At the start of 2020, nobody could have predicted that a pandemic would accelerate digital transformation at such an astronomical pace and scale. COVID-19 disrupted our strategies and associated assumptions, and forced us, almost overnight, to rethink our best-laid plans. It made businesses, educational institutions, healthcare service providers, and governments more dependent on technology for their operations. It has led companies to shift to new systems and processes, rethink ways of delivering new digital customer experiences and resilient supply chains, and find novel digital methods to ensure business continuity, all within months.
As we may have experienced, expanded connectivity along with the Cloud and associated services are now table stakes for digital transformation. The adoption of public (and hybrid) Clouds had an integral role to play in making Cloud (and multi-Clouds) the ‘new normal.’ In fact, the continually evolving Cloud extended its services to include other technologies that we discuss below. This makes Cloud platforms the dominant category of technologies enabling digital transformation.
Our technology trends for 2021 seek to explore the outlook for the “top 10” technologies for the year(s) ahead, and also look at their applications and business impact. It is important to note that some of these technologies were initially introduced as early as 2010 and have matured over the decade with more relevant “use cases,” and have now been widely adopted across enterprises and industrials.
- The IoT Landscape and its Applications will Transcend Industries
As per IDC’s latest Worldwide Semiannual Internet of Things (IoT) Spending Guide, spending on software and hardware related to IoT is projected to grow at a CAGR of 12.6%, from $726 billion in 2019 to $1.1 trillion in 2023. IoT is critical to enable digital industrials (Industry 4.0) and smart connected systems, such as smart buildings, smart cities, smart infrastructure, smart grids, and the like. Industrial IOT will enable connected product development, smart manufacturing, resilient supply chains, and connected service, creating opportunities for new revenues, better experiences, and cost efficiencies.
The evolution and maturity of the IoT Ecosystem – from sensors or actuators and edge or gateways to Cloud and connectivity providers, and then to IoT platforms, analytics, artificial intelligence (AI) and machine learning (ML) – has fueled the growth of Connected Systems. Humans and machines will create troves of potentially valuable data that will stay untapped and, therefore, remain a lost opportunity. With the Cloud, AI/ML, data engineering, and various edge technologies, these vast volumes and variety of data can generate insights to improve operations and develop new business models.
- 5G will Radically Transform Industries
5G has dramatically improved speeds (100x faster, 1,000x capacity vs. 4G), reduced power consumption, led to lower latency, and added massive connectivity to devices with ultra-high availability and ultra-high reliability. Since the initial launch of public 5G in early 2019, this disruptive technology has been transforming experiences in mass public venues (e.g., stadiums) and enabling smart infrastructure, public safety, and Industry 4.0. 5G is more flexible than Wi-Fi and can support a range of devices, sensors, wearables, and aggregation nodes enabling high-density, industrial-scale IoT.
Over the next five years, Private 5G Networks will drive enterprise transformation as these networks can be configured to organization- and location-specific needs. We see a wide range of industrial applications that come with improved latency and higher levels of security. These include opportunities across smart manufacturing, distribution centers, mining operations, airports, seaports, and the like.
- AI/ML will Become a Core Part of Business Strategy
McKinsey estimates that Artificial Intelligence (AI) can deliver about $13 trillion in global economic output by 2030. Enterprises are likely to use the different categories of AI technologies—computer vision, natural language, virtual assistants, and advanced machine learning—to improve their operations and customer experience. ML is poised to augment and, in some cases, replace human decision-making. In short, AI will become business-critical with ML technology and ML-driven solutions becoming a core part of business strategy.
AI has already been deployed for smartphone personal assistants, navigation apps, chatbots, and e-mail spam filters. The evolved use of AI will further help analyze interactions between businesses and consumers, humans and devices, and between connected devices. This will enable companies to discover patterns, reveal anomalies, make predictions and decisions, and generate actionable insights, thereby driving organizational performance. The modern data estate is key to data-driven digital transformation. However, innovation in responsible (ethical) AI should mitigate risks, such as inaccurate or incomplete data, snags in data flows, suboptimal models and algorithms, and security breaches. Effective AI governance and ML Ops (like DevOps) will require continual validating, monitoring, and verifying of AI-driven systems and outputs, ensuring optimal human and machine interactions.
- Edge Computing will Supersize Value from IoT
The growth of connected devices and their increasing computing potential have led to the generation of large volumes and a variety of data. However, enterprises can only analyze a small part of IoT data. By acting on data closer to the source, edge computing and edge analytics will help leverage more information for business decisions. The edge offers rapid, near real-time response to changing conditions.
Gartner predicts that by 2025, 75% of data will be processed outside a traditional centralized data center or the cloud. Edge computing, that promises quick and near-real-time insights with localized actions, will thrive together with cloud computing. 2020 was the breakout year for edge computing, which will co-exist with the cloud, the network, and end-point devices (and gateways) as cloud edge, mobile edge computing, and IoT edge, respectively.
Device security and device management will be critical prerequisites and must be addressed to successfully deploy end-to-end IoT applications at scale. The next frontier in edge intelligence will bring AI and analytics to (or closer to) the IoT device. will process massive data volumes “fast” with low latency 5G connectivity.
- Digital Twins will Make Businesses Agile
Digital twins were initially advocated for their ability to monitor, simulate, and streamline data from different devices. Today, digital twins are used to simulate equipment, processes, and people. More recently, the scale of this technology and its integration with AI, has allowed industry leaders to connect networks of intelligent twins to build insightful models of factories, supply chains, product life cycles, and smart cities.
Digital twins are increasingly underpinned by comprehensive, compatible, and reliable data. Intelligent twins will help businesses improve operations, discover, and predict anomalies for better maintenance of manufacturing processes and physical assets, and enable more autonomy. The technology can also allow organizations to dynamically adapt their strategies to new pieces of data they collect, thereby making them more intelligent and agile.
- Reality Tech will drive Rich User Experience
As the boundary between real and digital continues to thin, augmented reality (AR) will transform manufacturing, logistics, shopping, healthcare, hospitality, and several other industries. With real-time data and information from analytics, AR can provide a new interface to frontline workers to complete tasks in a more integrated manner, whether on-site or remote. On the other hand, virtual reality (VR) for digital simulation of lifelike scenarios will make education and workplace training more impactful for learners.
Google, Apple, and Microsoft have already offered their reality tech products to businesses and consumers. Innovative start-ups will also leverage Cloud and 5G to transform AR-VR devices and software for portable and scalable solutions. Over the next few years, well-funded start-ups will change the device and enable the software landscape to deliver scalability, portability, and speed to AR, leveraging the cloud and 5G. A few issues will need to be addressed, such as privacy rights and security (of biometric data, device usage history), and the dangers of “reality” modifications.
- Robotic Process Automation (RPA) will be Leveraged to Create Dynamic Workplaces
While some studies estimate that RPA threatens the livelihood of millions of knowledge workers, it is in fact, creating new job opportunities and modifying existing work roles. Gartner predicts that RPA software will clock in $1.89 billion in revenue in 2021, an increase of 19.5% from 2020.
While RPA to date has automated business processes, this year, RPA is set to become more intelligent, flexible, targeted, and integrated – and, perhaps, evolve as “extreme automation.” As a data-driven automation process, it will help companies complete mundane exercises and monotonous time-consuming tasks efficiently, faster, and cost-effectively allowing workforces to perform more valuable tasks that require human intelligence and creativity. Optimal distribution of work between machines and people will lead to higher productivity.
- Near-Field Communication (NFC) Technology will Grow
As a contactless payment technology, NFC has ushered in an era of convenient and secure financial transactions for businesses and consumers. After the launch of Apple Pay in 2014 and Google Pay in 2015, the use of NFC is on the rise. More customers today are willing to pay with chip-based cards, smartphones, and smartwatches.
In 2021 and the years ahead, such payment systems will be adopted more widely due to their convenience and simplicity. Since they are authenticated by biometric technologies, they are also more secure than swipe, OTP, and PIN-based options.
- Quantum Computing capabilities will expand and become Business Relevant
Quantum computing has significant potential in a world that is continuously being digitally transformed. While traditional computers use binary codes for their functioning, quantum computers employ quantum bits or qubits. The third state of qubits—called superposition—helps them to rapidly query, monitor, analyze, and act on data, regardless of the source.
Significantly faster than regular devices, quantum computers will trigger new breakthroughs in several industries. They can optimize machine learning for quicker diagnosis of illnesses, choose better production materials, and enlist effective financial strategies for investments and retirement planning.
- Cybersecurity will become the Foundation of Trust
Cybersecurity measures aren’t entirely new, and have been around as long as information technology. However, this component of digital transformation is evolving just as much as other technologies, primarily because the threat landscape is constantly shifting in a hyper-connected world. For example, with IoT and connected systems, the “attack surface” is expanding exponentially. Therefore, security in the age of porous perimeter(s) must start with zero trust – never trust, always verify.
The concerns for cybersecurity have become more acute with the growth of remote working, online shopping, telemedicine, and the surge in demand for advanced digital capabilities. In 2020 alone, cyber-attacks on healthcare facilities in the U.S. affected 17.3 million people as per the U.S. Department of Health and Human Services (HHS) Breach Portal. These security incidents can be devastating when such attacks are on autonomous cars, connected power plants, utilities, traffic systems, critical infrastructure, or industrial machinery. To prevent data breach incidents in a connected world, it will be essential to take a holistic view of physical infrastructure, operations technology, and information technology. At a macro-level, addressing cybersecurity, regulatory, and ethics together improves trust.
As we compiled this list, we realize that there are numerous technologies not addressed here – such as geospatial visualization, drone technologies, blockchain, 3D printing, and enabling technologies for content management customer experiences, and commerce – that will certainly have significant contributions to digital transformations during this decade.
An overarching trend is that Hyperscalers will further extend their core services to include many of the technologies discussed above – IoT, analytics, AI/ML, augmented reality, robotics (RPA), security, blockchain, and even quantum technology. Cloud and Cloud-enabled software-as-a-service (SaaS) platforms will inevitably become the core of digital transformation.
Digital Transformation will help transition to the Circular Economy. People are becoming more aware of the impact of their purchases on the planet. In this era, businesses are also expected to adopt sustainable practices for a circular economy—this is necessary to reduce environmental degradation and prioritize biodiversity while also ensuring future competitiveness. In a circular economy, wastage is ruled out. After use, things must be looped back into other production cycles. Also, business growth must not be dependent on the consumption of non-renewable resources, and materials must be used productively for as long as possible. By utilizing technologies that will drive transformation, industries can also reduce their energy expenses and move toward carbon neutrality goals as outlined in the Paris Agreement.
Finally, successful business transformations and growth in any sector depend on human-centric design in addition to digitalization. In an age where humans and technologies are working in tandem, soft skills and collaborative approaches will remain as relevant as ever. We must therefore continue to Design Tomorrow Together.
At CYIENT Digital, we track these technology trends, their applications, and their business impact on industries we serve – Aerospace and Defense, Automotive and Off-Highway, Rail, Energy and Utilities, Oil and Gas, Communications, and Hi-Tech. We explore what these technology developments mean for the future of your business. To learn more, get in touch with John Gonsalves or visit us at Cyient Digital.