Last week, I wrote about the McKinsey Global Institute’s list of 12 most disruptive technologies; this week, I want to look at a companion piece from McKinsey: “Ten IT-enabled business trends for the decade ahead.”
The pace of information technology change, innovation and business adoption over the last few years “has been stunning,” McKinsey says. “Consider that the world’s stock of data is now doubling every 20 months; the number of Internet-connected devices has reached 12 billion; and payments by mobile phone are hurtling toward the $1 trillion mark.”
Two trends identified in previous McKinsey research have reached the point where they are now competitive necessities for most companies: big data and advanced analytics. In addition, McKinsey notes three trends that marketers are familiar with but are now expanding across organizations: the integration of digital and physical experiences to create new ways to interact with customers; the demand for products that are free, intuitive and radically user oriented; and the rapid evolution of IT-enabled commerce.
Without further ado, here are McKinsey’s top 10 IT trends:
- Joining the social matrix. Social media are more than a consumer phenomenon, says McKinsey. They connect many organizations internally and increasingly reach outside their borders, “tapping the brain power of customers and experts from within and outside the company for breakthrough thinking.”
- Competing with ‘big data’ and advanced analytics. The volume of global data now doubles at a pace faster than every two years, McKinsey reports, and the power of analytics is rising as costs are falling. Marketers are already assembling data from real-time monitoring of blogs, news reports and tweets to “detect subtle shifts in sentiment that can affect product and pricing strategy.”
- Deploying the Internet of all things. Tiny sensors and actuators are proliferating at astounding rates. Over the next decade, according to McKinsey, these sensors could potentially link over 50 billion physical entities! Uses range from managing production and distribution to new ways of monitoring our health through apps and ingestible sensors. Yum!
- Offering anything as a service. The shift toward cloud-based IT services has made possible new opportunities in the consumer market such as companies renting idle vehicles by the day or hour or renting unused space on a short-term basis. There are now online services where you can rent everything from designer clothes and handbags to textbooks.
- Automating knowledge work. “[A]dvances in data analytics, low-cost computer power, machine learning and interfaces that ‘understand’ humans are moving the automation frontier rapidly toward the world’s more than 200 million knowledge workers,” according to McKinsey. Examples range from computers that help attorneys sift through thousands of legal documents for pretrial discovery to supercomputers able to assist oncologists with cancer diagnoses and treatments.
- Engaging the next 3 billion digital citizens. Rising incomes and less expensive mobile devices mean that large numbers of citizens in developing nations are becoming wired. The growth potential is huge, McKinsey says, with digital penetration in India at only 10 percent and in China 40 percent.
- Charting experiences where digital meets physical. The blurring of physical and virtual continues at a rapid pace, with more and more physical aspects of our world taking on digital characteristics. From Google Glass to wristwatch computers, interactive devices are changing the way we retrieve and use information.
- ‘Freeing’ your business model through Internet-inspired personalization and simplification. After nearly two decades of Internet browsing and purchasing, consumers expect services to be free, personalized and easy to use. Expectations of instant results, and superb and transparent customer service are now spilling into brick-and-mortar stores. As a result, businesses are forced to offer more services free or at lower cost.
- Buying and selling as digital commerce leaps ahead. Decreasing technology costs and fewer barriers to entry have allowed for more peer-to-peer e-commerce and new kinds of payment systems. For example, Airbnb connects travelers with people who have spare rooms to rent. Similar marketplaces are springing up for bicycles, cars and labor.
- Transforming government, healthcare and education. These three sectors make up about a third of global GDP but have lagged behind in productivity growth in part because they have been slow to adopt new technologies. However, governments are becoming more efficient, healthcare costs are being contained and education is being transformed through greater use of mobile and web-based applications.
What do these 10 trends mean for business leaders? According to McKinsey, here are the areas that organizations need to focus on:
- Transparent and innovative business models,
- Talent (particularly in the sciences and engineering),
- Organization and
- Privacy and security.