10 tech trends that will change business forever

There is no doubt that technology is changing the way we work. It’s so old-hat, it’s a cliché. But what is in doubt, it seems to me, is that this new technology is changing business for the better. The collaboration and innovation this new technology enables will irrevocably change the way organisations are structured and how business is done.

McKinsey Quarterly’s feature, Clouds, big data, and smart assets: Ten tech-enabled business trends to watch, is an excellent start to getting your head around these trends and what your business should be doing about them.

“The rapidly shifting technology environment raises serious questions for executives about how to help their companies capitalize on the transformation under way. Exploiting these trends typically doesn’t fall to any one executive—and as change accelerates, the odds of missing a beat rise significantly. For senior executives, therefore, merely understanding the ten trends outlined here isn’t enough. They also need to think strategically about how to adapt management and organizational structures to meet these new demands,” reports McKinsey.

The 10 tech trends you can’t afford to miss are:

1. Distributed co-creation

Otherwise known as ‘crowdsourcing’ , this is basically the ability to “organise communities of web participants to develop, market and support products and services”. It is no longer happening just on the fringes of business. Facebook and P&G have had considerable success with this and McKinsey estimates that when customer communities handle an issue, the per-contact cost can be as low as 10 per cent of the cost to resolve the issue through call centres.

2. Making the network the organisation

Tapping into talent across business units and even outside the organisation is the way to solve problems. Many global companies, such as Dow Chemical, are already building social networks of experts across their organisations, and even including ex-employees, such as retirees, in these networks. One global energy services firm was able to speed up service delivery while improving quality by 48 per cent by using web technologies to set up innovation communities and expand access to experts across the business.

3. Collaboration at scale

The ability to increase the productivity of knowledge workers is crucial, and collaboration is the way to achieve that. Video and web conferencing are just the start. Open-collaboration workspaces for documents, databases and the like, such as wikis and blogs, are an important first step. Global engineering firm Bechtel has reported lower launch costs and faster delivery times through the use of a centralised, open-collaboration database of design and engineering information.

4. The ‘Internet of Things’

Most easily explained as “when assets themselves become elements of an information system, with the ability to capture, compute, communicate, and collaborate around information”. We are only at the tip of the iceberg in terms of how these smart assets will radically improve processes, efficiency and enable new business models. Already car insurers are offering to install sensors in customers’ cars so that price can be determined by driving behaviour rather than demographic information. Medical sensors are being worn by patients for reporting changes in health to physicians.

5. Experimentation and big data

The amount of data now available – for a relatively small price – is astonishing. Many companies are already using live data, such as customer purchases and visits to websites, to adjust pricing and specials daily. To make the most of this data, however, companies need to experiment – to be brave and adjust the way they make decisions. They also need the expertise to analyse the data and make smart business decisions based on that. UK supermarket Tesco uses its loyalty card programme to make decisions on pricing, promotion and shelf allocation as well as to spot new business opportunities with customers.

6. Using technology for environmental sustainability

The growing demand for information technology is producing greenhouse gases equivalent to those produced by the whole of Argentina. McKinsey research predicts, however, that the use of IT in areas such as smart power grids, efficient buildings and better logistics planning could eliminate five times the carbon emissions that the IT industry produces.

7. Imagining anything as a service

“Technology now enables companies to monitor, measure, customize, and bill for asset use at a much more fine-grained level than ever before. Asset owners can therefore create services around what have traditionally been sold as products. Business-to-business (B2B) customers like these service offerings because they allow companies to purchase units of a service and to account for them as a variable cost rather than undertake large capital investments. Consumers also like this ‘paying only for what you use’ model, which helps them avoid large expenditures, as well as the hassles of buying and maintaining a product.” Streetcar in the UK and Zipcar in the US are classic examples, allowing as they do, consumers to rent cars by the hour rather than buy a car themselves.

8. Multisided business models

This is, simply put, a business model that has more than one type of interaction with its customers or more than one type of revenue. Advertising is the classic example: newspapers sell content to readers but the majority of their revenue comes from a third party: advertisers. Online businesses have been quick to capitalise on this; think about Skype and Flickr, which are both free for most customers but supplemented by premium fee-paying accounts and advertising. Other companies, such as Sermo – a social networking site for doctors – offer free services to members but then sell anonymous data collected from the site to pharmaceutical companies and healthcare organisations.

9. Innovating from the bottom of the pyramid

Multinational companies need to stop concentrating so much on how to expand their business model into emerging markets and start looking at how extreme conditions in these markets are producing truly innovative, technology-led solutions to the unique problems of these markets. Safaricom in Africa, for example, is now offering a service whereby virtual cash is loaded onto the mobile phones of people who find it difficult to get a bank account from traditional institutions. Multinational enterprises need to be establishing networks of local entrepreneurs and suppliers to come up with new solutions to local problems.

10.Using technology for public good

The role of governments in shaping global economic policy will expand in coming years. How governments can work with technology providers, citizens and NGOs to make use of the nine trends outlined above to improve services and sustainability will inevitably help improve the lives of citizens.

Read more:

There are reading lists and multiple examples of all the above trends in the article. I highly recommend a read:

McKinsey Quarterly, Clouds, big data, and smart assets: Ten tech-enabled business trends to watch, August 2010

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