No forecaster in 2019 could have predicted the extent to which business models became reinvented, supply chains restructured, scientific breakthroughs accelerated, and productivity became virtually managed.
Forward-thinking leaders will be leveraging these new opportunities, tapping into the innovation presented and preparing for a new global reality.
In this article, we look at a summary of the key opportunities presenting in the global markets, based on extensive research conducted by market analysts such as Accenture, Synnex and Pwc.
Opportunities for business change
Opportunities for business change are vital for the shaping of successful future companies, but it depends on business leaders understanding the indicators and taking action.
Opportunities translate into success when leaders are forward-thinking, embrace change and create new way growth paths.
Analysts have shortlisted the top six opportunities for agile businesses to build into their strategies:
Look forward and learn from the future
Decisions at the edge
Establish a sustainable purpose
Decentralised supply chains
Tactile virtual reality
Opportunity #1 – Look forward and learn from the future
Leading businesses have already been using a combination of data analytics and AI (artificial intelligence) to inform their decisions and strategy adjustments. This approach needs to become a norm for small businesses, not only large conglomerates.
Traditionally, small and medium businesses look primarily into the past. However, the dramatic shifts in the global business environment and accelerated changes in human behaviour mean that past data cannot correctly predict future business models.
New sources of info are needed, e.g. real-time value chain data, to better anticipate new patterns and needs. Furthermore, this data needs to be processed immediately and faster, with results amplified by artificial intelligence (AI). This is the way businesses can learn from the future.
Learn from the future
The use of this methodology will:
Give businesses a vastly broader market view
Facilitate faster decision making
Give stakeholders greater trust in decisions
Solve previously unmanageable challenges
Superior forward-looking capabilities will allow an enterprise to stay one step ahead of its competitors and market needs.
In surveys conducted by leading market analysts, only thirty-one per cent of executives stated they were one hundred per cent confident in their ability to predict and react to consumer behavioural changes.
By using new sources of data and AI, decisions on product development and sales life cycles can be made with greater certainty.
At the same time, learning from the future can help companies prepare for risks.
Taking forward learning onboard
It is imperative for business owners to personally persist with gaining a deep understanding of the importance of learning from the future.
In an Accenture survey, eighty-eight per cent of C-suite executives agreed that using forward-looking data sets and AI analysis will be vital for their company’s success.
Access to this potent methodology and modelling technique exists, but the mindset of business leaders is holding back the use of it as well as cultural and organisational constraints.
Businesses that develop forward-looking capabilities will capture opportunities that would otherwise be missed and will be far better prepared for risks as fewer will be unexpected.
Companies that pro-actively move from:
Top-down decision making, based on experience
Bottom-up decision making, based on data
Will achieve greater success as employees supplement their judgment and intellect with suggestions from AI.
Opportunity #2 – Decisions at the edge
Accelerated decentralisation has forced leaders to push decision making to team members at the “edges” of highly networked teams. This method increases the agility and speed of a business’s ability to respond to market needs.
The decentralisation of decision-making was initially influenced by a computation methodology that decreases processing time by storing data (intelligence) closer to the point of use.
When you move decision-making to the edge of networked teams, they are empowered to organise work, execute business strategies, and deliver corporate goals. There is also a measurable increase in local performance.
Starting decisions-at-the-edge leadership
To achieve a viable “think-globally-but-act-locally” organisation there are several factors that need adjustment via a comprehensive implementation project.
Technology enables connectivity, but data security increases in importance, as does information-flow management, to counter distance constraints.
Moving decision-making authority to the edges is now for vital businesses that want to successfully manage growing fragmentation and changing consumer preferences.
Opportunity #3 – Establish a sustainable purpose
Globally, companies are integrating sustainability into the foundations of their operations as well as establishing sustainable social responsibility.
Business value increases
Share value increases indicate that businesses focusing on a sustainable purpose for the benefit of all their stakeholders experience greater value growth.
The biggest difference between companies that experience value growth versus those that don’t is the gap between their rhetoric and their decisions.
Surveys of 521 of the world’s largest companies have shown that almost forty-three per cent of these companies did not have multi-dimensional values that matched their intent.
These companies allocated the majority of their result announcements to news on environmental, social and governance topics, but their measured ESG performance, over three years, was consistently below average.
Giving your business a sustainable purpose
Pressure on organisations will intensify as stakeholders demand accountability from companies that fail to deliver on purpose.
Businesses achieving higher ESG ratings also achieve higher operating margins – up to 3.7 times higher than businesses with lower ESG ratings. In addition, annual total returns to shareholders were higher by up to 2.6 times.
There is an expectation that the correlation between financial performance and sustainability will strengthen in the future. This positions sustainability as a new opportunity for growth, for example, with circular business models, virtual environments and ground-breaking natural sciences.
Opportunity #4 – Decentralised supply chains
Businesses are decentralising their supply chains by moving production closer to demand, driven by supply chain breaks caused by the pandemic.
One of the successful supply chain adaptions from the past year has been the global use of curbside pickup. The adaption resulted in retailers increasing margins on previously loss-making channels. Generally, however, pandemic-induced changes have increased the cost of customer service without a commensurate increase in service quality.
In supply chain surveys, only forty-nine per cent of businesses said they were able to currently meet customer expectations for order fulfilment.
The businesses that are measurably closer to meeting customer order fulfilment expectations are the ones that have been taking a holistic approach to experimental interventions in their historic supply chains.
Blur business borders
To move to decentralise supply chains from centralised, linear models involves creating on-demand production at decentralised points.
This new methodology aims to minimise the implications of distance and borders on business.
Decentralising your supply chain
Superior distribution algorithms are minimising the distances travelled and the time taken. In addition, AI is assisting with cloud-based quantum routing using real-time data.
Smaller environmental footprint
Giant distribution hubs are being replaced by micro-fulfilment centres, serving more customers from a smaller footprint.
Old methodologies with large inventory buffers at giant hubs caused significant waste. Excess inventory is avoided by producing-to-order closer to the customer.
Companies can break the physical restraints of their supply chains and increase order fulfilment rates by:
Redefining the purpose of the physical infrastructure.
Reevaluate and redesign supply networks.
Potentially redesigning the portfolio of products and services.
To ensure decentralising will not destabilise emerging economies, business leaders will have to identify risks to vulnerable people in emerging economies and mitigate the risks through long-term skills development.
Opportunity #5 – Tactile Virtual Reality
There is a growing trend of blending virtual and physical worlds into “tactile real virtualities.”
The virtual reality (VR) technology that most of us have experienced involves our senses of vision and hearing. However, the future of it will involve all our senses as the physical world interfaces with it.
For example, haptics technology, which uses vibration or motion to create a touch sensation for the user, is being integrated into the automotive industry.
It is projected that by 2026, ninety-five per cent of vehicles off production lines will offer tactile experiences, for example, a seat vibration to notify the driver of a risk.