Digital delivers a silver lining, Trends for 2021 and beyond

2020 has delivered a seismic shift in the way we live and work. The pace of change, and the price of not changing fast enough, has never been more evident. There is no doubt that the most successful companies had already aligned their digital and corporate strategies before the pandemic meaning they were faster to adapt, prioritising innovative solutions and investing in new digital technologies.

According to a new survey by McKinsey “Covid-19 has pushed companies over the technology tipping point and transformed business forever”. The report goes on to say that, “Among the biggest differences between the successful companies and all others is talent, the use of cutting-edge technologies, and a range of other capabilities. A related imperative for success is having a culture that encourages experimentation and acting early.”

As we look ahead to a new year, 2021 will be an opportunity to build a positive legacy from the scale of corporate, social, and technological knowledge gained in 2020.

Digital led businesses by their nature are future-focused, innovative, and agile in both development and delivery. Traditional businesses that do not embrace digital transformation are finding challenger brands disrupting their industries and forcing transition from the inside out. With Amazon resetting customer expectations on delivery, and Monzo and Starling Bank successfully reinventing the consumer banking journey, traditional businesses are racing to catch up.

If 2020 was about widespread digital disruption and adoption, 2021 will be about building on that capability to drive further innovation and more intuitive solutions. The intrinsic value of enhanced digital capability is clear, and a new level of strategic importance has been established. Based on our experiences, Norman Broadbent has identified five key elements to enhanced digital capability in the year ahead:

Cloud Migration

A Cisco study confirmed that cloud traffic would represent 95% of total data centre traffic by 2021. The study also identified that the demand was driven by both consumer and business applications, “Consumers favour cloud for streaming video, social networking, and Internet search. Business users favour cloud for ERP, greater collaboration, analytics, and other digital enterprise applications – these are all leading growth areas.”

Cloud offers greater agility and flexibility which supports faster innovation, but Covid-19 forced the migration most were expecting over the next 2/3 years to happen in less than a month. According to Accenture, “As an on-demand, self-service environment, cloud is now vital to achieving end-to-end digital transformation. Now, more than ever, cloud is vital to help businesses reopen, reinvent, and outmanoeuvre uncertainty.” Cloud-based services are increasingly favoured for supporting innovation in data insight as cloud-based data lakes are more suited to the complex deep learning required for AI and machine learning applications.

Amazon Web Servers (AWS) were the first to launch a cloud computing and infrastructure “as a service” back in 2008, with Microsoft Azure a heavyweight second and favoured by many who already use their operating systems. The rivalry with AWS will no doubt continue in 2021, fuelled by Microsoft landing the Pentagon’s $10 billion Jedi cloud contract. Cloud is the hottest ticket and the battle for share is driving innovation in AI, analytics, and data capability for us all.

5G and Enhanced Mobile Connectivity

Mobile connectivity is set to reach new levels of sophistication and capability next year. The continued roll out of 5G promises a significant increase in the speed and quality of mobile connection and more cloud-based data will support even smarter apps. The news in October 2020 that the latest iPhone 12 finally supports 5G is a significant step in the widespread adoption of this technology.

Looking at mobile content, 5G will enable real-time Predictive Analytics and Artificial Intelligence (AI) allowing developers to create highly personal apps that are more intuitive, and AR/VR will add another layer of engagement – they all offer the opportunity for greater User Experience (UX).

There are also significant commercial benefits provide by 5G and real-time data. SalMar, one of the largest global farmed salmon producers, is using 5G to monitor the well-being of fish in the world’s first offshore fishery. Image recognition algorithms detect when fish are over or under-feeding, and automatically release food and medicine to keep them healthy.

AI

Artificial Intelligence has increasingly been on the radar, but the volume of data collected in 2020 particularly on healthcare (largely around infection rates and behaviour) has been unprecedented. We expect to see this continue in 2021. This rich data will inform increasingly sophisticated applications and insights using AI. As our patterns of behaviour continue to alter next year, and as more and more activity takes place online or in a traceable capacity, we expect to see a greater use of data analysis, machine learning and AI.

AI is supporting advancements in a myriad of settings particularly using Computer Vision systems that rely on artificial neural networks to enable the effective interpretation of images. Facial recognition technology is increasingly being used and vehicle manufacturers are competing to add more autonomous features to their cars. There are also less well-known applications. In medicine, Computer Vision systems help diagnose disease and extend the sight of surgeons during operations. In agriculture, crops are monitored for signs of pests or disease meaning treatment is faster, and a John Deere semi-autonomous combine harvester uses AI to detect the optimal route through crops after analysing the quality of grains.  As the versatility and capability is increasingly understood we expect to see even more innovative examples in 2021.

Cyber Security

With the rapid growth of global data, from 4billion terabytes (4 zettabytes) in 2016 to 96 zettabytes in 2020, coupled with a similar growth in the ways we want to access that data, such as smartphones, wearables, tablets, cars, tv’s etc, the job of protecting it has become more important than ever. Access to the vast array of tools needed to commit a cyber-attack are widely available on the dark web, reassuringly estimated to be 5,000 times bigger than the surface web.

According to Roger Grimes, a 30-year tech industry road warrior who spent 11 years as a Principal Security Architect at Microsoft, “Every company will be hacked.” Healthcare providers were already a target before the pandemic but our increased reliance on them has made them even more vulnerable.

So, how do we combat the increased threat level? The current shortfall of cybersecurity talent is 4 million worldwide, according to the ICS² latest cybersecurity workforce study. This is not something we can just hire our way out of or leave to an overstretched team. Successful organisations will rapidly improve their understanding of cyber security through widespread training and development, creating a culture of collective responsibility.

Extended Reality

Like many elements in this article, Augmented Reality (AR) and Virtual Reality(VR) are not new. However, their value and versatility have been enhanced by our changing patterns of behaviour and the increase in capability and connectivity provided by cloud migration and 5G roll-out. Aside from enhanced gaming and experiential applications there are also innovations in education and medicine that are very relevant in the current environment. Using AR and VR, classes could be taught virtually, avoiding the need for crowded classrooms. Teachers can transport students to experience the culture, events, or examples they are describing – foreign countries, historical events, the formation of stars etc. In medical applications, opticians can use VR to conduct a full eye test remotely using high-definition cameras. An AR tool then allows customers to see a range of glasses on their own face, all without leaving home. Physical travel may still be limited in 2021 but virtual reality will be transporting us way beyond our immediate environs.

Moving Forward

The pain most organisations have endured this year needs to translate into positive changes in the year ahead. This positive change needs to be led by insight and inspired by innovation. We will have to continue to be brave and move forward, embracing technology and digital innovations that increase our efficiency, enhance our understanding, and improve our culture, enabling us to survive and thrive in 2021 and beyond.

If you would like to discuss this piece in more detail, the wider market, and/or your growth plans or challenges, please do not hesitate to contact Andrew Smith via andrew.smith@normanbroadbent.com for an initial confidential discussion.