Tag Archives: technology trends

The Essential Eight technologies that matter now

In Tech breakthroughs megatrend: how to prepare for its impact, PwC has evaluated more than 150 technologies globally and developed a methodology for identifying those which are most pertinent to individual companies and whole industries. The result is a guide to the “Essential Eight” technologies that PwC believes will be the most influential on businesses worldwide in the very near future:

  1. Artificial intelligence (AI): Software algorithms that are capable of performing tasks that normally require human intelligence, such as visual perception, speech recognition, decision-making, and language translation. AI is an “umbrella” concept that is made up of numerous subfields such as machine learning, which focuses on the development of programs that can teach themselves to learn, understand, reason, plan, and act (i.e., become more “intelligent”) when exposed to new data in the right quantities.
  2. Augmented reality (AR): Addition of information or visuals to the physical world, via a graphics and/or audio overlay, to improve the user experience for a task or a product. This “augmentation” of the real world is achieved via supplemental devices that render and display said information. AR is distinct from Virtual Reality (VR); the latter being designed and used to re-create reality within a confined experience.
  3. Blockchain: Distributed electronic ledger that uses software algorithms to record and confirm transactions with reliability and anonymity. The record of events is shared between many parties and information once entered cannot be altered, as the downstream chain reinforces upstream transactions.
  4. Drones: Air or water-based devices and vehicles, for example Unmanned Aerial Vehicles (UAV), that fly or move without an on-board human pilot. Drones can operate autonomously (via on-board computers) on a predefined flight plan or be controlled remotely. (Note: This category is distinct from autonomous land-based vehicles.)
  5. Internet of Things (IoT): Network of objects — devices, vehicles, etc. — embedded with sensors, software, network connectivity, and compute capability, that can collect and exchange data over the Internet. IoT enables devices to be connected and remotely monitored or controlled. The term IoT has come to represent any device that is now “connected” and accessible via a network connection. The Industrial IoT (IIoT) is a subset of IoT and refers to its use in manufacturing and industrial sectors.
  6. Robots: Electro-mechanical machines or virtual agents that automate, augment or assist human activities, autonomously or according to set instructions — often a computer program. (Note: Drones are also robots, but we list them as a separate technology.)
  7. Virtual reality (VR): Computer-generated simulation of a three-dimensional image or a complete environment, within a defined and contained space (unlike AR), that viewers can interact with in realistic ways. VR is intended to be an immersive experience and typically requires equipment, most commonly a helmet/headset.
  8. 3D printing: Additive manufacturing techniques used to create three-dimensional objects based on digital models by layering or “printing” successive layers of materials. 3D printing relies on innovative “inks” including plastic, metal, and more recently, glass and wood.

Visit http://www.pwc.com/techmegatrend to download the paper and read related content.

Enterprise has a huge opportunity to embrace and mainstream wearable technology

A recent PwC study shows that companies are already putting wearables to work in the workforce. In an era where workplace loyalties are fragile, use of wearable technology in employer-sponsored health and wellness programs can lead to a healthier and thereby more productive workforce. Implementation of wearable tech could have very clear implications for a company’s bottom line— opening the door for enterprise to subsidize the use of wearable devices amongst both employees and consumers.

Three main global trends that will shape the future: key findings for Romania

The Romanian CEOs think there are three main global trends that will impact their companies in the next few years, according to the 17th edition of the PwC Global CEO Survey. Almost all believe that technological breakthroughs will have a major impact. More than half of respondents state that they will feel the impact of demographic changes, as well as resource shortages and climate change. Also, urbanisation is one of the global trends that will reshape businesses.

According to the findings of the 2014 CEO Survey in Romania, 92% of the CEOS have mentioned technological breakthroughs as one of the three main global trends that will transform their companies in the next five years. The percentage is higher than the Global and European ones (81%). Both climate change and resource shortages have been mentioned by 51% of the Romanian CEOs, while urbanisation was mentioned by 47% of them.

“There is a wide consensus among the Romanian CEOs about the role of technological breakthorughs in reshaping their companies in the next few years. On the background of a stronger feeling that the future started yesterday, innovation is the most important opportunity for growth. And innovation is not just about manufacturing techniques or developing new services, but also about ways to approach and attract clients”, stated Vasile Iuga, Country Managing Partner, PwC România.

This is the fourth consecutive year when PwC Romania launches a separate edition based on the answers of an increasing number of local CEOs who joined our initiative. PwC gathered valuable insight on their views and on their strategy when it comes to tackling opportunities for growth, or to dealing with challenges of local and global economies.

This year’s edition of the Global CEO Survey was released earlier this year within the World Economic Forum at Davos and it presents the perspective of more than 1344 CEOs worldwide on the current economic situation and their take on building a stronger foundation for future growth.

Top 10 Technology Trends for Business for 2014

Today, all roads lead to digital. From business strategy to execution, digital technology has become the foundation for everything we do. As companies strive to bolster competitive advantage in a complex global environment, savvy business leaders are leveraging technology to accomplish their goals.

Digital technologies and always-on connectivity are ushering in extraordinary business opportunities. Yet, the proliferation of mobile apps, cloud-based data, and “anywhere, anytime” expectations are forcing leaders to approach IT in radically new ways.

Top 10 technology trends in 2014
Source: 6th Annual Digital IQ Survey, PwC

The 10 technology trends above seam to be on top of today’s executives. Ranked by current investment levels, the findings provide a part of PwC’s  6th Annual Digital IQ Survey.

Ten tech-enabled business trends to watch

M500 Watch Phone by SMS Technology Australia
Image by inju via Flickr

Two-and-a-half years ago, McKinsey described eight technology-enabled business trends that were profoundly reshaping strategy across a wide swath of industries. Since then, the technology landscape has continued to evolve rapidly. The dizzying pace of change has affected those original eight trends, which have continued to spread (though often at a more rapid pace than anticipated), morph in unexpected ways, and grew in number to ten:

1. Distributed cocreation moves into the mainstream

By McKinsey’s estimates, when customer communities handle an issue, the per-contact cost can be as low as 10 percent of the cost to resolve the issue through traditional call centers. Other companies are extending their reach by using the Web for word-of-mouth marketing. However, since cocreation is a two-way process, companies must also provide feedback to stimulate continuing participation and commitment.

2. Making the network the organization

The recession underscored the value of such flexibility in managing volatility. McKinsey believes that the more porous, networked organizations of the future will need to organize work around critical tasks rather than molding it to constraints imposed by corporate structures.

3. Collaboration at scale

Across many economies, the number of people who undertake knowledge work has grown much more quickly than the number of production or transactions workers. While the body of knowledge around the best use of such technologies is still developing, a number of companies have conducted experiments, as one may see in the rapid growth rates of video and Web conferencing, expected to top 20 percent annually during the next few years.

4. The growing ‘Internet of Things’

Assets themselves became elements of an information system, with the ability to capture, compute, communicate, and collaborate around information – something that has come to be known as the “Internet of Things.” Embedded with sensors, actuators, and communications capabilities, such objects will soon be able to absorb and transmit information on a massive scale and, in some cases, to adapt and react to changes in the environment automatically. These “smart” assets can make processes more efficient, give products new capabilities, and spark novel business models.

5. Experimentation and big data

McKinsey affirms that some companies haven’t even mastered the technologies needed to capture and analyze the valuable information they can access. More commonly, they don’t have the right talent and processes to design experiments and extract business value from big data, which require changes in the way many executives now make decisions: trusting instincts and experience over experimentation and rigorous analysis. To get managers at all echelons to accept the value of experimentation, senior leaders must buy into a “test and learn” mind-set and then serve as role models for their teams.

6. Wiring for a sustainable world

Companies are now taking the first steps to reduce the environmental impact of their IT. Information technology is both a significant source of environmental emissions and a key enabler of many strategies to mitigate environmental damage.

7. Imagining anything as a service

In the IT industry, the growth of “cloud computing” (accessing computer resources provided through networks rather than running software or storing data on a local computer) exemplifies this shift. Consumer acceptance of Web-based cloud services for everything from e-mail to video is of course becoming universal, and companies are following suit.

8. The age of the multisided business model

Thr advertising-supported model has proliferated on the Internet, underwriting Web content sites, as well as services such as search and e-mail. It is now spreading to new markets, such as enterprise software: Spiceworks offers IT-management applications to 950,000 users at no cost, while it collects advertising from B2B companies that want access to IT professionals.

9. Innovating from the bottom of the pyramid

Hundreds of companies are now appearing on the global scene from emerging markets. For most global incumbents, these represent a new type of competitor: they are not only challenging the dominant players’ growth plans in developing markets but also exporting their extreme models to developed ones. To respond, global players must plug into the local networks of entrepreneurs, fast-growing businesses, suppliers, investors, and influencers spawning such disruptions.

10. Producing public good on the grid

Technology can also improve the delivery and effectiveness of many public services. At the UK Web site FixMyStreet.com, for example, citizens report, view, and discuss local problems, such as graffiti and the illegal dumping of waste, and interact with local officials who provide updates on actions to solve them.

For detailed analysis see McKisey Quarterly

Entertainment and media forecasted to grow by 5% annually until 2014

Advertising in Stratford, England
Image via Wikipedia

Following a year of decline in 2009, the global E&M market, as a whole, is forecasted to grow by 5% compounded annually for the entire period to 2014 reaching US$1.7 trillion, up from US$1.3 trillion in 2009. Fastest growing region throughout the forecast period is Latin America growing at 8.8% compound annual rate (CAR) during the next 5 years to US$77 billion in 2014. Asia Pacific is next at 6.4% CAR through to 2014 to US$475 billion. Europe, Middle East and Africa (EMEA) follows at 4.6% to US$581 billion in 2014. The largest, but slowest growing market is North America growing at 3.9% CAR taking it from US$460 billion in 2009 to US$558 billion in 2014.

Consumers seam to embrace new media experiences with staggering speed. The advancing digital transformation is driving audience fragmentation to a level not previously seen. However, the current wave of change is of a different magnitude from previous ones both in its speed and its simultaneous impact across all segments.

Although there is consistency in the inevitable migration to digital, the ways in which this presents itself and the pace of change continues to vary by market. Regional and country variations in current market size and future growth reflect local factors around infrastructure, access availability and consumer behaviour. For example the mobile internet explosion has already happened in Japan, accounting for some 53% of global spending on mobile Internet access in 2009 while other markets are still at the bottom of their growth curve.

Advertising on the rebound

Advertising revenues have been particularly hit by the turbulent markets and while there are signs of a rebound, this is still fragile in nature. Spend is unlikely to return to former levels. By 2014, the US advertising spend is expected to still be 9% below its level in 2006. Overall, global advertising will increase at a 4.2% CAR from US$406 billion in 2009 to US$498 billion in 2014. Internet advertising will join television in 2014 as the only media with spending in excess of US$100 billion.

The projections reflect the fragmentation of the market and behavioural changes of consumers. The advertising industry is responding to consumers’ shifting attention and has embarked upon a long-term journey towards total marketing or total brand communication. Brands are changing their focus from advertising on a medium, to marketing through, and with, content.

Conversing with consumers

Consumer feedback and usage provides the only reliable guide to the commercial viability of products and services, and the global consumer base is being used as a test-bed for new offerings and consumption modes. However, as responses are still evolving it is up to the industry to anticipate and identify where they are heading and pre-empt the needs and wants of consumers. PwC believes that three themes will emerge from changing consumer behaviour:

The rising power of mobility and devices: Advances in technology and products will see increasingly converged, multi-functional and interoperable mobile devices come of age as a consumption platform by the end of 2011. Consumers are increasingly demanding “ubiquity”, with content flowing across different devices to support ever-greater interactivity and convenience. They are using mobile in new ways, and downloading ever-increasing numbers of mobile applications (“apps”) to support their lifestyles. The ability to consume and interact with content anywhere, anytime—and to share and discuss that content experience with other people via social networks—will become an increasingly integral part of people’s lives.

The growing dominance of the Internet experience over all content consumption: Using the Internet is now one of the great unifying experiences of the current era for consumers everywhere—and their expectation of Internet-style interactivity and access to content will continue to expand across media consumption in every segment. This trend is initially at its clearest in television. Equally, people are already consuming magazines and newspapers on Internet-enabled tablets, and streaming personalised music services such as Pandora in preference to buying physical CDs or even digital downloads.

Increasing engagement and readiness to pay for content—driven by improved consumption experiences and convenience: Ongoing fragmentation means that media offerings will need greater consumer engagement and quality to get themselves heard – and paid. Consumers are more willing to pay for content when accompanied by convenience and flexibility in usage, personalisation , and/or a differentiated experience that cannot be created elsewhere. Local relevance will also become important once again as an aspect of convenience and relevance.

Revolutionising the business

Digital migration and the changes in consumer behaviour have put extreme pressure on existing business models. It has caused the industry to radically rethink its approach to monetising content as it strives to capture new sources of revenue, be it from transactions or from participation with others operating in the evolving digital value chain.

Inevitably this results in individual companies searching for where to position themselves in the new digital world. Partnering with other organisations is becoming imperative in order to create viable commercial content offerings while sharing the costs and risks. Increasingly potential partners are being found from a diverse set of industries.

Whatever the partnership or collaboration PwC identifies seven critical factors for operating succesfully in the new value chain:
• Strategic flexibility
• Delivery of engagement and reationship with the customer through the consumption experience
• Economics of scale and scope
• Speed of decision-making and execution, with the appetite to experiment and fail
• Agility in talent management
• Ability to monetise brand/rights across platforms
• Strong capabilities in partnership structuring and M&A targeting and integration

2010 – 2014 Media Outlook in numbers

• There were 12 countries in 2009 with E&M spending above US$20 billion, led by the United States at US$428 billion and Japan at US$164 billion. Of the leading countries, the People’s Republic of China (PRC) will be by far the fastest growing with a projected 12% compound annual increase, fuelled by a vibrant economy and large increases in broadband penetration that in turn propel other segments. Japan will be the slowest growing of the leading countries at 2.8% compounded annually.
• Internet access is a key driver of spending in most segments. Increased broadband penetration will boost wired access while growing smartphone penetration and wireless network upgrades will drive mobile access. Spending on wired and mobile Internet access will rise from US$228 billion in 2009 to US$351 billion in 2014.
• PwC expects a relatively flat market in aggregate global advertising and consumer/end-user spending in 2010, improved growth in 2011 and a return to mid-single-digit gains during 2014. Overall global advertising will increase at a 4.2% CAR from US$406 billion in 2009 to US$498 billion in 2014. Overall consumer/end-user spending will rise from US$688 billion in 2009 to US$842 billion in 2014, a 4.1% compound annual increase.
• Globally, the video game market will grow from US$52.5 billion in 2009 to US$86.8 billion in 2014, growing at a compound growth rate of 10.6%. This will make it the second fastest-growing segment of E&M behind internet advertising wired and mobile, but will be the fastest-growing consumer/end user segment ahead of TV subscriptions and license fees.
• The global television subscription and license fee market will increase from $185.9 billion in 2009 to US$258.1 billion in 2014, a CAGR of 6.8%. This will outpace TV advertising, which will grow at a CAGR of 5.7%. The biggest component of this market is subscription spending and this will increase at 7.5% CAR to US$210.8 billion in 2014. Asia Pacific will be the fastest-growing region with a 10% compund annual increase rising to US$47.1 billion in 2014 from US$29.2 billion in 2009.
• Total global spending on consumer magazines fell by 10.6 percent in 2009. PwC projects an additional 2.7% decrease in 2010, a flat market in 2011, and modest growth during 2012–14. As a result, spending will total $74 billion in 2014, up 0.7 percent compounded annually from $71.5 billion in 2009.
• Electronic educational books will grow at a CAGR of 36.5% globally throughout the forecast period yet will still only account for less than 6% of global spend on educational books in 2014.

Details on PwC’s study: www.pwc.com

The value companies have realized from their Web 2.0 deployments

McKinsey Quarterly conducted a survey in June 2009 and received nearly 1,700 executives from around the world, across a range of industries and functional areas. The survey focused on the value they have realized from their Web 2.0 deployments in three main areas: within their organizations; externally, in their relations with customers; and in their dealings with suppliers, partners, and outside experts.

Their responses suggest why Web 2.0 remains of high interest: 69% of respondents report that their companies have gained measurable business benefits, including more innovative products and services, more effective marketing, better access to knowledge, lower cost of doing business, and higher revenues. Companies that made greater use of the technologies, the results show, report even greater benefits. The survey also looked closely at the factors driving these improvements—for example, the types of technologies companies are using, management practices that produce benefits, and any organizational and cultural characteristics that may contribute to the gains. The results show that successful companies not only tightly integrate Web 2.0 technologies with the work flows of their employees but also create a “networked company,” linking themselves with customers and suppliers through the use of Web 2.0 tools. Despite the current recession, respondents overwhelmingly say that they will continue to invest in Web 2.0.

What benefits do Web 2.0 deployments bring to a company?

This year’s survey turned up strong evidence that these advantages are translating into measurable business gains: greater ability to share ideas; improved access to knowledge experts; and reduced costs of communications, travel, and operations. Many respondents also say Web 2.0 tools have decreased the time to market for products and have had the effect of improving employee satisfaction.

Looking beyond company borders, significant benefits have stemmed from better interactions with organizations and customers. The ability to forge closer ties has increased customers’ awareness and consideration of companies’ products and has improved customer satisfaction. Some respondents report that these customer interactions have resulted in measurable increases in revenues.

Respondents cite similar gains resulting from better ties to suppliers and partners: the ability to gain access to expertise outside company walls more quickly, lower costs of communication with business partners and lower travel costs.

How do companies use Web 2.0?

Among respondents who report seeing benefits within their companies, many cite blogs, RSS, and social networks as important means of exchanging knowledge. These networks often help companies coalesce affinity groups internally. Finally, respondents report using Web videos more frequently since the previous survey; technology improvements have made videos easier to produce and disseminate within organizations.

Respondents who report that Web technologies have strengthened their companies’ links to customers also cite blogs and social networks as important. Both allow companies to distribute product information more readily and, perhaps more critically, they invite customer feedback and even participation in the creation of products.

What’s next?

• Over half of the companies in this year’s survey plan to increase their investments in Web 2.0 technologies, while another quarter expect to maintain investments at current levels.
• The current downturn has increased interest in the technologies, presumably because companies count on extending their gains.
• About 1/3 of respondents have not yet achieved business benefits, either because they aren’t using Web 2.0 for one of the three major usage categories (internal, customer, and partner/supplier) or because they have yet to learn how to achieve measurable benefits with the tools they are using.

For a closer look at how companies are using Web 2.0 and their benefits, see the articles “Business and Web 2.0: An interactive feature,” and “How companies are benefiting from Web 2.0” on www.mckinseyquarterly.com

Global Entertainment & Media Forecast for 2009-2013

Over the next five years, digital technologies will become increasingly widespread across all segments of entertainment & media (E&M) as the digital migration continues to expand according to the PricewaterhouseCoopers Global Entertainment & Media Outlook 2009-2013.

The study shows that this recession will last longer than previous ones due to a steeper downturn and that the impact on consumer spending will be much steeper than in the past. E&M is not immune to that trend – consumer spending in E&M will fall by a projected 1.2% in 2009, remaining weak in 2010 and seeing only relatively low growth at 3.2% in 2011.

Responses to the recession will vary from country to country and region to region with some territories showing little ill effects while others experience steep declines. Latin America and Asia Pacific remain the fastest growing regions increasing at an annual compound rate of 5.1% and 4.5% through to 2013 reaching $73 billion and $413 billion respectively. Excluding Japan, the dominant country in the Asia Pacific region which accounted for 45% of total spending in 2008, E&M spending in Asia Pacific will increase at a projected 7.1% compound annual rate over the period of the Forecast.

According to PwC’s analysis, this ongoing migration to digital will occur and manifest itself across three parallel and interrelated dimensions:

Economic

The overall, effect of the current global economic downturn will be to accelerate and intensify the migration to digital technologies among both providers and consumers of E&M content and services.

Consumer behaviour

The accelerating digital transformation will in turn reinforce and proliferate new consumption habits and “digital behaviours”, as consumers seek (1) more control over where, when, and how they consume content, and (2) higher value from their entertainment and media choices.

Advertising

As digital behaviours become more widespread and embedded, a new generation of advertising-funded revenue models will emerge, aiming to reflect and capitalize on the evolving consumption habits by delivering advertising that is ever more targeted and relevant to the specific audience.

By 2013, the combination of these three change dimensions will give rise to a much more fragmented E&M landscape than today’s, characterized by a wide divergence of revenue models aimed at exploiting the digital opportunity. Traditional, long-established revenue models in segments such as TV and magazines will be replaced by more targeted and tailored models that will differ widely within and across segments and geographies.

E&M companies will have to commit themselves to participating actively in this industry-wide shift, or risk suffering lower growth than their competitors and ultimately possible extinction. As we said at the beginning of this article, they will have no place to hide from the remorseless digital advance.

More information about PwC’s study: www.pwc.com/outlook

Internal Audit changing expectations: from a controls-focused approach to a risk-centric mindset

Rapid change is quickly transforming the practice of internal audit raising significant issues for audit leaders and their chief stakeholders. As I highlighted in the article “Internal Audit Changing Expectations,” written for the “Financial Audit” Journal (published in April 2009), there is a clear gap between the current focus of many internal audit functions and where they need to set their sights in order to deliver greater value to their stakeholders.

Since the passage of the Sarbanes-Oxley Act (2002), internal audit groups have been concentrating on financial and compliance risks, traditional areas of focus where their confidence levels are typically high. Consequently, to address the rising expectations of their chief stakeholders, internal audit groups tend to sharpen their focus on strategic, operational, and business risks.

Within the article I concluded that, throughout the next years, the value of controls-focused approach is expected to diminish as internal audit tends to adopt a risk-centric mindset. Study results indicate that five identifiable trends – globalization, changes in risk management, advances in technology, talent and organizational issues and changing internal audit roles – will have the greatest impact on internal audit in the coming years.

You may find bellow a PDF copy of the article (Romanian version with English abstract):
“Internal Audit Changing Expectations,” Financial Audit Magazine No.4(52), Chamber of Financial Auditors of Romania, Bucharest, April 2009, 26-34

Five trends that will shape business technology in 2009 and five tips for a successful CIO during crisis

McKinsey’s report “Five trends that will shape business technology in 2009” shows that, since the last downturn, technology budgets are larger, businesses have automated more processes, employees make greater use of tech-based productivity tools, and e-commerce has moved to the core of day-to-day operations. At the same time, IT organizations have established better mechanisms to govern IT decision making and have consolidated local IT operations to cut costs.

Based on this combination of cost pressures and IT requirements McKinsey’s report suggests that:

1) The year 2009 will be a tipping point for the CFO’s involvement with IT. They may sign outsourcing deals, sell and lease back hard assets, place favourable vendor financing at the core of hardware and software purchasing decisions.
1st Tip: Successful CIOs will give the senior-management team practical ideas on how to optimize cash.

2) IT budgets in many organizations will come under tremendous pressure in 2009, reducing investment for new business capabilities.
2nd Tip: Successful CIOs will have to position themselves as honest brokers, pushing hard to evaluate IT investments in a fact-based way.

3) Senior executives that have used IT less successfully in the past will probably throw up their hands and shut off all discretionary IT projects for the duration of the downturn.
3rd Tip: The most effective course of CIOs will be to explain what it would take to improve the value equation for IT investments.

4) Policy makers and regulators will probably demand that IT systems capture more and better data in order to gain greater insight into and control over how banks manage risk, pharma companies manage drugs, and industrial companies affect the environment.
4th Tip: Successful CIOs should enhance their relationships with internal legal and corporate-affairs teams and be prepared to engage productively with regulators.

5) The vendor landscape will likely follow the current downward pressure on aggregate demand and massive uncertainty in currency markets. New entrants will grow rapidly and some players could experience significant reverses.
5th Tip: Successful CIOs will manage their vendor relationships as a portfolio so they will be well positioned as new winners evolve. CIOs will also need to be vigilant about how to manage transitions created by the consolidation or weakness of some service providers.

You may find McKinsey’s report at:
http://www.mckinseyquarterly.com/Organization/Change_Management/Five_trends_that_will_shape_business_technology_in_2009_2296