The digital revolution has influenced a number of sectors and changed the world before our eyes. Many industries have benefitted immensely from the advances in technology, with the tech industry undoubtedly at the top of the list. The future of business involves a shift towards the digital, and those who fail to adjust will not be able to keep up. However, even though technology has had a positive impact on the way we live and work, it can also have negative consequences. If companies are not careful with the way they introduce state-of-the-art equipment and new software, more losses than gains could be the result. The aim of this article is to point out the mistakes made by businesses when adjusting to digitalization, as well as present the biggest and most promising trends in technology for 2020.
Technology on the agenda for companies in the 21st century
Technology is developing at a rapid speed; new inventions are constantly being made. From gadgets and software to artificial intelligence, it is hard to ignore the digital revolution taking over the world. Businesses around the globe are realizing the importance of adjusting to technology and adapting to changes. However, digitalization comes with its demands – failure to keep up could result in serious damages to your business. That being said, it is often difficult for companies to catch up with new developments in the IT sphere, because they are happening at a fast pace. In a strive towards modernizing their system, often the opposite results are achieved. It is not unusual to witness an unsuccessful introduction of new software that only leads to financial losses and chaos in the corporate environment.
It is important to consider why such cases are occurring. It could be that the software is flawed – the developers may have been under pressure and lacked the chance to perfect their design. Or perhaps, technology is advancing at a speed too fast for the average business to catch up. This creates an atmosphere of chaos in the corporate world.
Cloud computing is growing in popularity, with companies continuing to increase their use of cloud systems. Cloud computing makes computer system resources, like data storage, available on demand. Clouds are usually data centers available to users on the Internet – with them files and applications are easily accessible from any device. Cloud computing is very convenient, because it makes sharing resources faster and simpler. That is the reason why many organizations have turned to cloud systems. Most large firms now employ heterogeneous hybrid clouds, including multiple public and private cloud services and technologies. Many firms also have a mix of virtual servers, bare metal servers, containers, and applications based upon microservices. The problem, however, stems from the rapid pace of innovation of cloud computing. Big changes are constantly happening, which drives cloud computing chaos, especially pronounced with identity management.
Cloud computing and mobility have set the trend for a number of new applications and associated application authentication and access controls. This has led to more user names and passwords to provide, memorize, and monitor, which means more effort from users, IT operators, and security teams.
Perhaps the most obvious response to the disorganization in cloud computing that organizations are suffering from is employing more qualified specialists who are able to deal with the problem. However, the reality is not as simple – there is a global IT skills shortage. It is not surprising that 27 percent of organizations in the US have stated that they lack identity management skills, and 31 percent have said that they do not have enough identity management specialists. So, what could be done is provide employees with the opportunity to obtain the necessary qualifications, and in the meantime opt for quality over quantity. Trying to keep up with the ever-changing digital sector for the sake of it will only lead to more problems further down the line. Establishing a well-developed system based on skill and precision is the right way to beat the current chaos.
That being said, there have been some major cases of technological fails by big companies, which should be used as an example of what to avoid when making a transition towards the digital.
The expenses of flopped projects
It is not particularly unusual for business organizations to take on more than they can handle, which ultimately leads to failure. It is especially so if old software systems are not updated regularly, but rather all in one go.
Haribo experiences slump in sales
German confectionary giant Haribo has been the victim of a failed introduction of new software. The company used IT systems from the 1980s for decades before deciding to upgrade to a new software system from SAP. However, the new IT system did not work as planned. This resulted in a huge logistics problem – Haribo could not manage to send enough gold bears to supermarkets. In turn, supermarkets could not fill their shelves and had to cope with lack of products. Therefore, Haribo reportedly suffered a significant slump in sales: the company turned over a quarter less of its gold bears in 2018 compared to 2017. The company had not predicted this kind of problems – they expected delays, but not to this extent. Developers working at the organization faced the challenge of adapting processes and data from the old software to the new one and transferring them to the SAP system. Ultimately, the project which was considered one of the largest in IT history turned out to be too complex.
Losses for Liqui Moly
The CEO of German oil, lubricant and additive company Liqui Moly has complained that he has never before had to apologize to customers about the performance of his organization. The reason behind the apologies lies in the introduction of new business software, which turned the company into a permanent construction site. The software which Liqui Moly uses is provided by Microsoft. It was supposed to speed up the internal processes and reduce costs, but the opposite happened. The aim of the new software was to control purchasing, production, shipping and invoicing throughout the company, but the execution was lacking. This resulted in delayed and incomplete deliveries, and in some cases even half-full containers being shipped out. The failed introduction of software for Liqui Moly cost the company not only logistically, but also financially – sales fell by almost one percent compared to the first half of 2018 to EUR 260 million, while profits fell by a whopping 30 percent to EUR 11 million. This was a blow that the organization is still trying to recover from.
Unfortunately, the cases of companies struggling to keep up with the digital revolution are only increasing. The shift is necessary, but complicated. There are, however, some new and promising trends which are set to bring corporations more success than failure in 2020.
Trends and promising sectors in the new decade
Whether we are ready for it or not, the tech industry is moving forward without waiting for anyone to catch up. That is why it is important to stay informed about the latest digital trends and make the right decisions for your business. There have been some leading sectors which have accelerated and will continue to accelerate the growth of technology in the years to come.
Perhaps the biggest craze in the digital sector is artificial intelligence (AI). It has the potential to imitate the human brain by working through algorithms and processes such as natural language processing, visual perception and pattern recognition, and decision making. AI holds endless potential for a number of economic sectors, because it can help address problems in infrastructure, organization or development. Although AI has existed for years, its sophistication has recently evolved dramatically. It is now present in everyday life – for example, smart phones use AI to recognize faces, Google Maps use AI to track traffic and create routes, and online advertisements are tailored to personal shopping patterns and searches. This has started a global race to fund and develop AI technology. Corporations around the world in all industries – from retail to agriculture – are investing in AI technology to enhance their business. Machine Learning leads AI investments, as business organizations are trying to integrate it into their products. Machine learning occurs through observation and experience. Instead of a programmer writing the commands to solve a problem, the program generates its own algorithm based on example data and a desired output. That is the reason why artificial intelligence, along with machine learning, is one of the leading trends in the digital sector that every business will benefit from.
Despite its failed introduction by many companies, cloud computing continues to be a top digital trend. In the new decade, cloud adoption will be easier for companies, as both hybrid and multicloud environments will become more flexible. The hybrid cloud system allows companies to place their workloads on both private and public clouds. This provides a smoother transition into the process of digital transformation, because hybrid clouds serve as an interim step. On the other hand, some enterprises are adopting multicloud solutions. They combine cloud services from multiple providers. Their biggest advantage is that they allow companies to assess the strengths and weaknesses of several vendors before committing for the longer term.
Cloud services users are often concerned about security. However, the fact is that in many cases, cloud providers possess far greater security capabilities and expertise than most businesses could ever hope to develop themselves. Cloud-based security solutions continue to gain popularity across industries, especially in financial services, government, and other highly regulated sectors. That comes as no surprise – a lot of data is stored in clouds, which can be accessed from many devices. Cybersecurity is the only way of ensuring that important information is protected.
Cryptocurrencies have gained a lot of popularity over the last years. Blockchain is the technology behind Bitcoin and other virtual currencies, so it is often publicly discussed. The biggest advantage of cryptocurrencies is that they provide an alternative payment method. Through Blockchain all financial transactions are tracked and recorded without the need for a financial intermediary. The system is transparent and serves as a log for transactions, eliminating the role of banks as a third party. That is why many businesses have started to include cryptocurrencies as a payment method.
One of the biggest trends that combine the entertainment industry with the digital sector is streaming platforms. Their advantage is that they make music, videos and visual content in general available and easily accessible to everyone. Netflix, for example, has its own infrastructure. It is a streaming company that creates content for its streaming platform, but it also creates and maintains the platform itself. Streaming services have led to a decrease in the popularity of traditional media, which is why many corporate giants have also started to create their own platforms, like Amazon Prime, for example.
Other popular digital trends include the Internet of Things, smart devices, self-driving technology, semiconductors and more. The digital revolution continues to be a driving force of change, as it dictates the rules of modern business.
The extent of digitalization
With the current rate of innovations and developments in the digital sector, it is hard to imagine where the IT sector will go. However, taking into account some leading trends helps gain insight into what we can expect in the future. Artificial intelligence has already started a global craze. Some processes have already been automated, and the tendency is for more AI systems to take over manual tasks, as they are faster and less prone to mistakes.
It is also very likely that apart from AI, cloud computing, e-commerce, blockchain and the Internet of Things are going to continue to drive innovation and change in the digital sector. That is why it is essential for organizations to adapt. With more and more IT products entering the market, economies will adjust to the consumption of IT technology. Our lifestyle has already changed because of the digital revolution, but it is likely that tech products will find place in every sphere of everyday life.
Ultimately, the biggest challenge businesses are facing is security. With cloud networks, companies are facing big risks of information leaks and security breaches. We have witnessed data leaking even from governments due to poor security and weak management. That is why we will probably see organizations prioritize and perfect cybersecurity systems in the future.