According to IDC, companies will spend nearly $ 271 billion on digital transformation in 2020, but this will ensure new sources of revenue only 16% of them. Digital transformation spending will account for 51% of all IT spending in Europe by 2023.
Enterprise of the future
According to the Deloitte report, over the next 5 years, a total of just over 2,700,000 people will retire from the manufacturing industry. This will be the generation of people that came to this world during a great demographic boom after World War II. Today, there are as many as four generations of Baby Boomers on the labor market. This is a very large and experienced generation of people who have been on the labor market the longest.
When retiring, these people (potentially) take the knowledge and practice gained over the years with them. This is not only a threat to the industry but also a challenge. Businesses need to undergo a digital transformation as quickly as possible and focus on automation. Difficult access to specialists will affect many factors of a company’s work, even such mundane things as access to people who will be able to operate or repair a machine, or onboard new employees.
When we add further data from the European Agency for Safety and Health at Work to the lack of specialists on the market, it turns out that permanent access to specialized staff is a big problem. Work-related accidents and occupational diseases cost € 2,680 billion globally or 3.9% of global GDP. In Europe, this amounts to € 476 billion, or 3.3% of European GDP. In Poland, according to the Central Statistical Office, from January to September 2019, 52,866 people were injured in accidents at work.
According to IDC, companies will spend nearly $ 271 billion on digital transformation in 2020, but this will ensure new sources of revenue only 16% of them. Digital transformation spending will account for 51% of all IT spending in Europe by 2023 (source).
80% of CEOs feel the enormous pressure to introduce digital transformation (DX) into their businesses as soon as possible. IDC has prepared a simple agenda for all CEOs who do not know where to start. It consists of four points to focus on.
- The first one refers to customers. We should concentrate on building trust and empathy with our customers, and shift our business from capacity and efficiency to market conditions, and keeping a close eye on changes.
- Another point on the map: transformation into an intelligent organization, providing innovative services and experiences on a large scale and creating a dynamic working model.
- Then we should create an appropriate, critical infrastructure for changes, which consists, among others, of reliable digital services.
- After all, we should define new value in the digital economy, determine our role, the role of our partners and create a fully functioning industry ecosystem.
According to PwC, the entire transformation of industry into the digital model 4.0 will be a significant change in terms of organization and processes. 29% of people surveyed by PWC said that their organizations intend to use technologies to modify an already existing range of products. 27% stated that their companies wanted to expand their offer to include new, innovative products. The same number announced investments in data analytics services for other companies.
According to Capgemini, in 2017-2018 the number of smart industrial factories in the world increased by 58%. Only car manufacturers expect 24% of their factories to become smart by the end of 2022, and 49% of manufacturers have already invested more than $ 250 million in smart factories.
According to a report of the Polish Economic Institute, already in 2018, 13,632 industrial robots worked in Poland, 39% of them in the automotive industry.
According to this report, 29% of the work in Singapore will be done by robots whereas 14% is done by them now. Globally, 14.8% more industrial robots worked in 2018 compared to the previous year. One of the key findings of this report is that Polish companies use industrial robots to a much lesser extent than the most industrialized countries in the world or even our V4 neighbors.
However, the accumulation of internal factors (demographics, rising labor costs) and external factors (technological progress, the need to catch up with economic leaders) makes robotization an essential part of the development strategy of all companies in the coming years.
PWC indicates 6 steps for effective transformation:
- creating a strategy – a holistic view of the current situation,
- launching pilot projects, assuming that not all projects will be successful,
- precise identification of needs and resources,
- data analysis and collection is an effective key to Industry 4.0. Therefore, you should collect all possible data,
- building the right culture and growing beyond the company structure,
- creating an ecosystem with comprehensive development of products and customer service solutions.
The right strategy for the enterprise of the future
When conducting classes for startups, I’ve always been saying why you shouldn’t copy and model others and how it kills our creativity. In addition, we do not know why someone took such action and not another, and what situation forced them to do so. The same applies to large entrepreneurs. However, as the figures show, by 2022 as many as a third of European organizations will not be able to accelerate business agility and innovation precisely because of the culture of copying ideas from others.
The quantity of data in European enterprises has increased by 27% compared to the previous year. IDC suggests that in order to achieve “data maturity”, it is necessary to focus on consolidating data from different sources, then attempting to visualize, analyze, and eventually monetize them.
Correct, long-term, and implementable data analysis is not possible without the support of Artificial Intelligence. That is why, by the end of 2020, European AI spending will reach $ 10 billion. By 2025, 60% of European businesses will upgrade their core IT infrastructure to cloud solutions, delivering a 25% increase in productivity.
Customer Experience in the enterprise of the future
CX (Customer Experience) is a well-known practice of defining and perfecting paths that lead a customer to a series of brand encounters. Some of them involve, for example, buying products or services through a website. Others involve a conversation with the customer service chatbot, advertising, brand attractiveness, social media sentiment, the definition of factors influencing repeated purchases, email campaigns, returns, complaints, and even debt collection. CX practitioners try to combine data from different departments and systems in their company.
- CX indicators used to measure brand performance typically include
- CSAT (Customer Satisfaction),
- NPS (Net Promoter Score – how willing they are to promote the brand),
- ATV (Average Transaction Value), and
- CLTV (Customer Lifetime Value),
as well as trends of how these indicators change over time.
Six pillars of the Customer Experience
When we look at the polish KPMG report, we can identify six pillars of the Customer Experience in it. These pillars allow you to better understand what aspects are particularly important for the customer throughout the cycle of the consumer’s relationship with the brand and its products. These pillars include:
- credibility – how the brand promise is delivered,
- expectations – whether the customer knows what to expect,
- time and effort – how not to hinder the use of products and services,
- empathy – how to empathize with the specific situation of the customer,
- personalization – how to respond to the individual needs of the customer,
- and problem-solving – how to turn problems into positive experiences;
To highlight the importance of customer experience and what they are striving for, just look at the press release issued by Mercedes-Benz in July 2020. Britta Seeger, board member of Daimler AG and Mercedes-Benz AG responsible for marketing and sales, said:
“The COVID-19 pandemic has accelerated the digitalization process. We assume that by 2025, we will generate a quarter of global car sales, together with our trading partners, through online channels. Until then, our customers will book 80% of all visits online.”
Tax instruments supporting automation and robotization
Introducing tech innovations undoubtedly requires financial resources. We are all aware of the fact. However, in post-crisis time – it’s worth looking for external funds offered to companies who are willing to introduce new technologies. Moreover – a lot of countries that support the process of robotization and automation have instruments in their tax systems that may provide additional benefits.
In simple terms, we can highlight the following categories:
- solutions supporting automation based on favorable depreciation principles,
- solutions supporting automation based on tax reliefs or exemptions,
- solutions supporting the automated taxpayer,
- direct financial support for investments in technologies that automate the production process.
By 2022, 25% of Europe’s top 500 companies will evolve and focus their actions on digital technologies, the pursuit of business excellence, and sustainable development. If your country lacks tax regulations directly supporting automation and robotization processes in production (that’s our situation in Poland), you can focus on such mechanisms as a relief for R&D, IP Box relief, or favorable rules for the one-off settlement of losses.