The paradigm shift to a digital economy is not a technology issue – it is a business model transformation.
The global economic and geopolitical environments will be choppy and the impacts will vary greatly by country in 2018, which will make for more constrained IT budgets.
Additionally, the disintermediation impacts of the digital economy and trade disruptions and tariffs are disrupting businesses – and whole industries – that must be addressed by corporate executives and small business owners before their firms’ revenues are usurped by new or transformed competitors. To address these challenges, small business owners and IT executives must re-examine their culture, people and process concerns as well as the impacts caused by external pressures.
Externally, IT executives will have to work with non-IT teams to improve and restructure processes to meet the digital world’s AI, analytics, IoT, mass personalization and mobility requirements that demand more collaborative, interactive, personalized, and predictive real-time information.
Simultaneously, IT executives will have to address the data integrity and privacy and service level concerns that impact business outcomes, productivity, revenues and security so that there is more confidence in IT and the organization as a whole.
Internally, IT executives will need to increase their focus on analytics, automation, componentization, machine learning, operations effectiveness, orchestration, privacy, and security so that IT can deliver more and better offerings quicker and at a lower cost while protecting the organization from cybersecurity attacks and vulnerabilities.
An International View
Outside of the U.S., which had continued strong economic gains (except for the stock market which had good gains through September but gave it all back), the rest of the world experienced varying degrees of economic headwinds. The Trump administration’s political and tariff actions did not have a calming effect, but exacerbates the nervousness felt in most geographies.
The Brexit saga, immigration actions and reactions, and the shakiness of the Merkel government are reshaping expectations within the EU and beyond.
Turmoil in the Middle East and the West’s war of words with China and Russia are adding to the waves of insecurity. Uncertainties in Latin America, aggravated by the collapse of the economy in Venezuela, are impacting investment decisions and growth prospects.
In fact, across the globe there is an awareness of a both a new world order taking shape and the instability that goes with it.
Moreover, regulations such as the general data protection regulation (GDPR) and its equivalents in California and Canada, and cybersecurity breaches like those at Marriott and Facebook are forcing businesses to reconsider their culture, processes and views on privacy and security.
Therefore, executives must invest in transforming their business and drive process improvements to remain competitive, help contain costs, enhance compliance, minimize risks, ensure privacy, and improve resource utilization.
Below are four areas that will be focal points in 2019:
1. AI/Automation/Machine Learning/Robotics:
Artificial Intelligence (AI) is a required component to any digital transformation and senior corporate executives, including CEOs, have embraced it as key to solving strategic business challenges. However, there is a spectrum of AI options – basic workflow automation, robotic process automation, virtual agents, analytics, machine learning, deep learning, and reinforcement inference learning.
2. Compliance – Privacy:
GDPR went live in late May 2018 and one month later California passed the consumer privacy act (CCPA), which is expected to go live in 2020. While there are similarities between CCPA, GDPR and the Canadian Privacy Act, there are differences.
Added to that it is likely in 2019 other countries (and U.S. states) will pass their own privacy acts, creating a patchwork of requirements that firms must adhere to.
In addition, organizations will likely have to conform with the EU’s ePrivacy law (the “cookie law”) as well as any new PSD2 standards, which are still evolving. Thus, in 2019 IT executives will be hard pressed to keep up with compliance requirements globally while improving users’ support for compliance.
Small business owners and IT executives will need to work with auditors and regulators to develop better proactive processes that reduce the cost of compliance and risk exposure.