The most important digital and technology trends for CxOs globally

24 May 2016

Rapid technological advancements have in recent years sparked a wave of innovation, forming – across the dimensions of cultural-socio, economic and political – a number of megatrends, from the growing middle class and the Internet of Things to quantum computing. For business too, digitisation is, on the back of a convergence of several technologies, radically reshaping the very nature of business, challenging or even disrupting established strategies or operating models. Going forward, the speed with which technology will impact lives and business is set to further accelerate, implying that CxOs will increasingly have to come to grips with digital and technology trends.

The rate at which innovation is taking place, facilitated by a variety of new technological groundwork on which new innovations are able to be propagated, has been increasing over the past decades. For example, the innovation lead time to attain a modest 50 million users has increased markedly since the 1970s. The humble mobile phone took 18 years to reach the 50 million mark, while the internet took a surprising 12 years. Smartphones took a mere 8 years to reach the landmark, while social networks enjoyed a lead time of merely 3.5 years. Apps, facilitated by smartphones, took less than a year (0.4 years) to reach 50 million users.

The pace of change is having a major impact on corporate landscapes – more than half of the Fortune 500 companies that made the list in 2000 have since ceased to exist, with many analysts believing that in the next 10 years up to 80% of Fortune 1000 corporations may be replaced.

Innovation lead time

To stay ahead of the game, executives are finding themselves in a heated battle to understand the digital forces that are coming at them, as well as the threats and opportunities accompanying them, and subsequently use that information to define and execute winning strategies. To help CxO’s develop insight in such technological mega trends, Atos annually conducts in-depth research into the landscape, and provides analysis of the key emerging trends, business needs and technologies that are forecasted to drive innovation. The analysis is based on an assessment of three factors: the time of impact (2016 to 2019+), the business impact (from low to transformational) and the maturity of technologies (from emerging to mainstream).

This years’ edition (‘Look Out: Trends 2016+ – Digital’) suggests that when it comes to technology trends, some of the most transformational technologies to affect the business environment are already becoming mainstream. These include Omnichannel, through which customers are served across digital and physical channels, and Industry 4.0, in which horizontal and vertical value chains are integrated through digital means. According to a recent study by Strategy&, Industry 4.0 will add a forecasted $493 billion in revenue gains per annum over the coming five year period. “Industry 4.0 is a melting pot that combines the Internet of Things (IoT), advanced Big Data analytics, new generations of human-machine interfaces and reliable layers of ubiquitous connectivity. It helps organisations manage the flood of information from smart machines, connected workers and the products themselves,” write the authors. 

Servitization – a concept which describes the adoption of ‘as a service’ business models, is regarded as a technology that still finds itself in the early adopter phase, while Personalisation, in which customers are better understood through leveraging the cloud and the Internet of Things, is seen as being in its adolescence.

Top 20 technology trends

High impact trends which are in early adoption include Horizon Scanning, which allows organisations to systematically and continuously analyse evidence about future trends, emphasizing new technology and its effects. Other high impact - early adoption trends are Bi-Modal Business digitalisation models, where legacy systems are seamlessly operated next to emerging improvements, and the Economy of Data, where new business models are created using data and analytics, not simply for reselling data, but for creating completely new market offerings.

Medium impact trends include Cybersecurity Techniques, DevOps and Analytics for Social, in the short term, and Cyber-Physical Systems, an API Economy and Protecting Digital Property, as arising in the long term. Trends with the lowest impact include Amplified Intelligence (augmenting machine generated data-driven insights with the human intelligence) and Neurobusiness, the art of leveraging neuroscience capabilities to improve business decisions and interaction.

Top 20 technologies impacting CxO agendas
Building on the top 20 technology-driven trends, the authors further consider the most important technologies that are set to affect business- and operating models in the coming decades. The most transformational technologies, which could radically reshape human society by, for instance, reducing the need for workers, are typically connected with computer intelligence and industrial processes. In the short term Deep Learning, which recently saw a computer beat one of the best Go players in the world, and Insight Platforms, which combines big data and analytics through a focus on behavioural analysis to better understand process and users, are set to be transformative.

3D printing, a market which according to Bain is set to reach $12.5 billion by 2018, and the Internet of Everything, which would see most things connected through interfaces to the internet, is set to be transformative for a range of industries and relationships in general. Longer term transformational trends include Brain-to-Computer Interfaces, Autonomous Vehicles, Cognitive Computing, Advanced Robotics and Smart Machines, all of which may deeply transform the relationship between work and society. 

Top 20 technologies impacting CxO agenda’s

High impact technology trends, in the short term, include Cloud Based Service Integration, Web-Scale Computing and Blockchain, with the latter in particular earmarked to disrupt the payments industry within the financial services space. Longer term trends include Self-adaptive Security, which moves emphasis from protection to real-time detection and response that adapts defences immediately; Quantum Computing, which leverages the q-bit; and Biocomputing, which uses biological material to perform computations. Other technologies, with medium and low impacts for business include Open Source Hardware; Digital Workspaces, including asynchronous messaging, real-time voice and video communications, Screen Shares; and Trusted Devices, which provide terminals and software powered objects and machines that are made secure and trustworthy in order to protect data and process availability, integrity and confidentiality.

Other technological advancements highlighted by the authors as a top 20 trend include: NFC, Biometrics, Digital Signage, Cloud Service Integration, In-Memory Computing, Advanced Data Visualization, IPv6, Open Source Hardware, Web-scale Computing, LPWAN, Trusted Devices, Edge Computing, Semantic Technologies, Natural User Interfaces, Wearable Computing, Location-Based Services NG, Immersive Experience, SDx, Containers, WebRTC, Distributed Social Networks, 5G, Swarm Computing, Autonomous Vehicles, Memristors, Ubiquitous PIM, Wireless Power, Context Broker, Fabric-Based Computing, Exascale, Virtual Assistants, Privacy-Enhancing Technologies.



Four ways digitalisation is transforming car brands and dealers

16 April 2019

From changing expectations from the customer to new stakeholders entering the industry, the digital transformation of global automotive industry means it is facing the wholesale transformation of its business model. In a new white paper, global consulting partnership Cordence Worldwide has highlighted four major digital trends that are transforming the relationships between car brands and dealers with consumers.

With digital transformation drives booming across the industrial spectrum, automotive groups are no different in having commenced large digital transformation programmes to improve productivity, efficiency, and ultimately profitability. Falling sales figures mean the automotive sector is facing an increasingly difficult road ahead, something which means companies in the market are even more hard pressed to find new ways to improve their bottom lines.

While it offers major opportunities, the industry’s move to digitalise is not without complications. It has triggered a series of major internal changes, which have presented automotive entities with the challenge of becoming a “customer-oriented” industry. A new report from Cordence Worldwide – a global management consulting partnership present in more than 20 countries – has explored how automotive companies are navigating the rapidly changing nature of digital business.

New business models

The level of change likely to be wrought on the automotive industry by digitalisation is hard to overstate. Automation could well lead to significant reductions in the number of accidents, higher vehicle utilisation and lower pollution levels, while leading to a $2.1 trillion change in traditional revenues, with up to $4.3 trillion in new revenue openings arising by 2030.

As a result of this colossal opportunity, it is easy to see why almost all automotive groups now have digital departments, with generally strong communication within the digital transformation and the customer approach. The changes to society which this may have are potentially distracting automotive firms from the change it is leading to in its own companies though, according to Cordence’s paper.

The automotive market is dead, long live the mobility market

Because of this, the sector’s business model is set to transform over the coming decades. With digitalisation speeding up the appearance of concepts such as car-sharing, a subscription package model will likely become more palatable. At the same time, car and ride-sharing models will cater to the sustainability criteria of millennials, who will rapidly become one of the automotive market’s leading consumer demographics in the coming years.

Antoine Glutron – a Managing Consultant with Cordence member Oresys, and the report’s author – said of the situation, “These ‘old school industries’ are now working on creating new opportunities, but in so-doing are facing challenges and threats: new jobs, new technologies, new ecosystem of partners, necessary reorganisation, different relationship with customers, and even new businesses. The customer approach topic is in fact a real challenge for car companies as it implies changing their business model and adjusting their mind-set to address the customer 4.0: from product-centric to customer-centric, from car manufacturer to service provider.”

Digital customer experience

In the hyper-competitive age of the internet, even top companies face an uphill challenge when it comes to holding onto customers through brand loyalty. Digital disruption has resulted in changes to consumer behaviour, which is forcing a range of marketing strategists to reconsider their old, possibly out-dated strategies. As modern customers wield an increasingly impressive array of digital tools and online databases, they and are now able to quickly and conveniently compare prices, check availability and read product reviews.

The automotive sector is no exception to this trend, according to the study. In order to adapt to the needs of the so-called ‘customer 4.0’, car companies will increasingly need to change their business model and move away from product-centric companies to customer-centric ones, from car manufacturers to service providers.

Glutron explained, “As an automotive company, you can no longer expect customer loyalty simply with good products; you must conquer and re-conquer a customer that “consumes” your service. The offer now has to be global, digital and personalised. Your offer has to be adapted to this customer’s needs at any given moment. A key issue related to data control is to build customer loyalty by creating a customer experience 'tailored' throughout the cycle of use of the 'car product': purchase, driving, maintenance and trade-in of the vehicle.”

One way in which the sector may be able to benefit from this desire for a tailored experience is via connectivity. Consumers are generally positive about new connective features for automobiles, and many are even willing to pay upfront for infotainment, emergency and maintenance services. Chinese consumers, where the connected car market is set to hit $216 billion, are already particularly interested in paying a little more for navigation and diagnostic features in their future new car. This can also enable automotive companies to exploit a rich vein of customer data, enabling them to rapidly tailor their offerings to consumer behaviour.

New automotive segments

Digital transformation has also brought with it the rise of completely new application areas. As mentioned earlier, the most well-known example is the autonomous or self-driving car, where the last steps forward were not taken by major automotive groups but by technology companies such as Tesla. While this may have given such firms the edge in the market briefly, a number of keystone automotive names will soon be set to take the plunge into the market themselves, leveraging their car manufacturing prowess and huge production capacities to their advantage.

Before companies rush to invest in this market, however, it is worth their while to remember that the readiness and uptake for such vehicles differs greatly geographically. For example, following a study published in 2018, 92% of Chinese would be ready to buy an autonomous car, compared with only around 35% of drivers in France, Germany and US. Meanwhile, the infrastructure of different nations will also be significantly less accommodating of the new technology.

Use digital for steering thr activity

Elsewhere, Cordence’s analysis has suggested that hooking the cars of tomorrow into the Internet of Things is also likely to see a rapid change in the business model for car maintenance, providing real-time diagnostics for problems. This presents chances for partnerships to improve the connectivity of cars, especially with tech companies; for example, PSA partnered with IBM for a global agreement on services in their vehicle. Meanwhile, data could also be sold to other parties with an interest in this data, such as the government, which could use it to manage traffic levels, or ensure that only adequately maintained vehicles take to the road.

Glutron added, “With the increase in the amount of client data and connected opportunities, the recommendation is to set up data-centric approaches. The value is now in the customer data. The general prerequisites are to rework the data model and the Enterprise Architecture and generally build up a data lake including data from all sources (internal and external, structured and unstructured).”

From automotive to mobility

Relating further to the idea of connectivity, the report claimed that automotive firms must now adjust their models in line with the provision of end-to-end mobility, rather than treating the sale of a car as an end point in their relationship with the customer. In order to realise this transformation, transformations are likely to become more and more important.

A network of partner companies means automotive firms can provide a global mobility experience. As the vehicle is increasingly connected to its environment, new partners can also be cities, governments, and other service providers within the global mobility services industry in which the car brands want to take part.

According to the study, the target is clear. Companies must look to a holistic transport service, offering to move customers from A to B in a unique and pleasant way – otherwise they might as well take public transport. At the same time, they should extend the services reachable “on-board” (especially the enhancement of the connectivity between the car and smartphones or other connected devices), and reach high standards in terms of user experience (online sales, online payment, customised experience during and after the use of the car).

Concluding the report, Glutron stated, “These mobility market transformations could be considered a threat for the car manufacturers. Quite the opposite: if they take up the challenge and review their business model so that they become the service provider – communicating no longer to a driver but to a ‘mobility customer’ – they can then take advantage of their expertise and their position as a historical player. The most convenient means of transport are cars, and building a car is highly-skilled work.”