The 2020s will be defined by how companies transform their business to address changing circumstances, writes Darren Roos, CEO of IFS.
The pandemic has brought new urgency to business decisions that will affect how we live and work in the years ahead.
Companies need to completely rethink how they use digital tools and how they can help them to approach their customer, user experience and employee. The 2020s will be shaped by how companies transform their business to meet changing realities - becoming more agile and ensuring their longevity.
In what follows is a summary of some of the trends and challenges our customers are facing, perhaps offering a new perspective on a new decade that has got off to a bumpy start.
The business becomes a "remote everything" as servitisation (again) steps to the fore
The manufacturers' interest in transforming their traditional products into services is not a new trend. Industry experts, including those who work at IFS, have been surveying servitised business scenarios for many years. Although its importance would not have been reduced in a corona-free world, servitisation has gained relevance among decision-makers in the manufacturing industry and elsewhere as a result of the Covid-19 pandemic. According to research firm Gartner, by 2025, more than 50 per cent of device manufacturers will offer outcomes-based service contracts that rely on IoT connectivity. In 2019, it was still less than 15 per cent.
Given these predictions, it is not surprising that the global exceptionalism we have all been grappling with since last year has led businesses to adopt a "remote-everything" mentality, even those that are far outside traditional service delivery and whose businesses are servitised by design.
Composable Enterprise creates space for new opportunities and agile businesses
What is meant by this is the concept of a "composable business" - what Gartner also calls a "composable enterprise".
Instead of buying large and unwieldy sweeps of applications such as Enterprise Resource Planning (ERP), Enterprise Asset Management (EAM), Human Resources (HR), Customer Relationship Management (CRM), etc., a composable business approach focuses on selecting a portfolio of heterogeneous applications from a range of best-of-breed solutions.
It's about composing your own set of digital tools that help your business be more nimble, move faster, deliver faster, and most importantly, realise faster time to value to make room for new business models.
Given what is at risk, it can be predicted that the adoption of composable business will be a matter of survival for companies in their early to mid-twenties.
Robots will rule the earth
Automation in a business technology context will experience an explosive growth over the next three to four years.
As artificial intelligence (AI) capabilities become more sophisticated, so does the ability to automate processes. In fact, Gartner predicts that by 2024, companies will reduce their operating costs by 30 per cent by combining hyper-automation technologies with redesigned operational processes. This implies new business models, new back-end processes and the use of automation in the form of Robotic Process Automation (RPA) and, of course, AI. With all of the above underpinned by the ubiquity of mobile, will any business be able to exist outside of this technology? Are all or even most companies ready for this change?
Prepare for the moment when it all comes together
While IoT, AI, RPA and digital transformation are concepts that have been on everyone's lips for a long time, the next phase will be when all of these need to coalesce into meaningful solutions that are delivered out-of-the-box as native and embedded application services.
What will lead us to this next phase is the realisation by companies that the true value lies in the total experience.
Think about the experiences you have had with companies you buy from and what distinguishes certain companies from others. Think about the moment you unpacked your new smartphone, the moment your last flight landed on time, or maybe the moment you picked up a new car.
These are all different scenarios, but the common denominator is that there is a moment when a company has to bring everything together: when the supply chain is working effectively, the choice of materials is paying off, the production process is performing as expected and, of course, the moment when all the after-sales elements have to kick in.
These moments are the moments of service for customers and the moments when you are there for your customers. Given the complexity involved in their delivery, are companies properly equipped and able to deliver these moments? What do success and failure look like in this context and what makes them different from others?
