10 Trends to Watch That Will Affect Your Business ... McKinsey Quarterly

Colleagues,

SourceLink: McKinsey Quarterly

Every so often, a combination of trends intersect that require us to re-examine and re-evaluate our business strategies. I think we are in one of those times. Particularly, as it relates to advances in medical technology. However, these medical evolutions are playing out against a backdrop of even larger societal and technological changes. It is important that we understand them ...

... In this excerpt from a recent McKinsey Quarterly article -Clouds, big data, and smart assets: Ten tech-enabled business trends to watch - the authors deftly describe the 10 driving forces that they believe will most affect us as we manage our organizations and programs over the next few years...

ENJOY!

CC

"I'm very interested in the future because I plan to spend the rest of my life there." , Robert Wood Johnson

AUGUST 2010 • Jacques Bughin, Michael Chui, and James Manyika

The 10 trends to watch are:

1. Distributed Co-Creation Moves Into The Mainstream
... the ability to organize communities of Web participants to develop, market, and support products and services has moved from the margins of business practice to the mainstream. Wikipedia and a handful of
open-source software developers were the pioneers. But in signs of the steady march forward, 70 percent of the executives we recently surveyed said that their companies regularly created value through Web communities...

2. Making the Network The Organization
... the Web was starting to force open the boundaries of organizations, allowing nonemployees to offer their expertise in novel ways. We called this phenomenon “tapping into a world of talent.” Now many companies are pushing substantially beyond that starting point, building and managing flexible networks that extend across internal and often even external borders...

3. Collaboration at Scale
... the number of people who undertake knowledge work has grown much more quickly than the number of production or transactions workers.... As a result, there is broad interest in collaboration technologies that promise to improve these workers’ efficiency and effectiveness ... as we see in the rapid growth rates of video and Web conferencing, expected to top 20 percent annually during the next few years...

4. The Growing "Internet" of Things
... assets themselves become elements of an information system, with the ability to capture, compute, communicate, and collaborate around information—something that has come to be known as the “Internet of Things.” Embedded with sensors, actuators, and communications capabilities, such objects will soon be able to absorb and transmit information on a massive scale and, in some cases, to adapt and react to changes in the environment automatically. These “smart” assets can make processes more efficient, give products new capabilities, and spark novel business models...

5. Experimentation and Big Data
... What if you could analyze every transaction, capture insights from every customer interaction, and didn’t have to wait for months to get data from the field? ... These trends are broadly known as “big data.” Technology for capturing and analyzing information is widely available at ever-lower price points. ... This trend has the potential to drive a radical transformation in research, innovation, and marketing.

6. Wiring for a Sustainable World
... environmental stewardship and sustainability clearly are C-level agenda topics. ... becoming an important
corporate-performance metric—one that stakeholders, outside influencers, and even financial markets have begun to track...

7. Imagining "Anything as a Service"

... create services around what have traditionally been sold as products. ... In the IT industry, the growth of “cloud computing” (accessing computer resources provided through networks rather than running software or storing data on a local computer) exemplifies this shift. ... Software as a service (SaaS) ... is growing at a 17 percent annual rate. ... many urban consumers are drawn to the idea of buying transportation services by the hour rather than purchasing autos. City CarShare and ZipCar were first movers in this market, but
established car rental companies, spurred by annual growth rates of 25 percent, are also entering it...

8. The Age of the Multi-Sided Business Model

Multisided business models create value through interactions among multiple players rather than traditional one-on-one transactions ... Take Sermo, an online community of physicians who join (free of charge) to pose questions to other members, participate in discussion groups, and read medical articles. Third parties such as pharmaceutical companies, health care organizations, financial institutions, and government bodies pay for access to the anonymous interactions and polls of Sermo’s members...

9. Innovating From the Bottom of The Pyramid
The adoption of technology is a global phenomenon, and the intensity of its usage is particularly impressive in emerging markets. ... disruptive business models arise when technology combines with extreme market conditions, such as customer demand for very low price points, poor infrastructure, hard-to-access suppliers, and low cost curves for talent. ... global players must plug into the local networks ... spawning such disruptions...

10. Producing Public Good on the Grid

... Technology can ... improve the delivery and effectiveness of many public services.... Exploiting technology’s full potential in the public sphere means reimagining the way public goods are created, delivered, and managed...

... For the first six trends, which can be applied across an enterprise, it will be important to assign the responsibility for identifying the specific implications of each issue to functional groups and business
units. The impact of these six trends—distributed cocreation, networks as organizations, deeper collaboration, the Internet of Things, experimentation with big data, and wiring for a
sustainable world—often will vary considerably in different parts of the organization and should be managed accordingly...

... Three of the trends—anything-as-a-service, multisided business models, and innovation from the bottom of the pyramid—augur far-reaching changes in the business environment that could require radical shifts in strategy...

... the tenth trend, using technology to improve communities and generate societal benefits by linking citizens, requires action by not just senior business executives but also leaders in government,
nongovernmental organizations, and citizens...

... Across the board, the stakes are high... the results of a recent McKinsey Quarterly survey of global executives on the impact of participatory Web 2.0 technologies (such as social networks, wikis, and microblogs) ... found that deploying these technologies to create networked organizations that
foster innovative collaboration among employees, customers, and business partners is highly correlated with market share gains...