What the megatrend technology is all around is the fact that you cannot change, you cannot compete without responding to the underlying changes in technology that are going on all round us.
81% of CEOs that we survey think that technology will transform their business in the next five years.
That means technology now is all encompassing. It’s very hard to stay in touch with your customers these days unless you adopt technology.
Adoption in the consumer landscape is rampant. Everyone is connected to the internet by a smartphone. Everyone has expectations in terms of how they interact with consumer products, retailing, telecoms companies across multiple channels.
Where is it going to go next? I think where it’s going to go back is going to be around handing power back to the consumer. So, I think the lines between consumers and sellers is going to blur.
The way that we see it at PwC is the first digital wave, in simple terms, another channel. We could sell to you over the internet. So you’ll recognise Amazon, recognise the impact of Google and lots of fairly traditional organisations just added web channel to their existing portfolio.
The second wave was really about what we call an economy of outcomes. So, it’s really about teaming up with the consumer to find an outcome. And a good example of that would be a number of companies that are involved in helping you live a healthier lifestyle.
The third wave is really going to be about consumers particularly taking that power back. So, you’ll start to own your digital brand. You’ll start to own who you are on the web. You’ll be expecting organisations to deal with you as an individual. You will expect them to know exactly how you want to be dealt with, to know what you want, to be good predictors of actually the things that might inspire you and get you to build a relationship with them. So, I see there will be a shift in power from the producers to the consumers as we go into the third wave.
Social, mobile, analytics, cloud, they will all affect the consumer. Social as in the different ways that you interact. My children use different social media tools than I do and the next generation will use different ones after that.
Mobile phone already is the predominant platform in many parts of the world.
Analytics will unlock a lot of that value.
Then cloud means you might store information, you store videos, you store photos. You have almost unlimited access to processing and memory power out there.
We’re now talking about information as an asset in the business. So, it’s definitely at the top of the agenda and it’s, I think, very much in response to the adoption of technology by consumers.
One of the interesting things about the technology landscape is that it is changing the way that we interact as individuals. Look at things like Facebook, LinkedIn, they allow you to have a network of thousands. That transforms how you can access information, how you can organise yourself, how you can go to market. So, on both sides, both on the consumer side and on the production side of the economy we’re finding there are just new models that are being underpinned by different ways of using technology.
This explosion in information and this explosion in our ability to be able to put that information together in different combinations and understand at a very detailed level about you as an individual. Now, that’s going to have some profound social consequences and I think some of the smarter organisations out there are recognising that where we are going next is we have to give that power back to you as an individual.
One of the things you’re seeing with technology and the speed of change is that it is just bypassing traditional evolutionary steps in the marketplace. If you look at markets like Africa, there have been just generations of technology which have been bypassed. So, fixed line telecoms, for instance, the whole of the African sub-continent is about mobile and manifests itself through in medicine, it manifests itself through cashless payment systems. So, large parts of Africa are actually living a cashless economy, so they’re breaking past western expectations of what the development path will be and this is happening all around the world.
So, we are responding in various ways. We’re looking at how we deploy technology to help us with challenges around forensics. The world of big data is one which opens lots of opportunities in terms of how we can deliver forensic services to our clients. In Consulting, we are creating our own technology capability. We absolutely recognise that you can’t deliver change in the 21st century without understanding deeply the technology drivers of it and how you implement and change technology.
It is not about having a technology strategy. It’s about having a strategy which understands the impact that technology will have on your business. I think this idea of putting technology into a bucket and it is separate from how you organise the rest of your organisation is gone.
The pace of change is not going to slow. The pace of change is going to accelerate and being open-minded to that, recognising the skills and the capabilities that you need to have within your business in order to deal with that.
Those organisations have to be able to adapt to that demand and respond and the ones that are agile and able to respond to it are the ones that are making headway in the marketplace.
The price of new technologies continues to fall dramatically; the cost of DNA sequencing per genome has fallen from $96m in 2001 to less than $6,000 in 2013. New technologies are no longer solely the privilege of developed economies and the time it takes to go from breakthrough to the mass market is falling. In the US it took 76 years for the telephone to reach half of the population, the smart phone did it in less than 10.
The impact of digitisation has been particularly profound. The technology based around the internet has already created extraordinary value: in fewer than 10 years since its initial public offering, Google’s revenue grew from $3 million to $60 billion.
The transformative potential of digital in the next decade is immense. In the consumer market, we think that this transformation will play out over three digital waves:
Companies will find new value in this evolving market place by bringing together the four key aspects of digital: Social, Mobile, Analytics and Cloud. It will no longer be enough for companies to form a digital strategy to succeed in this world, they will need a business strategy fit for the digital age.