During the last year it became obvious that digitization is speeding up, and in 2016 we expect that its impact on our societies and economies will further increase. As a result, some trends and effects will become clearer this year and we’ll also start to see new ones, like the things I’ve outlined below.
1. More radical (digital) business strategies
Digitization will lead to faster changes in 2016, and more organizations will start re-inventing their business strategies to get out of classical industrialization and into the next industrial revolution. In addition, we will see more digitization-related functions in companies, such as the chief digitization officer (CDO).
2. More resources will get more volatile
We’ve already observed with oil and gas prices how fast and furious the globalized world can react on resource fluctuations. With more expected weather extremes and increasingly large resource footprints, we can expect significantly higher volatility in 2016, forcing companies to save and replace resources and to expand their supply networks.
3. Sustainable business will kick off
The UN conference on climate change in Paris and the recent World Economic Forum in Davos clearly show that climate change is on the agenda. IT might help, but it will definitely need to get out of the old resource dependencies and use patterns. I think 2016 will be the year when – besides some early movers – more companies will start reducing their ecological footprint and evaluating approaches, such as the circular economy, to stay competitive.
4. Industrialization goes platform
Industry will rebuild its infrastructure for the next round of digitization and start building up more platforms for Industry 4.0, robotics, and IoT. We will hear more buzz around autonomous robots, machine learning, and fully integrated production in 2016.
5. To print or not to print
There’s no doubt that 3D printing has all the potential to be disruptive, but it seems that it is more an evolution than a rush. In 2016 companies will find more use cases, but otherwise cautiously evaluate the impact on product quality and supply chains.
6. More discussions around jobs, skills, and employment uncertainty
Increasing automation threatens to wipe out a substantial portion of the middle-class jobs from old industrialization. Whether enough new jobs can be created, and which ones they may be, will be one of the biggest political discussion in 2016. It seems we need new concepts and we will hear more from experiments around basic income this year. On the same level, companies and countries have to address the ongoing skills gaps between old and new economy jobs and the increasing pressure on employees to acquire new skills and work in more precarious jobs.
7. Pragmatic IoT use cases
This year IoT will finally get out of the tech niche into mainstream business, as more companies will start exploring the business potential with concrete use cases. After the mythbusting, we may see clearer where and how IoT will expand or significantly change business processes, which things are getting a digital boost first, and where devices will play an even bigger role. We expect more remote maintenance and digitized assets but some unexpected surprises as well.
8. Customer experience across all channels
Companies will step up their efforts to offer a lighter shopping experience and close the gap between digital and physical. We will see more digitization in stores by using beacons, near-field technology, augmented reality, and virtual reality in exploration mode. Helping customers find what they are really looking for will get more important.
9. Finding patterns in a growing data pile
The struggle will go on in 2016 to separate the necessary from the unnecessary data, and companies will focus more on real-time and live business processes. We will hear more about AI and machine learning from Hadoop, in memory, and algorithms, and security and privacy issues.
10. Software factory
The future of business IT will look more like a smartphone’s business process app than the old ERP we know. This year we will see more organizations using microservices to more freely select and combine their business functions from a menu of services and a variety of third-party vendors.
11. Internet reloaded
The Internet is one of mankind’s greatest inventions, but trolling, censuring, and the decline of independent media is starting to become a threat for democracies. We will see more discussion around this in 2016 – and hopefully some solutions.
12. The new smart what?
The touch-screen smartphone is nearly 10 years old, so we might start looking for a substitute this year. A hint: it may not be a solid thing anymore.
For more insight on the impact of digitalization, visit discover.sap.com/hana.