Market forces impacting your planning for 2017 — Part II: Technology trends
Here’s a stark observation: All companies will become technology companies someday.
We are at a tipping point. Machines are ready to replace humans. Meanwhile, the convergence of different technologies — including artificial intelligence, machine learning, virtual reality, cloud technology, relational database and the Internet of Things (IoT) — is going to impact companies in ways that we are just beginning to understand.
We’re already feeling this impact in our personal lives. Consider, for example, how technology impacted a recent trip that I took with my wife to Las Vegas: Uber picked us up at the airport and dropped us off at our hotel for about 40% less than a typical cab fare. At our hotel, we used a kiosk to check in and get our keys. Walking through the casino, I imagined all the algorithms at work, predicting the probability of every transaction and providing big data on our movements within the hotel.
Technology is poised to create the same kind of disruption in organizations. Therefore, every Vistage member should be asking, “How will we survive in a world driven by algorithms?”
To help you prepare for the future, consider the following technology trends for 2017.
Virtual reality is gaining momentum.
Samsung is slated to sell over 2 million virtual headsets next year[i]. By 2025, virtual/augmented reality is expected to be a $100 billion market, rivaling the size of the PC/smartphone market. At the same time, virtual/augmented reality software is catching up to hardware. As with the case of Pokémon Go, new technologies are emerging that allow content to lay over traditional media.
Virtual reality has the potential to impact B2B companies in many different ways. Imagine a world where:
- Virtual reality training programs allow new employees to walk through a facility, practice safety techniques or receive on-the-job training through a device worn like a mask.
- Remote operation of heavy equipment (such as excavators) expands access, lowers costs and improves safety.
- 3D business meetings enable users to act and move as if they are in a physical meeting room.
- Virtual storefronts allow consumers to try on clothes and garments, and custom-tailored garments are shipped on demand.
- Remote health care allows surgeons to perform intricate, specialized surgeries from anywhere in the world.
Artificial Intelligence and machine learning have made great gains.
We are on the brink of a new frontier where systems can learn, adapt and think for themselves — as opposed to making decisions based on predesigned instructions.[ii]
The combination of greater processing power and more sophisticated algorithms will open up new possibilities. For example, consider how voice-activated virtual assistants (think Siri or Alexa on steroids) could help busy executives manage a variety of tasks; the assistant might, say, capture content that an executive dictates to it and then edit and store it for others to consume. The continuity offered through this process is known as Ambient User Experience.
Technologies that are part of the Internet of Things (IoT) are also growing more “intelligent.” They can collaborate with other devices, such as Alexa, to command your music, air conditioning or security based on what they “learn” about you.
We need to hire cutting-edge talent in marketing and technology.
According to Forrester Research, the shift toward digital business is forcing companies to reevaluate their talent. Traditional skill sets will not apply in a world where customers fire you based on a single bad experience, or to save 3-4%. Chief Marketing Officers and Chief Information Officers who are unable to shift toward omni-channel marketing and data analytics[iii] will be replaced by younger, nimble technologists who can pivot quickly.
In addition, technologists will have to deliver real-time information to finance and management teams that need customer and product-level information. If your IT department consists of the people who used to fix the copiers, they are not going to survive this fundamental paradigm shift.
The big data floodgates will open.
Faster processing speeds and relational databases provide an environment where companies will finally realize the potential of big data. Driven by a need for deeper customer engagement, devices such as mobile, wearable and IoT will drive behavior and analytics[iv].
Investing in technologies that improve efficiency or reduce cost is no longer good enough. As Vistage member companies forge ahead, their integrated systems will permit them to compete more readily with large companies and provide meaningful analytics that will enrich the customer experience.
Consider big data’s utility in health care today. The Centers for Disease Control uses big data to curb illnesses, and physicians use it for chronic disease management. With technologies such as wearables, health care robots, artificial intelligence and IoT exploding onto the scene, the health care IT infrastructure is strained (electronic medical records are still only 3-4 years old[v]). But within a few years, medical science will become more equipped to digest troves of patient data gathered from multiple fronts.
The robots are here.
To date, robots have been used primarily to replace remedial, repetitive tasks in manufacturing environments and the like[vi]. But a confluence of recent technological advancements, such as richly engineered software and faster processing speeds, offers something unprecedented. Today’s robots are capable of spatial reasoning and situational awareness. In other words, they can think for themselves[i]. While it may be an inconvenient truth, robots who can replace labor at $4 per hour will take on a bigger role in our economy. In Manila, more than 1.2 million call center jobs that were once high-end technology careers, such as network monitoring, have been replaced by robots[ii].
The next generation of robots will, for the first time, conduct tasks that were once reserved for surgeons, nurses and other jobs that require human judgment. New materials are making robots lighter and more compact. For instance, nano-robots are smaller than a pebble and are capable of performing medical procedures unmatched by doctors.
Follow the money.
Venture capital is actually moving away from technology, as the sector has not delivered the sizzling returns of the ‘90s. Apple’s revenue was down 9% last quarter in the face of cheap competition from Chinese smartphone manufacturers. Bloomberg’s U.S. Startups Barometer, an indicator of investment in early-stage companies, was down 21% this time last year[vii]. Many technologies are facing competition for the first time. In Q1 and Q2, Uber lost over $1 billion. To boot, the largest technology companies, such as Amazon, Facebook, Google and Uber, all face significant regulatory scrutiny in Europe[viii].
eCommerce and procurement will go omni-channel.
Procurement is undergoing a radical shift, as professional procurement organizations embrace eCommerce and eProcurement. Companies are integrating ERP, invoicing and eCommerce platforms that make transactions more seamless.[ix] Data collected from multiple sources will translate into more meaningful analysis for buyers and sellers.
IoT sensors can predict what needs to be procured in advance. Consider the possibilities for customized offers within B2B environments, much like Amazon recommending complementary items on their B2C platform.
Security is fluid and adaptive[x].
Ransomware is a billion-dollar business and growing[xi]. Cybercrime is no longer just a nuisance. According to AT&T, 73% of surveyed American companies were victims of ransomware attacks in 2015.
With the proliferation of systems and devices (including hundreds of thousands of IoT devices), cybercriminals have more points of entry. Cyberattacks are only expected to increase. Security experts point out that Adaptive Security Architecture is required to fend off multilayer attacks, including targeted espionage, ransomware, denial of service and privacy.
The adoption of new technology isn’t slowing, either. In fact, disruptive technologies are accelerating in many sectors. As 5G comes online by 2020, mobile processing speeds are expected to increase 10x-100x, which will enable even faster computing.
So keep investing in technology, and make sure you have the right people to navigate the digital mashup. Hang on — it is going to be a wild ride.
[i] Making VR Better, Bloomberg Businessweek
[ii] Gartner’s Top 10 Strategic Technology Trends for 2017, Forbes
[iii] Forrester Predictions: 2017 Is a Year of Action
[iv] Forrester Predictions: 2017 Is a Year of Action
[v] Big Data, Artificial Intelligence, IoT May Change Healthcare in 2017, HealthITAnalytics.com
[vi] Robots on Track to Bump Humans from Call-Center Jobs, The Wall Street Journal
[vii] The Slow-Motion Bust, Bloomberg BusinessWeek
[viii] Euro Trip to Hell, Bloomberg BusinessWeek
[ix] IoT, Big Data and The Tech Fueling Better B2B eCommerce, Pymnts.com
[x] Gartner’s Top 10 Technology Trends for 2017
[xi] Cybercrime A Billion-Dollar Industry Bloomberg Businessweek