Gartner has revealed its top predictions for IT organisations and IT users for 2015 and beyond at its annual Gartner Symposium/ITxpo. The predictions for 2015 examine a shift in the relationships between man and machine due to the emergence of digital business.
For some time now, there has been an on-going shift in the roles machines play in our everyday lives.Compute-based machines are now being used to create an ever expanding variety of experiences that extend human endeavours. Machines are taking on more human characteristics in order to affect a more personalised relationship with human beings and we find ourselves contemplating a near-term future of a world in which machines and humans are co-workers, and possibly even co-dependents. The top 10 predictions envelop these ideas of human machine cooperation and growth.
More key digital business jobs
By 2018, digital business will require 50% less business process workers and 500% more key digital business jobs, compared with traditional models.
Near-term flag – By year-end 2016, 50% of digital transformation initiatives will be unmanageable due to lack of portfolio management skills, leading to a measurable negative lost market share.
The rapid evolution of social media and mobile technologies is driving consumer behaviour. These behaviour trends and supporting technologies will significantly change how we live and go about our daily lives. For example, refrigerators will order groceries, robots will have them collected and drones will deliver them to your door, eliminating the need for grocery clerks and delivery drivers. This new digital business environment will profoundly change business processes along with the employment demographics and the need for higher competencies both for the consumer and the providers across all industries.
Ripe for digital disruption
By 2017, a significant disruptive digital business will be launched that was conceived by a computer algorithm.
Near-term flag – Through 2015, the most highly valued initial public offerings will involve companies that combine digital markets with physical logistics to challenge pure physical legacy business ecosystems.
The world economy has become ripe for digital disruption, as evidenced by global marketplace companies such as Uber and Airbnb. Since such businesses exhibit network effects (i.e. their value increases with each new participant) they tend to form natural monopolies, but are challenged by complex regulatory and marketplace dynamics, which makes them amenable to computational analysis. Meanwhile, the wealth creation upside of success in such models (valuations in the tens to hundreds of billions for companies less than five years old) represents an attraction for capital investment.
Shift from a labour-driven and technology-enabled paradigm
By 2018, the total cost of ownership for business operations will be reduced by 30% through smart machines and industrialised services.
Near-term flag – By year-end 2015, there will be more than 40 vendors with commercially available managed services offerings leveraging smart machines and industrialised services.
Consumers’ need to get faster, cheaper, better products and services in a mode that supports any time, any place and any channel is fuelling the digital business revolution. Business processes and the entire value chain of business operations will shift from a labour-driven and technology-enabled paradigm to a digital-driven and human-enabled model. Smart machines will not replace humans, as people still need to steer the ship and are critical to interpreting digital outcomes.
Thus, smart machines will not replace labour; rather they will displace the complacency, inefficiency and add tremendous velocity to business operations. With consumers’ preference to use internet and mobile services to drive business efficiencies and optimise time management, every industry is striving to improve the customer experience by simplifying, automating and making more intelligent end-to-end processes, minimising manual interventions and allowing the consumer to self-serve.
Mobile digital assistants
By year-end 2016, more than $2-billion in online shopping will be performed exclusively by mobile digital assistants.
Near-term flag – By year-end 2015, mobile digital assistants will have taken on tactical mundane processes such as filling out names, addresses and credit card information.
Fixed events such as grocery replenishment will be common and will build trust for these types of assistants to take on more. By year-end 2016, more complex purchase decisions such as back-to-school backpacks and chained events such as scheduling: a highly rated, date-type movie along with dinner and car pick up on an anniversary will be easily achievable. Yearly autonomous mobile assistant purchasing will reach $2 billion dollars annually, representing about 2.5% of mobile users trusting assistants with $50 a year. Digital assistants will be on multiple platforms, but mobile will be the most accessible, adopted device for digital assistants and will be the killer application by year-end 2016.
Increasingly powerful smartphones and tablets
By 2017, US customers’ mobile engagement behaviour will drive mobile commerce revenue in the US to 50% of US digital commerce revenue.
Near-term flag – A renewed interest in mobile payment will arise in 2015, together with a significant increase in mobile commerce (due in part to the introduction of Apple Pay and similar efforts by competitors, such as Google increasing efforts to drive adoption of its NFC-enabled Google Wallet).
Increasingly powerful smartphones and tablets, and the correspondingly rich and powerful applications available for each, enable consumers and business customers to interact seamlessly with companies, content and commerce experiences at virtually all stages of the purchase process.
As device manufacturers and application developers improve usability and functionality and address users’ security concerns, devices will become even more of an essential tool for customers. This is particularly true of the younger demographics. Customers, who were born and grew up utilising the internet as a communications, information and transaction platform, and tethered to their mobile devices, will demand that service providers and retailers deliver on the expectation of connected and channel-agnostic commerce experiences.
Customer experience innovation
By 2017, 50% of consumer product investments will be redirected to customer experience innovations.
Near-term flag – By 2015, more than half of traditional consumer products will have native digital extensions.
In many industries, hyper-competition has eroded traditional product and service advantages, making customer experience the new competitive battlefield. This is no truer than in consumer products markets, which face disproportionate commodity pressure as consumer access to pricing and product information via search and social channels undermine brand loyalty.
The reality is that focusing innovation on new products – and even new business models – is subject to shrinking periods of competitive advantage. Competitors and alternatives abound and product innovation is subject to accelerating commoditisation. Customer experience innovation remains the secret to lasting brand loyalty.
3D printing enables personalised product offerings
By 2017, nearly 20% of durable goods e-tailers will use 3D printing (3DP) to create personalised product offerings.
Near-term flag – By 2015, more than 90% of durable goods e-tailers will actively seek external partnerships to support the new “personalised” product business models.
3DP is already having a profound impact on enabling start-ups to reduce infrastructure costs, compared with existing traditional manufacturing processes. As consumers increasingly show an appetite to control more product features and capabilities, e-tailers are recognising the business potential of moving from “configurable” products to “personalised” made-to-order products enabled by 3DP.
Almost every single durable goods category will see a surge in 3DP-enabled personalisation and manufacturers will develop capabilities for bringing the consumer closer to the design experience. The companies that set the strategy early will end up defining the space within their categories. This requires a corporate culture that is supportive of non-conformance products, new front office “concierge” business capabilities, and back office IT and operations skills. It will require a new agility that goes beyond rigid process automation, and may require entirely new business systems.
Internal positioning systems
By 2020, retail businesses that utilise targeted messaging in combination with internal positioning systems (IPS) will see a 5% increase in sales.
Near-term flag – By 2016, there will be an increase in the number of offers from retailers focused on customer location and the length of time in store.
Digital marketers are increasingly focusing on mobile advertising and advanced analytics to take advantage of the rich opportunities presented by the growth of mobile device usage. Context is playing an increasingly central role in these efforts, enabling highly targeted ads based on recent purchases, buying habits, city of residence and interests. But amid all of this data, a customer’s current location is among the most important of contextual cues available.
Mapping is being exploited by digital marketers, but is still used in relatively simple ways. Recently, however, indoor positioning systems have become increasingly viable. Rather than using satellites, these systems use low-energy Bluetooth beacons and wi-fi access points to pinpoint a mobile device’s location inside a building, with accuracies in the centimetre range. Support within newer mobile devices for IPS will enable location cues for targeted ads and messages, and real-time mapping to lead customers not only to store locations, but to specific products themselves.
Deliberately unstable processes
By 2017, 70% of successful digital business models will rely on deliberately unstable processes designed to shift as customer needs shift.
Near-term flag – By the end of 2015, 5% of global organisations will design “supermaneuverable” processes that provide competitive advantage.
As a result of business model innovation, some business processes must now be deliberately unstable. Deliberately unstable processes refer to processes that are designed for change and can dynamically adjust according to customer needs. These supermaneuverable processes exist within the context of larger, more stable processes. They are a competitive differentiator because they can support customer interactions that are unpredictable and require ad hoc decision-making to enable the larger, more stable processes to continue.
The ability to change faster will leverage the concepts of organisational liquidity. This holistic approach, blending business model, processes, technology and people will fuel digital business success.
Wearable monitors hold huge promise
By 2020, developed world life expectancy will increase by 0.5 years due to widespread adoption of wireless health monitoring technology.
Near-term flag – By 2017, costs for diabetic care are reduced by 10% through the use of smartphones.
Wearable monitors hold huge promise. Today, a simple wristband can collect heartbeat, temperature and a number of environmental factors. Wireless heart monitoring patches, smart shirts and sensors in accessories promise more accuracy, choice and comfort to wearers. Transmission through wireless is straightforward. Data can be correlated against large cloud-based information repositories for sanctioned actions and through social networks for anecdotal advice. Gartner expects data from remote monitoring devices to provide continued access from patients to medical practitioners.