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Digitalization Trends to Market Success

April 17, 2014 by Elisabeth Peternek 0

Crowdfunding, hyperscale, cyber attacks: The Accenture Technology Vision 2014 reveals the digitalization trends of the future.

It’s not just the small, agile startups like Instagram, Twitter, and zipcar who will profit from innovation through digitalization and revolutionize old business models. Big companies are back in the game. Procter & Gamble, Tesco, Disney, and General Electrics (GE) are just some of the players among the 2,000 companies competing in the global digital race.

This is what Accenture discovered in its Technology Vision 2014. According to the study, high performance companies are pursuing a digital strategy to tap the benefits of mobility, data analysis, and cloud computing. This will enable them to profit from improved business processes and information in real time, while they will also be able to extend the boundaries of traditional workforces and change the way in which data is managed and used.

Tapping new markets through digitalization

An increasing number of companies outside the IT sector are becoming digital leaders. Major traditional companies like GE have realized that they can do more than control their own markets; they can tap new ones and gain a foothold. Here are six digitalization trends that will have a major impact on companies in the next three to five years:

1. Hyperscaling puts the spotlight back on hardware

With the hardware deployed until now, it will be impossible to master the rapid development of software and the World Wide Web in the future. The need for bigger and faster data centers is growing. Google is the largest in the field of hyperscale data centers with well over a million servers consuming around 260 million megawatts of power – roughly a quarter of the energy generated by a nuclear power plant. New hyperscaling­ approaches will have to overcome previous limitations.

However, not only Internet companies are reaching the hyperscale level with their interconnected devices, sensors, and data centers. Enterprises from the utilities, oil, gas, and automotive industries are hot on their heels.

2. The app business

The development of applications was originally conceived for private consumers. Apps have the advantage of being simple, compact, and fairly self-contained. Companies have much more complicated problems to solve. A large number of applications is necessary to cover complex business processes across several time zones, countries, and thousands of employees. The trend is moving toward entire libraries or “ecosystems” for applications.

The motto for the future: “There’s an app for that”

The analyst company Gartner predicts that, by 2017, around a quarter of all enterprises will have their own app store for managing corporate-sanctioned applications for PCs and mobile devices.

Applications are not only becoming smaller and faster, they are also getting everywhere. The range of industries that have discovered applications as a way of connecting with customers is growing rapidly.

3. Internet of Things blurs the line between digital and physical world

The Internet of Things is changing our habits and our working environment. Companies use data to react faster and more intelligently to market changes. For example, Philips and Accenture have presented a concept for using Google Glass in hospitals. A doctor with smart glasses can monitor vital patient data without having to move away from the patient or the operating table.

The number of smart devices is growing while their cost is falling. Smartphones have turned their owners into digitally augmented versions of themselves. This opens up completely new doors for enterprises: They not only have the opportunity to get new insights into the market, but they can also establish a new basis for socio-political decisions. Technology and business leaders must think about how they can bring together customers and business in a digital-physical world.

4. The border between the workforce and the customer is disintegrating

Until recently, marketing departments researched the wishes and preferences of consumers. But, in the future, customers will be collaborating directly on products by contributing their ideas through networks. The border between the traditional workforce will disintegrate and enterprises will have access to an apparently infinite pool of human resources.

Almost limitless collaboration is possible with everyone else who is connected to the Internet – regardless of whether the connection is professional or personal. That’s why an increasing number of digital platforms offer companies a kind of “online labor market.”

From workforce to crowdsource: the power of the people

GE, MasterCard, and Facebook are leading the way: They take advantage of the services of companies such as Kaggle, a global network of computer specialists, mathematicians, and data miners who work together to develop solutions ranging from airline flight optimization to store location optimization. Others use crowdsourcing forums to finance projects or gain insights into markets.

5. Data is put into circulation throughout companies

In spite of mature data management tools, some data remains untapped in many enterprises. According to a study by Gartner, 85% of the “Fortune 500” companies will be unable to exploit big data to their competitive advantage by 2015. Companies are implementing ever more tools for processing big data. This results in complex data landscapes and data silos. To exploit the value of these, companies must start handling data like “products” in a “supply chain” so that it can flow through the entire organization. For example, since Google opened up its APIs, more than 800,000 Web sites have used data from Google Maps – which makes it so widely known.

6. Resilient IT architecture

Enterprises can learn from their mistakes, too. The online movie provider Netflix is a prime example: Its IT department works with an automated test program that constantly wreaks havoc in its own system and monitors and deflects the attacks.

Customers expect systems to be available 24/7. Cyber attacks must therefore bounce off systems. System downtime can entail enormous economic risks – particularly for digital enterprises with Internet-based business models. A mere five-minute outage in August 2013 cost Google U.S.$ 545,000, for example. Meanwhile, a study by the Ponemon Institute found that the average cost of data center downtime is U.S.$7,000 a minute.

Check out the full study Accenture Technology Vision 2014.

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