Published on in NewsDigital Transformation

As ever, the technology sector will move quickly in 2016. Looking ahead, I can predict two major trends – the race to digital and the skills shortage. Both present challenges, but are also opportunities for us in the twelve months to come.

The race to digital

Undoubtedly the biggest trend in the IT sector next year will be the race to digital. Of course ‘digital’ has been on the agenda for some time, but to date the focus for many businesses has been the front-end, enabling customers to interface through a variety of channels.

IDC expects worldwide spending on digital transformation technologies will exceed $2 billion in 2019 – underlining the scale of what’s happening in the coming months and years.

The real challenge this year will be for companies to digitise their back-end systems. This includes ordering systems, customer management systems and logistics.

With older systems in place, traditional brands have found that they are falling behind their younger competitors. These ‘pure plays’ started with a digital blank canvas, were able to implement digital systems from scratch and are now reaping the benefits.

Businesses need to digitise behind the scenes, in order to drive down their cost base and speed up their marker competitiveness. However, this is more costly and complex than the front-end, and over the next twelve months CMOs in brands should be warming up their CFOs to make the investment.

To stay price competitive and to be agile in the market through responding to change, bigger brands will need to embrace the end-to-end digital value change – sooner rather than later.

The digital skills gap

The digital skills gap will continue to impact in 2016, with tech companies struggling to recruit candidates with the necessary skills. This is the challenge that concerns me most – and with a shortage of pupils taking STEM subjects at school and university, it’s one that could hinder our economy for generations to come.

All stakeholders in the IT industry must take action to address this and encourage uptake of STEM from GCSEs through to university and career choices. We need to provide engaging role models from a variety of backgrounds; we need to provide opportunities for young people to engage with the tech sector; and we need to encourage children directly to invest time and intellect in technology, engineering and sciences.

As part of this move, we must also encourage uptake of STEM by young women. Currently girls are falling behind boys in these subjects, and this will negatively impact the talent pipeline for years to come.

We need role models from within the tech industry to speak with girls and young women at school, university and as they enter the working world, to show them the potential of a career in tech.

Diversity is crucial for tech companies to succeed – we need the broadest talent pool, with the widest range of skills and opinions, otherwise the UK tech industry will fall behind.

What other trends are businesses looking at?

Interest rates, and the timing of any future rises, will be a key focus for many.

Given the Fed in the United States has announced its first interest rates rise in years, all eyes will be on the Bank of England to see if we’ll follow suit here. However, we could be set for another 12 months of record low rates.

According to Fujitsu’s Anthony Duffy this may not happen until the final months of 2016, but any slowing of economic growth could push a rise into 2017.

Across all sectors, organisations will also be looking to beef up cyber security following a year where the hackers have seemingly finished on top.

We have all witnessed deadly combination of reputational damage and lost customers in the wake of high profile breaches this year, and businesses will rightly want to avoid the same.

However, Fujitsu’s Mark Stollery argues that many organisations still aren’t doing cyber security right. So 2016 has to be the year businesses get their houses in order, if they haven’t already done so.

Businesses will also be getting to grips with the potential of big data analytics, giving them an even deeper understanding of customers in real-time.

In retail for instance, our Rupal Karia predicts this could be used to anticipate the behaviour of customers in-store and online. This will in turn, allow them to upsell items across different channels, by creating personalised targeted offers for each individual.

It’s going to be another fascinating year for businesses – let me know in the comments if you have any other thoughts.

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