January 14th, 2021 | Business Transformation
No one doubts anymore that changes are necessary and inevitable to be sustainable.
External factors are causing a huge tsunami of changes that impact most companies in any industry around the world.
There is no doubt that 2020 made a huge impact on people’s lives and represented the turning point when we were all aware that life would no longer be as we knew it.
And these changes came to show us that the decade of the 20’s will shape the future of the next 20 years, in which technology will be the main axis that will permeate our daily lives, both on the personal level and in the management of companies – at all organizational levels – and independently from the industry to which the organization belongs.
At the management level we have confirmed that the value of companies depends on the imperative orientation of the service to the needs of the consumers, on the speed of adaptation we have to these changes, and on the differentiation we offer in terms of product or service. And without technology in the process, it is hard to compete in today’s marketplace.
The exposure to these factors has caused that the elaboration of business plans for 2021, and from now on, will dramatically change in the way resources are allocated, which is a challenge at a time when income has negatively and massively been affected.
Here are some of the changes that will take place in 2021:
Liderazgo.No manager can be held accountable for not anticipating the impact of COVID-19 on their business. However, they did have an obligation to establish a strategy for transforming the business and implementing changes in their organizations at least since 2018, a decade after the start of the financial crisis that marked the beginning of a social and economic structural change. For this reason, it is expected a significant departure of those managers who had not initiated change in their organizations prior to the pandemic.
New Job Opportunities. The need to have the right talent that enables to continue the digital transformation process will force companies to demand new professional profiles with experience in data analysis, e-commerce, digital security, and user-experience; and other professionals who have the strategic capacity to establish the technological ecosystem, to understand data management and the integration of the different platforms, which are essential to consolidate the technological transformation process. Also, factors such as work flexibility, work out of the office or project relationships will be demanded to a greater extent by these new profiles.
Operational Efficiency and Automation. The implementation of processes that allow the establishment and definition of employee tasks will be intensified, thereby minimizing duplication, and eliminating those that do not add value within the organization with the aim of maximizing operational efficiency that can reach levels of improvement higher than 20%-30%.
Highest Requirement for Marketing. The general decline in income, the more difficult economic environment and the emergence of new competitors, along with the great boost of digital channels will make it necessary to concentrate efforts on the acquisition of new customers and will reinforce the value of loyalty programs. Therefore, the management of the marketing budget will change towards media or channels that have a greater control of the return on investment.
The Challenge of the Intermediaries. Digitalization tends to eliminate intermediaries within the value chain; and due to the obligation of companies to increase efficiency, intermediaries will be affected in cases on which they cannot demonstrate a clear and defined value contribution. For example, in the case of marketing management, the greater weight of digital investment will accelerate operational internalization in those companies in which digitalization process is already underway, thus, reducing the role of intermediaries. These, in turn, will suffer in their profits.
M&A’s. Erosion of margins in mature and large-scale businesses will force large groups, for example, in sectors such as advertising, media, banking or tourism, with less capacity to reduce costs efficiently to strengthen the initiative on mergers and acquisitions, on which small and medium-size companies will have a relevant role enabling the transformation of larger organizations.
There is no doubt that the extension of the use of Blockchain technology within the logistic chain, transactions and payments, advertising, content or personal identification will allow an improvement in process efficiency; the application of AI (Artificial Intelligence) will intensify within the areas of customer service, financial markets prediction or in the development of video games, gaming or people recognition.
Industries such as Biotechnology, Health or Energy will lead sustainable development, which will be references of technological transformation in companies of different sectors.
2021 sets the beginning of a new age in the way of doing business, managing companies and developing talent. A year on which a strategic vision takes on greater importance in a complex context of economic imbalances and of increased competitiveness.
And the results of this adaptation will be evident over the next few years.
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