You thought 2020 was upside down? Welcome to 2021. Times are weird, not to mention challenging. With the pandemic ramping up the level of competition, it has never been so important for companies to provide customers with the experience they want, no matter which channel they choose to engage through.

Suddenly, over the last year, many businesses saw themselves forced to migrate to digital channels (HBR). In doing so, they had to face a stark reality in which three-year digital transformation programs needed to be completed in months. And that was just to stay relevant, not even to be cutting-edge.

In these challenging times, the ability to cope with, manage and embrace change is what can make you grow and endure. We believe that to survive and prosper in this new environment, technology will not only be an enabler of this metamorphosis but the essence of business strategy itself. And given our “new normal”, we believe that only those organizations who embrace this change of mindset will succeed.

In this and a follow-up blog post, we will present you with those trends we believe have shaped business over the last year and will continue doing so going forward. This will include:

• How working from home has influenced the workplace and empowered employees
• The need to modernize the core and how businesses are tackling this challenge
• Some highlights of the transformation that different products and services have seen over the last year (in part 2)
• The rise of customer experience and how businesses are competing to provide an effective, digitally-focused customer experience (in part 2)
• How the evolution of technology is creating a trust-crisis due to increasing data vulnerabilities and data exploitation (in part 2)

Curious? Let’s get started!

1.Working from home is here to stay

Working from home, distributed teams - all of this had been brewing for a while now but 2020 officially upended any remaining resistances. And with the pandemic largely still in full swing, this isn’t likely to change soon. But there’s more - according to Gartner, even after the pandemic, as many as 50% of employees may remain working from home for most or some of the time.

Naturally, this raises several questions. For one, if businesses continue operating in this manner, what are the tools and processes that will support and drive this change in the long run?

New collaboration tools

Jokes about Zoom meetings have become a prominent feature of humor over the last year but in truth, we could not have made it without all the various tools that came to our help. And for digital transformation to enable working from home, more and better such tools will be required.

Collaboration tools, in this sense, include:

• Conference and instant-messaging tools
• Cloud office solutions
• File sharing
• Collaborative project management tools
• Document management tools
• Shared calendars
• Online interactive training
• Shared whiteboards, and more

These are the backbone of a functioning team and are required to ensure the accessibility, connectivity, and compatibility of systems in the “distance economy”.

But the increasing use of such tools also raises questions about how businesses secure their operations, infrastructure, and data, as well as their clients’ data. Remember Zoombombing? The now-ubiquitous Zoom waiting room was a direct result of increased Zoom usage and the hijacking of online meetings in a targeted or random fashion.

Moreover, questions about security are also further highlighted by employees using different devices and connection types.

Digital and smart workspaces

Beyond collaboration tools, workspaces as a whole are expected to change and become more digital and smart. As Gartner VP and Distinguished Analyst, Matt Cain said: “The pandemic rapidly elevated many digital workplace technologies from nice-to-have to must-have status.”

Instances of such workspace digitalization include more Internet of Things (IoT) devices, virtual reality (VR) workspaces, motion sensors, facial recognition, and more. This trend is usually thought of in the context of office and desk spaces delivering new ways of engaging with work and improving productivity and efficiency.3

Yet, in the context of the pandemic, it is expected that this will also begin to spill over into homes. Its purpose will be to create an environment that adapts and enhances work in the context of the distance economy (HBR).

For example, guided tours of a new workplace, introductions to processes and procedures can now be conducted via VR instead of in-person. And while wearables are already quite popular, their use is likely to also increase as a way for employees to monitor their health and get regular reminders to take a break.

At the same time, those businesses that do return to working from an office will also face the need to adapt workspaces to become both safer yet more interconnected (Gartner).

Greater connectivity, simplicity, and integration

One additional consequence of the pandemic is the uptick in people who move away from cities. While big cities are not exactly on the brink of a mass exodus (Fortune), data from last year for both Europe and the U.S. point to an increase in people moving away from cities, either permanently or at least temporarily.

Given the differences in infrastructure outside of big cities, such a shift is also expected to create investments in connectivity in suburban and rural areas.

To address connectivity difficulties and differences, companies will need to prioritize digital transformation that increases systems’ simplicity and integration. Tools that are integrated and fit into a single cohesive digital work environment will become a priority, in order to, in turn, retain internal team and company cohesion.

Digital modernization is now a must for IT

The IT function has seen a veritable revolution over the last decade. 2020 has only accelerated this change. Without a doubt, today’s business is largely driven by and dependent on IT. But for IT to do its job and remain competitive, the right infrastructure and technologies need to be in place.

Moreover, with the added circumstances around the pandemic, such infrastructure needs to make it possible for business to be done from anywhere.

Some of the ways in which digital modernization is expected to occur will include the modernization of core IT systems and the adoption of new cloud service offerings. Greater cooperation with managed services providers and new approaches to innovation processes are also on the horizon.

Modernizing the core

Core legacy systems are those information technologies that while remaining vital to day-to-day operations have already become outdated in various ways. Replacing or upgrading such technologies is a major challenge for many companies due to the need to retain compatibility with older data formats or systems.

Reviving, reimagining, and modernizing the core (Deloitte) is one of the trends that is expected to take center stage over the next 2 years. Given the current economic climate, the business case for core modernization has without a doubt been made.

Yet, the cost of overall core modernization can potentially be prohibitive. For this reason, some companies are likely to turn to third-party platform management services to outsource some of their core capabilities, without incurring severe strains on their budgets.

Similarly, a move towards platform-as-a-service (PaaS) is also on the horizon. This is another way for businesses to shift core assets to platforms that allow for complex tasks to be executed through simple point-and-click operations. As such, no-code and low-code platforms present a simple, feasible, and very effective solution to the question of core modernization.

A platform first-strategy is further pursued by removing unneeded functionalities, re-platforming non-ERP capabilities, and focusing on paying down technical debt that has been accumulated over time. The latter is achieved by identifying and refactoring code within legacy systems to free up assets and create new strategies for their use.

One of the ways in which companies can approach the transformation of their core systems is by first conducting a modernization assessment. This can help them to determine how they can modernize, support, and maintain core business

IT services without disruptions. Based on such an assessment they can plan the steps that are needed and begin their implementation.

Edge computing and the distributed cloud

In strengthening the IT function over the next few years, edge computing is expected to become more popular. By bringing information processing, data storage, and delivery closer to where they are required (at the edge of the network), businesses can improve operations in several aspects. Edge computing reduces latency and saves bandwidth because it eliminates the need for data to pass through the core or cloud. This increases real-time data capabilities such as analyzing sales or manufacturing data at the point of origin and distributing results to other nodes within the network. This, in turn, allows for data to be used with greater efficiency.

Along the same lines, the move toward the distributed cloud (Gartner) also promises greater flexibility and improvements in performance. The distributed cloud redefines the concept of cloud storage to include the possibility for data to be based in different physical locations.

This enables businesses to comply with regulations regarding data privacy and sovereignty without giving up services. It also reduces latency by bringing the architecture, operations, and data closer to where it is used.

But in order to reap all of these benefits, companies should also assess their readiness to migrate to the cloud. This process can help them create an actionable roadmap that will guide them when navigating the journey.

Outcome-based managed services

An outcome-based model for managed services has already been gaining traction for several years. Now, managed service providers (MSPs) are increasingly becoming not only providers but also partners who are invested in business outcomes (Forbes).

Hence, the best service providers will be those who bring a host of tools to the table. These will include both AI and automation but also advanced analytics and reporting. All of these will serve to help companies deliver the best possible experience to their clients, while also having insight into the concrete results that these technologies deliver and how they impact the bottom line.

Moreover, to stand out from the crowd, good MSPs will need to deliver compliance with security, data management, and regulatory standards.

By providing all of the above, MSPs will effectively become partners who are actively helping businesses to innovate and achieve digital transformation.

Cooperative innovation

Today’s market requires businesses to expand their understanding of innovation to include a host of different parties, beyond organizational boundaries. While R&D departments remain vital, an approach that positions innovation within an ecosystem (Deloitte) is the next frontier for businesses.

Such parties can include customers but also government agencies, academic organizations, ecosystem partners as well as competitors. Beyond the benefits for a business, this model of cooperative innovation is sure to drive value for everyone involved. It provides access to a diverse set of capabilities and resources, while at the same time distributing risk and costs more evenly.

For example, thanks to a collaboration between IBM and Cisco, a Canadian telecom company was able to reduce service interruptions and improve performance reporting. By leveraging their respective technologies and strengths, IBM and Cisco were able to develop a solution that they then offered to the market.

Stay tuned for more technology trends

This is the first of two blog posts in which we will explore the technology trends that we expect will influence businesses in 2021 and beyond.

Stay tuned for the second part in which we will have a closer look at the impact of low-code platforms, AI, and automation. We will also examine the role that digitalization has played in verticals such as online education and telehealth, the rise and centrality of customer experience, and more!