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.
Tactile real virtualities will become so integrated that the line will become blurred between physical and virtual worlds.
The impact of tactile virtual reality
More access to better technology in blended physical and virtual worlds opens up infinite opportunities for businesses of all sizes to offer a more valuable experience for their customers and employees.
The sky is the limit regarding the potential benefits of tactile real virtualities. The top two examples are:
Creating new value for businesses, brands and people.
Improving the experience of employees and customers in their interactions with the brand.
The economic value of virtual goods is the producer of millionaires, with the majority of the virtual economy located on huge multi-participant gaming platforms. Within these gaming worlds, there are thriving, powerful economies with proprietary currencies used to purchase or sell virtual goods, virtual services, and real merchandise.
Smaller environmental impact
Tactile virtual realities can form a part of a business’ ESG goals. The promotion and successful integration of remote experiences into the lives of the global community will translate into less travel, reduced congestion and profound reductions in carbon emission levels. Furthermore, prototypes that are created in superior, realistic 3D imagery will eliminate significant manufacturing waste, reduce landfills and lower carbon emission levels.
Virtual reality can be effectively used, with AI, to successfully onboard new employees and integrate them into the company’s culture. It can also be used for more exciting brainstorming meetings.
By lowering the barriers to working remotely, a greater number of employees will be able to relocate without needing to resign from their employers. This allows companies to retain talent that they have nurtured and, conversely, opens up the whole world as a talent pool.
Leverage benefits and assess risks
To leverage the possibilities to the maximum, businesses should:
Reevaluate their competitive advantage
Put a focus on new opportunities and activate sooner than later
Collaborate heavily with ecosystem partners
In a technology survey, eighty-eight per cent of business executives said investment in technologies was being made in the area of virtual environments.
Having said all this, as with all opportunities, a full risk assessment must be undertaken. A sophisticated, tactile virtual reality must include equally sophisticated safeguards, ensured by the business and designed into the real virtualities they create.
Opportunity #6 – Digitised Science
Scientific disruption is certainly not new to ears after the past tumultuous eighteen months. It has created better quality, less expensive, and more sustainable products. It has also found its way into more leading companies. These newly scientific companies are using science to solve the world’s basic challenges.
We have seen how AI technologies were used in the research of mRNA vaccines. The results of thousands of experiments were run and compared in parallel, production was accelerated with the use of robotics, not only increasing speed but accuracy as well.
Scientific innovation has shot to the top of the priority list of many governments and businesses with the pressure of viruses, climate change and the like. The second quarter of 2020 saw some countries spend more on I.T. and R&D than on fixed assets for the first time in ten years.
In a science-focused survey, eighty-five per cent of C-suite executives agreed that scientific capabilities are vital for the future success of businesses.
From a decade of companies becoming digital, we will most likely have a decade of companies becoming scientific to leverage opportunities from the new waves of innovation.
Becoming a scientific company
Scientific opportunities are not about new sales income; they are about equipping your business to be more sustainable in meeting society’s food, health, and housing needs.
The convergence of science and business is expected to bring about:
A systemic change that will transform entire sectors of the economy.
The creation of disruptive products and services that are cheaper, more sustainable and of better quality.
We are seeing deep technological disruptions in the food industry, with food being created from a molecular level upwards as opposed to breaking down and reconstituting food products as the traditional food processing industry does.
Scientific integration into business is presenting breakthroughs into real-world use by combining science with digital technologies. The commercialisation of opportunities at the convergence of science and IT allows for swifter adaption to changing realities.
Leverage opportunities and assess risks
To leverage the opportunities, businesses need to:
Reimagine the design-build-test-learn cycle
Be open to innovative disruption to drive the ecosystem forward
Spread their risk through alternative investment vehicles
In a digital technology-focused survey, ninety-seven per cent of business leaders said their business is using digital technologies to accelerate advances in other scientific areas.
Again, it is important to note that caution should always be part of advancement. Businesses must address ethical questions to ensure public opinion does not undermine scientific innovation.
Choose to change
Business leaders are facing unprecedented challenges in 2021. They are under ever-growing pressure to identify what will work today but, simultaneously, ascertain what will be required to meet the swiftly evolving needs of tomorrow.
The next 12 to 18 months will hold the decisions of thriving and struggling businesses in the next five years.
Now is the time to accept the need to change and leverage the future!
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