New Series Outlines Suggestions for Technology CEOs to Tackle Looming Megatrends and Thrive in New Digital Reality
The accelerated pace of business disruption is being triggered by the impact of new technologies combined with the challenges and opportunities of creating a connected experience, which are bigger than ever before, according to a new PwC report, The new digital ecosystem reality: Nine trends rewriting the rules of business. The nine trends outlined in the report are too inter-related to be tackled with an independent strategy. PwC recommends two complementary strategies, one targeting the short-term trends and the other targeting long-term challenges.
"Technology CEOs face the dual challenge of having to understand the disruptions for their own business, but they also need to guide their customers or risk becoming irrelevant," said Tom Archer, PwC's US Technology Industry Leader. "With the pace of change occurring faster than ever, technology executives must be prepared to pivot their strategies to address the implications of cloud, social and mobile on their business, fend off new market entrants and adapt to changing customer behavior and spending."
The first in a series of perspective papers analyzes the key technological, economic and political trends and the imperative for technology CEOs to adapt their internal DNA as they move to new revenue and cost models brought on by the disruption.
-- Trend number 1: Disruptive innovation Radical shifts in technologies
translate to radical shifts in business models. In order to prepare,
technology CEOs should consider a variety of steps, including:
developing an appropriate innovation strategy that ties in with the
corporate vision and company capabilities; determining the best ways of
fostering and sustaining organic innovation; identifying opportunities
for growth; determining strategic investment bets and identifying
appropriate partners for highly integrated digital ecosystems.
-- Trend number 2: Managing cost and complexity According to PwC, in terms
of IT complexity, more than half of all companies are turning to the
cloud to reduce expenses. They must also adjust their operating model to
increase agility through focus on innovation both in technology and
processes, in order to lay the foundation for a more-efficient cost
structure. Additionally, companies are using technology to get better
information faster and cheaper through using social analytics within the
connected experience they have with customers and creating a connected
experience with suppliers and partners through digital ecosystems.
-- Trend number 3: Convergence The convergence of consumer and corporate
capabilities has forced most companies across industries to become
technology companies. Many companies will need to increase the pace of
their customer communications in order to meet these increased
expectations.
-- Trend number 4: Consumerization of ITEmployees have become accustomed to
the ease of accessing information online, whether through mobile
devices, tablets or personal computers. Companies will need to develop
enterprise applications that are easier to learn to improve productivity
and those that are easier to use on smartphones and other mobile
devices.
-- Trend number 5: Changing dynamics between developing and developed
countries Technology companies will likely be looking to emerging
markets for new business opportunities. Therefore, technology CEOs
should think about rationalizing their global operations and simplifying
and standardizing business processes and products so that development
can be applied across any region, and also tailored for a particular
region.
-- Trend number 6: Social media According to PwC surveys, 90 percent of
technology companies are focusing on strengthening relationships with
customers and clients by increasing engagement and 84 percent are
enhancing their focus on social media in search of new customers.
Companies can use social media to interact on a regular basis, to
deliver information and advice, and thus potentially increase the value
of the experience.
-- Trend number 7: Data explosion Technology companies must be able to
accommodate input from social media with input from sales results in
order to harness the broad flow of information. This requires developing
a variety of systems, for example: data warehouses, analytic tools,
storage systems, and business intelligence.
-- Trend number 8: IP and data protection Being able to compete in the
global world of technology requires maintaining a balance for technology
companies. Companies need to ensure that their systems are accessible to
their friends (i.e. employees and business partners) and unavailable to
their competitors.
-- Trend number 9: Changing political and regulatory landscape Technology
CEOs have already been subjected to extensive regulatory conditions,
therefore they must be prepared to track manufacturing and product
information, and to be audited on a regular basis.
To address these nine trends, PwC recommends that technology companies focus on extending their own digital transformation across their business units, including manufacturing, supply chain and finance. Digitization supports automation, which decreases response time and increases the accessibility of information which in turn enables companies to be more agile and able to respond to change faster.
"In today's reality, virtually every company is transforming to become a technology company as technology is creating the value differentiation in every industry with the digitization of product and service delivery. Businesses across industries now require technology providers to bring them new capabilities or platforms necessary to serve their customers," added Archer.
