There is no longer any debate. The speed with which business critical information is gathered, processed, and analyzed is greater today than ever. With the introduction of sensors and the Internet of Things, information is gathered from almost anywhere. Despite the increased ubiquity and speed of information gathering and processing, however, many businesses are unprepared to handle and benefit from these changes.
Baby Boomers, Generation X, Millennials — it no longer matters what generation a person was born into, in an era awash with data, we are all part of the Information Generation. And members of this generation make new demands on business daily, creating a transformation imperative for digital businesses across all industries.
In retail, companies such as Zara and H&M are processing customer data with powerful new analytic technologies that provide insights to keep fashion fresh and give competitors fits. In the insurance and automotive industries, new telemetry technology provides information that enables managers to assess driver behavior more specifically than ever before, and apply this information to policy pricing and auto design. Audio speakers from Sonos and tennis racquets from Babolat now leverage software to enhance experiences and provide new services for customers. It’s happening at companies of every size. Even an app called Next Glass is attempting to change the beverage industry by recommending new beverages tailored to our liking according to data science.
This business transition is being driven by the technology trends of cloud computing, mobile, big data, and social media, and is more vast and far reaching than anything previously seen. How to deal with the transition has been an issue for discussion in the board rooms and C-suites of every company that I have visited in the past few months. Businesses that cannot keep pace with the change are more vulnerable than ever. They find themselves in much the same circumstance as publishers of maps and atlases when smart phone manufacturers first began to include a GPS application.
Are You a Disruptor? Or Will You Be Disrupted?
EMC recently commissioned the Institute for the Future and the Vanson Bourne organization to conduct a survey of 3,600 business leaders worldwide, asking them to identify the most important attributes that businesses will need to thrive in the Information Generation over the next 10 years. The two make-or-break traits that rose to the top for these leaders were being able to spot new opportunities predictively and being able to innovate in an agile way. The survey also asked these leaders how prepared they believe their organizations are in each of these two dimensions. The gaps were quite remarkable. While 62 percent of those surveyed identified predictively spotting opportunities as being very important for their businesses, only 12 percent thought that their businesses had this capability. And only nine percent believed their organizations were capable of innovating extremely well in an agile way.
The survey also identified three additional traits needed to compete in this new digital era: demonstrating transparency and trust, delivering unique and personalized experiences, and operating in real time.
Businesses that do not meet these new challenges are at risk of disruption. Consider that almost 90 percent of companies that were on the Fortune 500 list in 1955 are not on it today, having disappeared sometime over the past 60 years. The pace of change we expect to see across all industries over the next ten years will be far more dramatic than what we have known over the past half century.
Technologies Driving the Pace of Change for Business
New technologies are driving the pace of change. By itself, business adoption of cloud computing, mobile devices, social media and big data technology will not ensure survival of any business model. They are purely enablers. Big data and analytics can help a firm spot new opportunities predictively. Cloud computing can help organizations reach more people and operate with more agility and efficiency. However, it is clear to us at EMC that a business must have a plan for leveraging these new technologies as part of a new digital business strategy.
Look at what GE is doing with Internet of Things technology, which leverages both cloud computing and big data analytics. GE is an iconic American company that understands how the information that its jet engines produce through IoT technology is a valuable product on its own – a process that transforms jet engines into massive data generators, helping GE customers to use this data to improve reliability, lower costs and generate higher profits.
GE is not the only innovator. Ten years ago, health-conscious citizens clipped fitness monitors to their pockets in order to count their steps. Now, products from Fitbit connect us to the cloud and give us more information about our health. Ten years ago, jeans were just jeans. Today, a Google partnership with Levi’s aims to develop interactive garments that will function as an open IT platform.
The big question of the next decade is how many businesses are ready to follow the example of Information Generation pioneers to meet new customer demands.
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