09 Apr 11 business trends – development of companies in the age of digital transformation
Technology and the global economy evolve with breathtaking speed. Just like the behaviors of customers and market demands. What is the direction business solutions have been heading over the last few years? What strategy should be adopted by ERP systems and cloud service providers? What business trends should be followed by companies to maintain the competitive position on the market?
1. Digital transformation
Digital transformation is one of the top trends of the present times. Digitization, including mobile technologies, cloud computing, big data and social media, became an everyday reality and will dominate the world of business. To meet the expectations of business owners, ERP system producers will follow the market trends by offering integrated, comprehensive and powerful business tools.
According to the Gartner report, at the end of 2016 more than 50% of companies already had their own business models based on technological solutions. It is estimated that this number will grow to 83% by 2019.
Digital transformation brings numerous business benefits, such as the ability to perform insightful analyses of market changes and opportunities to build new business models and develop company’s operations to meet market demands. Unfortunately, companies that are not willing to take the challenge of steering their business in new directions may be pushed into a niche and lose their competitive advantage on the market.
2. Industry 4.0
We are entering the era of the “fourth industrial revolution” which forces manufacturing companies to make some changes: to use state-of-the-art technologies, the Internet of Things, artificial intelligence. In the years to come, the industry will be mainly focused on close integration and automation of processes which will be reflected also in ERP systems.
The concept of Industry 4.0 will permanently change the mode of operation not only in companies from the manufacturing sector. Production management processes will be significantly transformed. An enormous volume of data generated by control systems will enable us to forecast behaviors, quality parameters and control the manufacturing processes on a global scale.
3. Internet of Things (IoT)
The Internet of Things is a computing concept that refers to the connectivity of objects that collect, process and exchange data via the internet. IoT has an increasing impact on companies’ production, provides deeper insight into processes, operations and estimated machine maintenance and facilitates remote customer support.
The concept ensures immense business capabilities and has a major impact on the design process, customer service and human resources management. The key benefits include lower costs, enhanced productivity, improved security for employee data management and enhanced customer relationship management. The Internet of Things is also a great challenge that involves the change of competitiveness mechanisms, market demands, as well as products and services.
4. Change of focus from B2B to B2B2C
The current market situation demands implementing models based on cooperation that facilitate prompt response to the increased market competition by improving processes and procedures within the organization. Based on such models, companies must provide their suppliers and customers with information that has been strictly protected so far. Therefore, various company departments must generate relevant data and deliver it on time. Having in mind these demands, organization focus on implementing ERP systems.
5. Artificial intelligence
No doubt, the development of artificial intelligence will have a profound impact on ERP solutions. System developers in the coming years will introduce new features that will be based on artificial intelligence. With the development of technology and growing capabilities of machines and robots, AI will soon become a vital part of the business landscape. This process is inevitable and it is progressing very fast due to technological advances, automation capabilities and a decrease in workforce availability.
According to the research conducted by the Guardian for the Bank of America, the total value of the global robot and artificial intelligence market will amount to over $152 billion by 2020. It is estimated that, with the advance of tools based on AI, companies will improve their productivity by approximately 30%.
Experts believe that AI and ERP will develop and complement each other. They will offer several additional advantages such as the optimization of processes, elimination of routine tasks and lower operating costs.
With the development of ERP systems, companies have gained access to a huge volume of data. Solutions based on artificial intelligence that use deep learning processing and natural language processing – the key components of artificial intelligence, will allow you to collect, compare and analyze it effectively. Intelligent bots can learn and remember processes so that they can perform and reproduce it with no mistakes.
6. Virtual and augmented reality in ERP systems
The possibility of using systems combining the real world with the computer-generated world is a great opportunity for business owners who wish to deliver a new quality of service to their clients. New “realities” become new challenges that need to be faced by producers of ERP systems.
7. Business analytics and Big Data
In the era of digital transformation, tools that enable an in-depth analysis will play a major role in running a successful business. Business owners will be able to collect data and measure everything that is related to their brand, product, production processes, orders and customers. As a result, they will have access to complete and reliable data that will help them make more informed business decisions.
8. Development of cloud-based ERP systems
More and more companies are shifting towards cloud computing solutions. The trend is reflected both in the private and professional domains. What appeals most to company owners, regardless of the industry sector they represent, is the flexibility, mobility, security and scalability of the cloud.
The cloud model is an especially interesting offering for small and medium-sized enterprises with no IT infrastructure. For many companies, the purchase of servers, hardware as well as employing IT specialists, is a real obstacle to their development. Cloud computing can reduce the initial implementation costs, as cloud-based ERP systems do not require significant financial investments. Their major advantage is their unlimited scalability.
This enables users to optimize performance parameters at any time, depending on their present needs. It is also possible to set up performance parameters for specific days in each month. For manufacturing companies, it is possible to increase the performance capabilities of virtual machines for a specific time period based on the manufacturing cycle. Because of the unlimited scalability of the cloud, companies pay only for used resources.
Another advantage of choosing the cloud-based ERP solution is savings that result from the elimination of costs of maintaining IT infrastructure, purchase of servers and hardware, as well as employing IT specialists. In the case of a SaaS solution, the provider is responsible for the security and reliability of the platform.
9. Cloud computing for business
Cloud computing capabilities expand each year and they are increasingly applicable in business by integrating an ERP system with other applications. Cloud models help to overcome the barrier small and midsize companies have to overcome to enter the world of innovative technologies.
A cloud platform is a place where you can store your all databases, applications and programs used for your daily work.
Scalability is a key argument in favour of choosing the cloud. As the storage capacity in the cloud is expandable, business owners can enjoy greater flexibility and its unlimited capabilities. Data centers offer capabilities that cannot be achieved even on the most advanced desktops. Cloud-based solutions ensure improved user experience, as well as personalization possibilities without the risk of overloads.
10. Mobility
Today, employees appreciate mobility – being able to work from anywhere and at any time. Modern technologies, including ERP systems, must keep pace with this trend ensuring the freedom and flexibility of work. Mobility of ERP systems will become one of the most dominant trends on the ERP software market.
The new generation of ERP solutions mainly includes systems that follow the SoLoMo (Social, Local, Mobile) trend – they can be accessed from multiple devices, from any place and at any time. Many experts believe that remote employees are way more productive than office dwellers.
11. A new dimension of security
The development of ERP systems, a wide range of their capabilities and high level of integration bring not only enormous benefits but also new risks. In the years to come, main efforts will focus on be extensive works on the security of business data of organizations, their customers and employees’ intellectual property.
The effective protection of IT systems, information collected and confidential data is the prerequisite for business safety and stability. According to the 20th CEO Survey conducted by PwC in 2017, 61% of CEOs of the largest global organizations indicated cyber threats as the potential risks for their businesses. It was also found that 96% of companies experienced incidents of various types over the last year that resulted in financial losses and the exposure to legal risks.
The process of implementing GDPR (General Data Protection Regulation) is under way. Companies are already applying the regulations, starting from the simplest solutions. Unfortunately, the lowest degree of preparation can be seen in the process readiness. The identification of sensitive data has been implemented by only 11% of organizations. 2018 marks the beginning of significant changes – adjusting to new possibilities and preparing to tackle new risks and challenges.