To compete in the world of tomorrow, companies should stay on top of these digital trends
THE COVID-19 crisis has dramatically accelerated corporate digital transformation. As companies hurry to develop new digital capabilities, build resilience and retool for the post-pandemic world, keeping up with fast-moving technology trends is critical.
Based on our meetings with a carefully selected group of over 100 technology companies and startups, Bain & Company has identified 10 trends that are having an impact on a wide range of industries.
TREND 1: EDGE AI TRANSPLANTS BRAINS TO FACTORY TOOLS AND MACHINERY.
Considered the next wave of artificial intelligence, “edge AI” makes it possible for AI algorithms to run on the edge of a network, closer to or even on the devices collecting the data. These networks preserve bandwidth and increase efficiency by processing information closer to the users and devices that require it. Latency is reduced, and insights can be generated faster while lowering cloud services usage and cost. Plants located in remote areas are also less subject to costly connectivity losses.
TREND 2: 5G FACTORY REVOLUTIONIZES MANUFACTURING.
Capable of meeting the power requirements of millions of connections to data-intensive applications — and up to 100 times faster than 4G — 5G also offers drastically reduced latency, speeding data analysis, erasing processing delays and ensuring factory systems can react in real time. 5G is expected to accelerate the shift toward Industry 4.0, even possibly usher in an era of machine-to-machine communication.
TREND 3: SMARTPHONE DATA POWERS USAGE-BASED AUTO INSURANCE WHILE IMPROVING SAFETY.
The market for usage-based insurance is projected to reach $126 billion by 2027. Using sensors and tracking technologies embedded in smartphones, mobile telematics allows auto insurers to collect real-time data and better understand their customers’ driving habits. Ultimately, this will help insurers offer more competitive and innovative behavior-based insurance programs while fostering driver safety.
TREND 4: AUTOMATED AND EXPLAINABLE AI MAKES FINANCIAL ORGANIZATIONS SMARTER.
Banks and insurance companies are quickly increasing their investment in AI — but to get the most return, employees with little or no computer science background need to be able to use it. User-friendly AI platforms that allow employees to quickly build models, understand and trust their output, and then confidently make decisions will be critical. Banks are beginning to explore such platforms’ use in fraud detection, and insurers are using them to assess customers’ product preferences.
TREND 5: IN CYBERSECURITY, AUTHENTICATION RIGHTS AND NETWORK ACCESS GET THEIR DUE.
According to Interpol, the COVID-19 crisis has created an unprecedented opportunity for cybercriminals. Yet most companies overestimate their cybersecurity. Identifying common IT security weaknesses is central to building a truly resilient digital organization, and the potential compromise of a company’s active directory infrastructure is one gaining attention. By gaining user authentication rights and company network access, a cybercriminal might take over a CEO’s phone, usurp his or her identity, and retrieve confidential information.
TREND 6: WORKFORCE TECHNOLOGIES BOOST AGILITY AND PROFITABILITY.
Globally, absenteeism costs companies hundreds of billions of dollars per year. Retail is particularly dependent on face-to-face interactions between customers and in-store employees, something COVID-19 disruptions have made especially challenging. Workforce management technologies, however, can help retailers quickly respond to activity peaks and employee absenteeism, understand employee availability and temporarily transfer personnel, improving both operational performance and profitability.
TREND 7: HEALTH DATA IS GOLD.
Healthcare’s big data market is expected to reach nearly $70 billion in 2025. The rapid acceleration of health data collection gives the industry an unprecedented opportunity to deploy groundbreaking digital capabilities, such as AI, to enhance treatment. Smart use of health data has the potential to dramatically improve patient care and lower costs.
TREND 8: IN HR, COGNITIVE SCIENCE AND GAMIFICATION WIN THE WAR FOR TALENT.
By 2025, millennials will account for three-quarters of the global workforce. As organizations increasingly work with a digital-native pool of candidates, they must modernize recruitment. Technology can help identify the most promising candidates in ways that look quite different from traditional recruiting processes, such as leveraging cognitive science and gamification to evaluate technical expertise, intellectual skills, and even soft skills and cultural fit.
TREND 9: SHIFTING FROM SELLING TO RENTING BECOMES THE GREEN WAY OF DOING BUSINESS.
As consumer and shareholder preferences shift toward sustainability, transactional relationships based on selling products are giving way to a model of production and consumption that involves sharing, leasing, reusing, and recycling existing materials and products. To reduce consumption of natural resources, companies are developing rental models for an expanding variety of products, paving the way for a truly inclusive, circular economy.
TREND 10: TECHNOLOGY WORKS TOWARD ZERO FOOD WASTE.
According to the UN’s Food and Agriculture Organization, more than 30% of the world’s food is lost or wasted every year. Using technology to reduce waste could put a significant dent in the food discarded by retailers and businesses, increase food security, and alleviate suffering. New apps that match consumers to food retailers, manufacturers and wholesalers are already making a difference.
COVID-19 has catalyzed a technological shift of unprecedented magnitude. In the race to retool for the digital world of tomorrow, companies are smart to study and take advantage of the critical technology trends of today.
Aadarsh Baijal And Truc Mai Dupont Vohong are from Bain & Company. Truc Mai Dupont Vohong is vice-president of the firm’s EMEA Digital Partnership, Business Development and Design initiatives. Aadarsh Baijal is a partner and head of Bain’s Digital practice in Southeast Asia.