Megatrend / Digitalization.
Look around and you’ll inevitably bump into social, mobile, big data, cloud and demanding access to information anytime and anywhere. Technology is disrupting all business enterprises from all industries in every part of the world. Enterprises can seize the opportunity of connected devices through Internet of Things to capture information, enter new markets, innovate existing products and introduce new business and delivery models.
Technology will also disrupt the way people work. Machineries and software become better at replacing human tasks. Enterprises and individuals who can take advantage of the digital advances will have much to win, while those who cannot may lose everything.
1. Changing revenue models.
Digital technologies are introducing new products and services that can be used to develop recurring revenue streams after an initial sale. 80% of companies are seeing changes in how their customers access goods and services, and more than 51% are in the process of changing their revenue stream and delivery methods of goods and services.
Subscription-based revenue models are becoming more popular and micropayments such as “freemium” and pay-per-use are not far from becoming a norm. Digital technologies will also be used in product development and sales, which will demand a different set of skills and procedures to sell digital products and services than to traditional goods. Companies need to protect their digital privacy while exchanging goods and services via digital channels (e.g. cloud) to manage issues such as revenue recognition and customer privacy. (Source: Economist Intelligence Unit survey 2013)
2. Mobile takes over PC usage.
Webpage views from mobile now outnumber those from PCs in 48 countries, including India, Nigeria and Bangladesh. (Source: mobiforge.com) Ericsson estimates that mobile broadband connections will expand from 2 billion today to almost 8 billion by 2019 (2) Users are interacting with brands through mobile more than with PCs and the numbers of mobile purchases is steadily increasing. From US$204 billion in 2014 to US$626 billion in 2018, m-commerce will represent almost half of all e-commerce sales. (Source: Internet Retailer website) Technologies such as the cloud, mobile and social technologies are expected to surprise with continuous improvement of their functionalities. Enterprises will need to adapt and build mobile platforms first, instead of creating applications for desktop and then developing compatible mobile apps.
3. Overload of data.
The more people will use the Internet, the more information they will share and the more understanding will businesses have on their customers. But we are not yet used to deal with so much information, therefore 80% of customer data now generated is going to waste. (Source: AllAnalytics website)
Social media, online shopping behavior and geo-location are expanding at a rapid rate. Making use of such information allows companies to develop products and services tailored to every individual, as expectation of the customers increases quickly. Social media will be the place where consumers act as “brand ambassadors”, testing products and giving feedback, or for communicating important messages. Businesses will have a hard time controlling what others talk about them and failing to engage in conversations with the public may damage significantly the image of the brand. Rumors will spread quickly and companies need to protect themselves by being transparent with their stakeholders and customers.
4. Collaborative competitors.
Technology will reshape nearly every industry, enabling companies to develop their own digital strategies and solutions (either in-house, or through partnerships). Companies that develop their own solutions will take advantage and sell it to competitors from the same industry. Everyone will be in the race of providing innovative solutions to meet the unique needs of their customers and partners. Partnerships with technology firms will expand the digital ecosystem and change the competitive dynamics of the market. The relationships between companies will continue to be fluid even though partners in one channel are becoming competitors in another. Source: Perspectives: TCS Consulting Journal
5. Cyber security.
The Center for Strategic and International Studies (CSIS) estimates that digital crime and intellectual property (IP) theft currently costs between US$375 billion and US$575 billion per year – eclipsing the annual GDP of most nations. (Source: Center for Strategic and International Studies and McAfee, 2014). 5 of the 10 largest incidents of data breaches took place from 2013-2014 which compromised over 800 million records. (Source: Business Insider & The Economist) The numbers will continue to increase due to the greater connectivity of data to the Internet. The vulnerabilities extend with new open channels of risk from cloud-based services and third-party data management and storage tools. Governments will need to invest huge efforts to secure digital assets and protect confidential information.
6. Talent on the move.
By 2020, more than 50% of the workforce will be Generation Y and Z members which have grown up connected, collaborative and mobile. (Source: Five Trends Shaping the Future of Work – Forbes)
It becomes common in many sectors for workforce to be virtual, to work any time, from anywhere, and on any device. The lifestyle of the modern employees will require greater autonomy and flexibility which companies need to understand and adapt accordingly. Firms that are using these models will connect to skills and resources on demand rather than owning them. (Source: The Future of Work: Jobs and Skills in 2030) This will create new challenges for the leaders that must keep widely distributed workforces motivated, productive and satisfied (Source: How to manage new mobile workforce – Forbes). New skills sets will be needed to manage this and organizational cultures will be harder to maintain.
7. Robots replacing workers.
Technological limitations and capital costs are becoming less of a problem towards introducing automation in the work environment to replace routine, repetitive tasks. 47% of occupations in advanced economies are at “high risk” of being automated in the next 20 years (Source: The Future of Employment, 2013). Innovations in artificial intelligence and machine learning, exponential growth in computer processing power, and sophisticated mobile robotics are all accelerating the transition. The impact of new technologies will not be entirely destructive to the job market, but will also present new opportunities to develop new skills of controlling automated machineries (e.g. automated trucks). The governments and social systems need to re-think the educational systems to develop and retool workers to operate in the new environment.