Digital. Disruptive. Deep in data. 2015 certainly kept many executives awake at night. In one short year, we witnessed the arrival of new businesses that own nothing and earn millions. Another crop of iconic brands disappeared, succumbing to the effects of mergers and acquisitions or the competitive muscle and creativity of digital darlings. And as the need for natural resources escalates, climate change and drought conditions continue to widen the gap between supply and demand.
No business can afford to continue down this path. In fact, a study from the John M. Olin School of Business at Washington University estimates that 40% of today’s FORTUNE 500 companies on the S&P 500 will no longer exist in less than 10 years.
What’s needed is a meaningful focus on resource optimization – and 2016 may be the year to do just that.
New trends that will change your resource optimization strategies
According to the recent report IDC FutureScape: Worldwide Digital Transformation 2016 Predictions, IDC foresees three trends that may change how businesses look at their resource optimization strategies:
- 22 billion Internet of Things (IoT) devices installed by 2018, driving the development of over 200,000 new IoT apps and services.
- More than 50% of developer teams will embed cognitive services in their apps (vs. one percent today), saving U.S. enterprises over $60 billion annually by 2020.
- Over 50% of enterprises will create and/or partner with industry cloud platforms to distribute their innovations and source others’.
When I read these predictions, three things came to mind: continuous intelligence, continuous innovation, and continuous optimization. By linking digital technology to analytics-driven decision making in every area of the business, companies have an opportunity to evolve and better understand and serve their customers.
Why wait and see whether IDC’s predictions hold true? Take a look at five areas that you can impact now with digital technology.
- Asset management: Fixed assets can take up as much as one-third of all operating costs. As the use of IoT sensors and devices continues to grow, continuous monitoring will become the norm. As a result, companies can adjust the routing of its fleet and logistics process, drive down production downtime, and forecast production and operational demand more accurately. Once the data generated from these devices is shared across the entire business network, companies can help their external partners, suppliers, and other third-parties create a relationship that value continuous performance improvement and innovation.
- Teamwork and collaboration: Through digital intelligence, machine automation, and robotics, workers can expand their ability to increase efficiency and make real-time decisions that can directly impact business outcomes.
- Customer experience: There’s no debate that the proliferation of the digital channel is radically changing how companies engage with customers. Brands can directly impact the entire customer experience; from the first Google search to product and service delivery, businesses can transform passive customers into loyal advocates.
- User adoption: The beauty of Big Data is that there is no longer an excuse for creating goods and services that customers do not want. The rise of social media and lowering inhibitions in providing personal information are empowering businesses to improve offerings and innovate in step with customer needs and wants. By using this digital intelligence, brands can proactively impact the mass-market appeal adoption of their products and services.
- Environmental impact: Customers are more conscious about the environmental effects of the goods and services they use. More important, brand perception is directly tied to this criteria. In his blog “The Meaning – And Opportunity – Behind the Internet of Things,” Kai Goerlich states, “As decision makers receive information from direct and indirect environments, they can scan for precise navigation, logistics, weather prediction, agricultural planning, and pollution management, for example. By combining this streaming information with existing data, companies can create new insights and develop new products and services.”
As the next chapter of the digital economy unfolds this year, the business world finds itself at an inflection point. Some will rapidly scale their digital transformation to thrive in this new world. Others will operate “business as usual” and hope for the best. Which way will your business go?
For more thoughts on the impact of digital transformation, check out Kai Goerlich’s blog “The Meaning – And Opportunity – Behind the Internet of Things.”