We are all consuming information at an unprecedented pace. Technology is flooding us with data and literally providing it to our fingertips. Consuming data is the easy part, making sense of it and parsing out the relevant information is more challenging. “FOMO” (fear of missing out) is real and has made its way from our personal lives and into the workplace. If you feel like you are missing out on relevant information needed to make key decisions you are not alone. This is a growing challenge we are seeing across all industries. Below are some transformation themes I predict for 2021 and beyond.
Remote work has proven to be a huge success. Most companies saw little to no productivity losses and some even experienced productivity gains. With happier employees and the potential for long-term cost savings, remote work is here to stay. In speaking with many other CEO’s of both tech and non-tech companies they are all re-evaluating their office space strategy and the future of work. 2020 has forced us to work from home and in the course has proven to be as effective and productive as working from the office. This means that we can reduce our office space and as a result, reduce spend. Tools like Zoom, WebEx, Slack, and others have helped paved the way to bridge the communication gaps and improve workplace collaboration. These factors lead me to predict that companies will rethink their real estate strategy and double down on investing in all the latest technology tools to support employees working remotely. There is a lot of activity in collaboration technologies and investors are flocking to new technology that promises to make this new norm a mainstay.
We are used to getting data flooded to us in our personal lives particularly with social media, news outlets and the like. Yet in the workplace it seems like data is everywhere but nowhere. Companies have systems after systems collecting and mining data but they seem to be in silos operating as point systems, hard to access and providing little value. I predict that Big Data Analytics will be a larger focus this year than in the past. Simply because executives have become more data driven and are more likely to make decisions based on data than their gut. When my teams make bold projections and assumptions, I ask them to show me how we are going to get there – where is the data to support the assumptions. One thing is for sure, we know we have the data buthow quickly we can get it and make sense of it is the hard part. Every time a company adds a new system to manage a business process it creates more data that can be used in conjunction with other systems data to drive important decisions. Big Data analyzes data across all of these systems and produce trends and predictions about the business that is vital to making decisions. If you are not investing in this right now then you are already behind.
AWS predicts that its web services will double by 2024. Why? The cloud provides economies of scale and eliminates capital expenditures. That’s right, no more large capital purchases of equipment using up much needed cash that can be invested in sales, marketing or new product development. You can just buy it as a service and pay as you go. What a game changer for both large and small organizations. This has blown up the start-up world with entrepreneurs showing high tolerance for risk and creativity to produce and delight us with great products—in the cloud—made possible by the cloud. Fortune 500 companies have caught on as well. That’s why I predict massive expansion and adoption of cloud usage in 2021. 2020 has stress tested companies to see whether they will survive or thrive. Look around and you will see many of your favorite retailers are closing their doors while a small company like Zoom grew to a $40B value company almost overnight. Cloud providers such as AWS, Microsoft Azure, IBM, Google and others are making it easier by providing tools, fractional database licenses, and marketplaces for purchasing cloud solutions. In 2020 $1T of software was purchased from a cloud marketplace such as AWS. Both Fortune 500 companies and the government have embraced the cloud and has made it part of their larger transformation strategy. 2020 solidified their commitment and we can expect to see expansion in 2021.
I recently read a book from @ReidHoffman called Blitzscaling. Blitzscaling is when a company undergoes rapid growth in the face of uncertainty at the cost of efficiency. The book is focused on start-ups investing in rapid growth like Uber, Airbnb, Slack and others but also covers how this can be effective for large companies. Typically, after a company goes from hyper-growth to steady growth (and sometimes no growth) it needs to become more efficient. New revenues at any cost no longer applies and efficiency becomes a focus. Companies have undergone significant efficiency transformation plays over the years but I think this year it will be different. Uncertainty still looms from the impact of 2020 and revenues will not return to normal for another year. Companies have to become more efficient to improve the bottom line. Process improvements that drive operational efficiencies will be top of mind for most executives. I predict a significant focus on leveraging technology solutions including Robotic Process Automation (RPA), Machine Learning (ML) and Artificial Intelligence (AI) driving predictive analytics will be a focus in 2021. Not leveraging these technologies will leave companies trailing behind with slow to respond processes and less business agility.
It’s no surprise that retail has taken the biggest hit over the past decade. 2020 showed no mercy making it one of the worst years for retail. We have all seen empty stores in the mall with a lot of our favorite stores shutting their doors and moving to online completely. For those who have not invested in their online capabilities have found themselves completely unprepared and had to close their doors forever. An example of business model disruption that we will see is the continuation of people using food delivery companies to deliver their groceries and favorite restaurant food. This means supermarkets will see less foot traffic and more online orders to continue in 2021 and beyond. Supermarkets have to create new spaces and retrain staff to handle this new business model. Take-out services will become a permanent revenue stream for even the fanciest of restaurants. This is necessary to become agile and to improve bottom lines. We are also seeing large tech companies get disrupted by smaller startups. According to Datanyze, Zoom has 43% of the web conference market compared to Cisco’s 11%. Robinhood’s success of offering free trades has forced their larger competitors to remove fees from their trades thereby giving up significant revenues. 2020 has put a spotlight on the vulnerabilities of some of the largest companies putting them on notice to rethink their business model. I expect this trend to continue.
In summary, these are some key themes that will have an impact in 2021. With the vaccine process underway and optimism in the air people are starting to see the light at the end of this very dark tunnel. Personally, I remain positive and encouraged by the resilience of business leaders and their employees as well as the ingenuity of entrepreneurs and the investors who continue to bet on the future.