Global sourcing trends

Bigger, better, bolder – The Changing Face of Technology

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News is abuzz with the emergence of niche technologies that has been attracting the attention of companies worldwide.  Consumer trends are driving the need for firms to re-think their traditional approaches and innovate, to adapt to the changing face of technology. With this, technologies are becoming potentially disruptive to business models as well as processes. Let us take a look at some of these disruptive trends that are grabbing headlines and their impact upon organizations.

Disruptive Technologies

On a global scale, Cloud computing, Internet of Things, Mobile computing, and Data and Analytics are rapidly altering the way firms are utilizing information technology in their processes, by facilitating knowledge management and increased collaboration among businesses. Sample the following statistics that highlight this trend. In 2015, cloud computing accounted for 33% of the overall IT expenditure globally. This year, Social, Mobility, Analytics and Cloud (SMAC) are collectively expected to offer a US$1 T opportunity.  Also, by 2019, cloud IT infrastructure spending is expected to reach US$52 B or 45% of the total IT infrastructure spending. According to recent surveys, the interrelated growth of the aforesaid technologies will drive record transformation among enterprises within the next three years.

Only recently Samsung, the electronic giant, announced that they are buying Joynet, an important player in the cloud computing market, thereby shifting their focus partly on software from what had been a complete hardware one. Joyent sells hosting services that helps customers to run their software in the cloud, a different business model to that of Amazon and Azure.

Along with these, cyber security is another field that continues to gain momentum, given the increased levels of access and connectivity across people, information and systems; and cybercrime that has risen in its sophistication, frequency, and scale. Besides this, artificial intelligence/cognitive computing and robotics are other technologies that are increasingly revolutionizing enterprise markets.

Technology innovation is also occurring in a localized manner, particular to a location. For example, the rapidly emerging biometrics technology is estimated to have the largest impact on business transformation in China, especially on the technology and financial services verticals.

Impact on Businesses

Besides increasing competition, disruption also impacts outsourcing contracts. Typical outsourcing firms are now reconsidering extension of their contracts as they move towards newer technologies. In cases of contract renegotiations, hiring multiple service providers or shorter contracts to accommodate the advent of newer trends has become the norm.

To retain or gain a competitive edge in the market, it is obvious that businesses are in the race of adopting disruptive technologies in their offerings. For example, traditional IT vendors such as Infosys and Wipro are now scaling up their capabilities to offer shared services or are tying up with cloud service providers such as Amazon.com Inc. and Microsoft Corp. Hexaware has also begun structured analytics of data at employee and project levels to deliver innovative services.

However, it is not all that easy. In some cases, companies have revealed being overpowered by the complexity of niche technologies, making it difficult to adapt. In such cases, companies face the challenge of managing their business transformation in a smooth way or even evaluating if the change is required or suitable to advance their business strategy. Finding the right skill sets to meet the business needs is another challenge. Companies such as Wipro and Tata Consultancy Services have reported increased hiring of contractual workers in the recent times, to overcome the shortage of the right skilled resources within the company.

Despite such challenges, the need to innovate persists. Customers are well-informed and continually seek better services. Hence, to stay ahead of the curve:

  • Companies need to stay abreast with the latest trends in the market.
  • Creating a holistic company-wide technology strategy on adoption of newer technologies could help building a clear vision for the firm.
  • Companies need to better invest in research and development to upscale products and services. To achieve this, some firms are also seen to be partnering with smaller firms that offer niche services (such as the case of Samsung and Joyent).
  • Investing in talent is another key task, through activities such as periodical employee training.

Also disruptive technologies are not just about improvisation and making our lives easier, it’s also a life saver. Take the case of Audi’s RS 7 Sportsback piloted driving concept with a 560hp five-door coupe and top speed of 305 km/h. The car relies on GPS signals for on-track orientation,  3D images are compared in real-time against graphical information stored on-board, which the car uses as further positioning information. With the help of Artifical intelligence, Audi plans to bring highly automated driving to our roads, bit by bit to create greater traffic safety.

Successfully embracing budding technologies is a dynamic, ongoing process. To track new emerging technologies and opportunities as well as assess the related risks, alerts and insights from Supply WisdomSM can be of value. Request your free trial today to see how we can help you.