Necessity being the mother of (re)invention, the Covid-19 crisis has dramatically accelerated the pace of digital transformation. As companies race to develop new digital capabilities in an effort to build resilience and retool for the post-pandemic world, keeping up with fast-moving technology trends is critical.
To monitor the most important trends and relevant tech application, Bain & Company met regularly last year with a carefully selected group of over 100 technology companies and start-ups and hit on 10 key trends that are already having an impact on a wide range of industries. These technology applications are creating big opportunities in the era of the digital enterprise.
Edge AI transplants brains to factory tools and machinery. Considered the next wave of artificial intelligence, edge AI or AI on the edge is a network infrastructure that makes it possible for AI algorithms to run on the edge of a network, meaning closer to or even on the devices collecting the data. The sudden and dramatic changes in network traffic that have accompanied Covid-19 lockdowns and the shift to working from home are likely to accelerate the move already underway toward edge computing.
Benefits of edge computing include preserving bandwidth and increasing efficiency by processing information closer to source of data, the users and devices that require it, rather than sending that data for processing in central locations or in the cloud. By embedding AI locally, manufacturers can reduce latency issues and accelerate the generation of insights at the source while lowering cloud services usage and cost.
Connectivity cost also drops, as processing part of the data locally reduces bandwidth and cellular data usage. Because intelligence is being run locally, plants located in remote areas with poor communication infrastructure are less subject to connectivity losses that can hinder mission-critical and time-sensitive decision-making.
5G factory revolutionises manufacturing. The World Economic Forum, citing IHS Markit research, expects the fifth-generation mobile network, 5G, to reach a global economic output of $13.2 Trillion and generate 22.3 Million jobs by 2035. By unlocking a new realm of technological possibilities, the global wireless standard is expected to notably accelerate the shift toward Industry 4.0, the industrial Internet of Things.
“5G is expected to boost the manufacturing industry with new and more powerful digital capabilities”
Capable of meeting the power requirements of millions of connections to data-intensive applications, 5G is expected to boost the manufacturing industry with new and more powerful digital capabilities. The reliability of 5G connectivity guarantees a stable and constant network connection anywhere and at any time on factory floors, ensuring the continuous and unhindered execution of mission-critical operations. 5G could even usher in an era of communication between machines.
Smartphone data powers usage-based auto insurance while improving driver safety. The market for usage-based insurance, UBI, is projected to reach $126 Billion by 2027.
With 3.8 billion smartphone users expected by 2021, mobile telematics takes UBI a step further, allowing insurers to use sensors and tracking technologies embedded in smartphones to collect real-time data and better understand their customers’ driving habits. Ultimately, this will give insurers the opportunity to offer more competitive and innovative behaviour-based insurance programs while fostering driver safety.
Automated and explainable AI makes financial organisations smarter. Banks and insurance companies expect an 86% increase in AI investments by 2025, according to The Economist Intelligence Unit.
For companies to exploit the full potential of AI, employees with little or no computer science background need to be able to use it to increase their operational performance. For this reason, user-friendly AI platforms that allow business employees to quickly build models, easily understand and trust their output, and confidently make decisions will be critical in the deployment of AI at a larger scale.
In cybersecurity, authentication rights and network access get their due. According to Interpol, the Covid-19 crisis has created an unprecedented opportunity for cybercriminals to increase their attacks. Yet most companies overestimate their cybersecurity performance, with only 24% actually meeting the bar, according to a 2020 Bain study. Identifying common IT security weaknesses and developing cybersecurity maturity is central to building truly resilient digital organisations.
One approach hackers take is to compromise a company’s active directory, AD, infrastructure, which controls user authentication rights and company network access. Using this approach, a cybercriminal could take over a CEO’s phone, usurp his or her identity, and access confidential internal information. Companies should tailor security to their AD, invest in monitoring to detect attacks in real time and investigate all AD breaches.
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.
Some 88% of global retailers would rather overschedule or add additional labour than risk being understaffed, an approach that leads to high labour costs and lower profits. Workforce management technologies, however, can help retailers substantially enhance workforce agility by quickly responding to activity peaks and employee absenteeism, ultimately improving both operational performance and profitability.
Health data is gold. Healthcare’s big data market is expected to reach nearly $70 Billion in 2025, almost six times its 2016 value of $11.5 Billion. The rapid acceleration of health data collection gives the industry an unprecedented opportunity to leverage and deploy ground-breaking digital capabilities, such as AI, to improve treatment. Smart use of health data has the potential to dramatically improve patient care.
“Health data is gold. Smart use of health data has the potential to dramatically improve patient care”
In HR, cognitive science and gamification win the war for talent. By 2025, millennials will account for three-quarters of the global workforce. As organisations increasingly work with a digital-native pool of candidates, they must modernise recruitment.
Using technology to develop an innovative recruiting process can improve HR teams’ performance and enable faster identification of the most promising candidates, while meeting the expectations of a new generation of talent. Companies need to utilise software that evaluates experience, technical expertise, intellectual skills, soft skills, cultural fit and multiple other factors in a smooth and engaging candidate experience that will foster objectivity and diversity by limiting selection bias based on age, race or other factors. This can look quite different from traditional recruiting processes.
Shifting from selling to renting becomes the green way of doing business. By 2029, circular economies are expected to replace linear economies, according to Gartner. The move from transactional relationships based on selling products to a model of production and consumption that involves sharing, leasing, reusing, and recycling existing materials and products is gaining momentum as consumer and shareholder preferences shift toward sustainability.
Technology works toward zero food waste. According to the UN’s Food and Agriculture Organisation, 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 the suffering of the hundreds of millions of people who go to bed on an empty stomach.
Across industries, Covid-19 has catalysed a technological shift of unprecedented magnitude. In the race to build powerful new digital capabilities and successfully retool for the world of tomorrow, corporations need innovative partners. With a select group of trusted allies, they must prepare their businesses to thrive in the future by taking advantage of the critical technology trends of today.
- By embedding AI locally, manufacturers can reduce latency issues and accelerate the generation of insights at the source.
- Smartphone data powers usage-based auto insurance while improving driver safety.
- Using technology to develop an innovative recruiting process can improve HR teams’ performance.
- Shifting from selling to renting becomes the green way of doing business.
To retool for the world of tomorrow, companies should stay on top of these ten critical digital trends, write Dr Houssem Jemili and Truc Mai Dupont Vohong of Bain & Company.