Those driving the most success will be able to handle data and implement technologies that drive value for customers first and foremost.
The disruption caused by the pandemic was unprecedented and accelerated digital transformation across industries. We’d hardly recognize the way many people do business from just a few years ago. A recent report from IDC acknowledges these changes but offers an interesting perspective on the progression of digital transformation: leveraging existing structures in entirely new ways. Let’s explore what could be coming in the next few years.
IDC’s research shows that organizations embracing enterprise intelligence show faster rates of innovation. That’s not surprising. However, as regulations change and the post-pandemic “new normal” continues to progress, companies will need greater rigor, efficiency, and ethics to get their digital picture just right. IDC’s top ten predictions are:
- Prediction 1: By 2024, the top 5 companies in each sector will use technology to innovate their way out of a global crisis.
- Prediction 2: By 2026, 10% of companies will successfully incentivize consumers to share closely held data to devise nontraditional offerings, improve customer experience, and grow market share.
- Prediction 3: By 2024, 35% of businesses that build innovative algorithms to glean intelligence from unique data sets will deliver successful new product offerings and pricing models and tap new customer segments.
- Prediction 4: By 2028, new efficiencies will allow developers to increase the share of time they spend on innovation from 25% of their development-related work to 75%.
- Prediction 5: By 2028, recurring revenue from smart products will make up 65% of revenue for companies that sell “dumb” and “smart” versions of the same products.
- Prediction 6: By 2026, 75% of market leaders will have systemic, structured digital innovation programs and investments that support ongoing iterative innovation, enabling growth, scale, agility, and resilience.
- Prediction 7: By 2026, companies that share data with business partners to leverage their collective data sets for new revenue potential will grow revenue 10% faster than those that don’t.
- Prediction 8: 85% of CEOs of the G2000 will demand senior leaders deliver data-driven insight into innovation activity, including developer efficiency and business outcomes, by 2025.
- Prediction 9: In 2027, the share of non-technology-focused people in companies who will spend 10 hours or more a week contributing to digital innovation will grow from 5% today to 45%.
- Prediction 10: In 2028, 15 large companies will make headlines for using digital technologies to manipulate customer experiences to spur upgrades and replacements.
See also: Data: The Competitive Differentiator for Innovation
Building new relationships with consumers will be the focus
According to Prediction 2, companies will begin incentivizing customers to share closely held data in exchange for better customer experiences and nontraditional products and services. In addition, Prediction 3 believes that at least 35% of businesses will be turning data into new market shares and better customer experiences thanks to cutting-edge algorithms.
Combined with Prediction 7—that companies sharing critical customer data with trusted partners will perform better than those who don’t—we could see a new era of data availability and trust. Companies will need to build trust with consumers through new strategies, but those that successfully build these relationships will be able to access customer data despite an overall trend toward greater privacy.
Using technology and data to build new markets and offerings
Prediction 5 sees companies leaning into recurring revenue streams from smart products. In addition, Prediction 1 demonstrates the value of technology in pivoting through future global disruptions. Companies have often relied on recurring revenue, but cutting-edge technology is building new avenues for businesses struggling to meet expectations through their previous physical products. One example is Apple, a company that has bolstered slower device sales with new subscription revenue models.
The pandemic may have accelerated these transformations, but IDC is confident that companies continuing down this path will see massive gains in the coming years. Technology streams allow businesses to reimagine what they offer, how they offer it, and how they pivot when circumstances change.
Technology will not only speed up innovation, but the time spent on innovation will increase
Prediction 6 sees most market leaders having the technology to support continuous innovation. This includes growth, scale, and resilience. These leaders will deploy technology to speed up time to market, create more efficient development cycles, and infuse data-driven feedback at every step in the iteration process.
Part of what makes this possible is Prediction 4, which sees technology increasing the time developers spend on innovation from just 25% of their time to 75% of their time. This drastic increase over the next few years will give companies more leeway to experiment successfully and decrease development times. And considering previous predictions about customer relationships, companies that leverage this successfully will be able to offer more valuable products and services faster without sacrificing quality.
More people will be involved in the process and have benchmarks tied to technology outcomes
The final two predictions see technology taking a more prominent role in the benchmarks of decision-makers, as well as in the day-to-day activities of non-tech employees. Prediction 8 sees most CEOs of the G2000 demanding senior leaders deliver data-driven insights into initiatives leveraging these technologies. IDC expects this to happen in just three short years, and smaller companies could follow suit as more value unlocks with cutting-edge tech.
In addition, even those in a non-tech department or field will contribute more to innovation. Prediction 9 will see the number of people spending more than 10 hours per week contributing to these innovation activities will increase from just 5% to 45%. With everyone focused on technology-driven innovation, more large companies will make headlines for using technology to spur upgrades and replacements in pursuit of the perfect customer experience (Prediction 10).
Winners and losers will be determined by the deft handling of new technology
IDC believes that even if the pandemic never happened, increasing disruptions due to war and other economic factors would still place companies in the same position. Those driving the most success will be able to handle data and implement technologies that drive value for customers first and foremost.
More people will become data and technology literate thanks to the demands of the current business paradigm. And delivering digital innovation at scale—repeatedly, without sacrificing ethics or sustainability—will be one of the most significant factors in determining which businesses survive the next ten years and which can’t adapt.