5 of the biggest operational challenges leaders face in 2025
IT and operational leaders are facing a litany of challenges in a world grappling with economic uncertainties, booming technology and inflationary pressures. The looming shadow of a global recession and the ongoing struggle to find the right talent further complicate the scenario. This blog delves into some of the critical operational challenges that business leaders are poised to confront in the years ahead.
Challenge 1: Artificial Intelligence
The massive potential of Artificial Intelligence (AI) and generative AI to boost productivity has businesses eagerly attempting to integrate these technologies into their operations. However, this enthusiasm often lacks a strategic focus and understanding of how to identify the most suitable use cases.
Instead of hastily adopting the latest AI technologies without a clear understanding of their practical applications, businesses should first pinpoint the problems they aim to solve. Consider a company burdened with processing vast volumes of documents. This task, when done manually, consumes significant time and resources. By employing Intelligent Document Processing, the process is automated, thereby reducing costs and optimizing resource utilization.
Businesses must also weigh the risks associated with new technologies. There are growing concerns about the behavior of generative AI systems, particularly when they fail to produce accurate responses, a phenomenon known as "artificial intelligence hallucination." This issue can lead to data corruption and undesirable outcomes.
Legal and ethical considerations are further impeding the widespread implementation of generative AI. For companies cautious about these tools, a prudent approach is to introduce them in low-risk areas. For instance, creative fields such as graphic design and copywriting are ideal for integrating generative AI, enhancing productivity while supporting human workers.
Challenge 2: Digital transformation
The vast majority of businesses are on a digital transformation journey of some kind whether it be automating processes, improving the customer experience and/or moving to a centralised system. The trouble is, even if you know what you want to do, often you don’t have the budget or talent in place to action your digital transformation strategy.
A lack of training and employee engagement can also often be a significant blocker to digital transformation, something that IT and operations leaders can only overcome with sufficient time investments in their teams. New technology and processes will always have a steep learning curve, so having the right knowledge in the organisation means being able to use the appropriate tools to your advantage. Employees must have buy-in to these new changes, alongside proper training on new technology and processes.
Digital transformation can also run into difficulties due to a rushed testing period. The bigger the project, the quicker stakeholders often want to see a return on investment. Also, the more important or the bigger the project, the greater the temptation to reveal it as quickly as possible in order to capitalise on outside interest as well as meeting operational challenges internally.
Read more: what is digital transformation?
Challenge 3: Talent Shortages
Monster's 2023 Watch Work Report revealed that 87% of employers struggle to find IT talent. In-demand roles like machine learning engineers, software developers and analysts have become even more sought-after with the rise of hybrid work environments and digital transformation, necessitating specialist skills. This supply and demand imbalance has escalated hiring costs and raised the standards for employee benefits packages. Amidst the ongoing cost of living crisis, finding the right talent while adhering to budget constraints presents a formidable challenge.
Global factors are also impacting businesses' ability to recruit new talent, such as inflationary pressures and the ongoing recovery from the COVID-19 pandemic recession. This situation is aggravated as industries recognize the efficiency gains from integrating IT and engineering into their operations. However, the talent shortage slows the development and growth of digital platforms essential for competitive success, directly impacting a company's financial performance and increasing the demand for operational and IT resources.
Additionally, according to Gartner, talent shortages pose the biggest threat to emerging technologies, with the threat up 60% since 2020. Talent availability is a critical factor inhibiting technology adoption across key domains, including AI,infrastructure, network, security, digital workplace, IT automation, and storage/database services, thus hindering operational progress.
Challenge 4: Cost of living crisis
In the UK, median forecasts for 2023 predicted an average inflation rate of 7.4%, with the Bank of England projecting a mere 0.3% economic growth in 2024. For businesses, this translates into doing more with less. Rising talent costs, supply chain issues, and the imperative of digital transformation compound these challenges.
Operational leaders must explore ways to streamline or automate internal processes to enhance efficiency and increase team capacity. During budget constraints, companies might suspend support for new projects like digital transformation or impose hiring freezes until the recession's impact diminishes. The challenge for operational leaders is to sustain their commitment to driving positive transformation while navigating these macroeconomic factors.
Challenge 5: Visibility
Given these challenges, it's crucial for operational leaders to maintain visibility over their processes to identify bottlenecks, allocate resources effectively, and enhance the customer experience. However, reliance on outdated legacy systems and multiple platforms often obscures insights into strengths and weaknesses.
Complete visibility and a comprehensive view of operations are essential for impactful decision-making and addressing operational gaps. Companies frequently lose time determining accountability due to unclear communication lines across multiple channels and work streams.
A centralized platform for managing all work streams is increasingly vital. Such a system simplifies gaining actionable insights on metrics like average ticket completion time or customer satisfaction scores, thereby fostering more informed and efficient operations.
Enate's AI-powered workflows enable you to oversee, manage, and optimize workflows through a comprehensive, end-to-end solution, enhancing operational efficiency across the board. Discover how TMF improved margin by a whopping £32million using Enate.
