evident, making it imperative for companies to find new ways to reduce their environmental impact.
In spite of these headwinds, we know that necessity is the mother of invention and, as an open-source company working with thousands of creative people, we see many reasons to be hopeful as we head into our nineteenth year in business.
The pandemic accelerated digital transformation across all sectors, enabling a seismic shift in working patterns and putting customer experience at the top of the tech agenda.
Considering these combined factors, we believe that three trends will dominate our industry in 2023:
- CMS solutions will evolve substantially to enable broader digital experiences
- Data protection will be a key factor when building digital experiences
- Companies will adopt holistic sustainability
Let’s dig into why:
CMS solutions will evolve substantially in 2023
As we enter a new period of austerity, organisations will have a firm focus on technology ROI. Anything that doesn’t meet business needs will be off the menu. Paying license fees for unused software features will become a painpoint. When it comes to CMS selection, we predict that many organisations will rethink their monolithic approach and opt instead for composable architectures that allow them to combine best-of-breed technology components such as CRM, analytics, AI, automation, commerce and CX, which directly benefit the bottom line.
The adoption of composable architectures will increase the appetite for open-source solutions to reduce licensing costs, ease integration and increase agility.
While CMS were the engines that powered the world’s websites. Now, content management is just one element of the more complex digital experiences we see our digital agency partners building today. However, CMS will remain a crucial component in composable DXPs built from API-connected solutions that are selected and seamlessly integrated to meet immediate business requirements.
We’ve observed that the B2B experience of buying software has become more akin to the B2C experience. This pattern will continue in 2023 as it allows organisations to select what they need and incorporate fresh DXP elements such as automation, PIM, DAM, AI and personalisation software, to support composable commerce strategies and put customer experience at the forefront.
Anders Holt, CEO of our longest-standing partner, Novicell, predicts, “Organisations must be led by what customers demand, not what their technology will allow. More companies are recognising that consolidating their digital presence on a single large platform can limit business opportunities. Instead of trying to serve customers from a single solution that’s expensive and slow to update, in 2023 we’ll see more organisations using a combination of specialised component solutions that directly meet current business needs and which can be more quickly and economically replaced as customer requirements change.”
Data protection will be at the heart of digital experiences
The technology market has been governed by national and data protection regulations for decades. The right to privacy of correspondence was enshrined in the European Convention of Human Rights in 1950, the first UK Data Protection Act was passed in 1984 and the EU GDPR updated those protections for the internet age and came into force in 2018. We have seen major companies being called to account and fined millions of Euros for their handling of customers’ data. Apart from the threat of fines for breaking data protection laws, the reputational damage and loss of business resulting from breaching customers’ trust are the greatest deterrents. This will drive a stronger focus on the ethical use of data by technology companies.
As CMS platforms evolve, data protection will be a key factor in the way that data is processed, transferred and protected within API-connected architectures. Many countries outside of the European Economic Area have adopted similar regulations to EU GDPR and provide equivalent protection for citizens’ personal data. As more organisations adopt cloud-based services to benefit from reduced operating costs, we anticipate that there will be a customer-led demand for greater data sovereignty to provide reassurance that their personal and financial information is stored within their own borders and protected by their local jurisdiction.
Mark Lusted, CEO of MagiClick, which has developed a number of digital platforms for financial institutions also believes that 2023 will see organisations incorporating DXP elements that support data compliance: “The EU Digital Market Act looks to be a game-changing piece of legislation which will force the major players in technology to break open their “walled gardens” in 2023. This has major implications for all companies designing and building digital experiences.
The impact will also likely be felt well beyond the borders of the EU because, as we’ve seen with the previous GDPR legislation, many global businesses seek to implement key areas of compliance globally. Other jurisdictions are also likely to follow suit with similar legislation.
The wider direction of travel for the technology market is clear and those designing and building digital products need to embed the ethical use of consumer data in their product design approach and embed transparent, clear standards on how they will use this data. I also believe these changes will create opportunities as the data held within “gatekeeper” platforms from Big Tech giants are opened up and I have no doubt that innovative use cases for this will soon follow.
CMS vendors will need to adapt the privacy and interoperability features of their platforms and I believe these changes further strengthen the case to move in the direction of composable digital experience platforms, rather than monolithic solutions, as composable architecture affords much more flexibility to adapt and choose components from different ancillary products which best fit the new legislative requirements.”
Sustainability evolves to a more holistic vision in companies
We predict that environmental, social and governance factors will drive DXP decisions in 2023. Sustainability will become more holistic and be incorporated into the earliest stages of digital design and technology selection.
Any company that wants to put its customers first needs to start by listening to them. Customers are looking more closely at the way that organisations treat the environment and their employees. Companies that are seen to put profit before people are losing market share.
The technology industry is coming under greater scrutiny for the resources that it consumes and the volume of its byproducts, whether that be electronic waste, heat from servers, or CO2 emissions from datacentres. This will extend to the way that digital experiences are designed. Every click consumes energy. As customers become aware of ways to reduce the environmental impact of online activities, organisations will be driven to reduce energy consumption, adopt greener solutions and put back into society and the planet.
We have already seen the technology industry making strides to improve diversity and inclusion. This will continue in 2023 as organisations recognise the social and financial benefits of viewing the world from multiple perspectives and accessing fresh problem-solving capabilities. As an open-source company we have long understood the value of crowd-sourcing creativity. In challenging times, this collective effort will help organisations to survive and thrive.
On the governance front, competition for talent is pushing organisations to select technology platforms that attract the best employees and help them to deliver seamless digital experiences to their customers.
Good governance promotes profitability without being heavily detrimental to the environment and employees. In 2023 there will be greater pressure to create better profitability paths in the tech industry so that companies can be financially sustainable as well as ethical.
Here too, we see composable architecture playing its part in a sustainable culture. By enabling technologies to be swapped in and out of the stack to meet business opportunities, organisations can extend the life of digital platforms without major investment in re-platforming.
Andy Eva-Dale, Technical Director at digital agency and Umbraco gold partner, Tangent, offers some excellent advice: “The IT industry is responsible for 3-4% of global CO2 emissions. Every http request uses energy. The good news is that designers of digital experiences can help to reduce this impact. In 2023 we’ll see more organisations adopting sustainable digital design practices such as asset bundling and optimising images to reduce their size, improve load speeds and lower energy consumption.
Sustainability also extends to considering how we might reuse common code and reference architectures, rather than duplicating developers’ efforts and squandering scarce resources. Adopting a composable approach to digital experience development allows API-connected technologies to be swapped in and out, rather than ripping and replacing an entire platform. In a challenging economic climate, the ability to extend the life of digital experience platforms by adding in lighter weight technologies that precisely meet business needs and avoid the organisation paying expensive license fees for unnecessary features, is more likely to win over the C-suite too.”
How Umbraco helps partners to profit
At Umbraco, we do everything we can to keep up-to-date with current business trends and put them into practice ourselves, so that we are the best choice for organisations seeking a future-proof, user-friendly CMS that supports the move to composable architectures and has data protection at its heart.
As a European company, we already abide by the toughest data protection regulation in the world. Earlier in 2022, we launched regional cloud hosting in the U.S., providing our American customers with the option to store data locally, within their own country’s jurisdiction.
Our digital agency partners are already building composable digital experience ecosystems with Umbraco. The recent release of Umbraco 11 includes a new Marketplace, which makes it easier to discover technologies that seamlessly integrate with our CMS. Our mission is to make complex tasks simpler, so we’re actively expanding the number of Technology Partners contributing integration packages to the Marketplace, to make it easier to find the right tools to build powerful digital experience platforms that keep customers loyal and help businesses thrive.
As a proudly Danish company, our eco-friendly ethos runs through everything that we do. We share what we’ve learned on our journey to becoming carbon neutral and encourage our partners to follow the same guidelines. To date, Umbraco and our amazing community have planted over 17,000 trees. We have a diverse, inclusive, sustainable culture that puts people and the planet first, while providing an open-source platform that supports our partners’ profitability.