The big three IT trends for 2015

It’s time to get over the squeamishness. The digital age is here and 2015 will not be a year for the weak-hearted. We watched 2014 change the rules of the game in business with the dawn of a new era. The new year is likely to enforce these new rules, without a safety net. So, if you’ve been watching tentatively from the sidelines so far, get ready to dive into the deep.

Let’s take a step back and look at some underlying changes in our business landscape. Presenting their assessment of the top strategic technology trends for 2015, research firm Gartner identified 10 diverse projections.

But, as pointed out by David Cearley, Vice-President and Gartner Fellow, these covered three broad themes: the merging of the real and virtual worlds, the advent of intelligence everywhere and the technology impact of the digital business shift.

These lie at the very core of the transformation we are witnessing around us. Keeping these seismic shifts in mind, here’s what I see ahead.

Any lingering doubt that enterprise digitalisation is the way forward has been removed by the phenomenal success stories of digital giants such as Google, Amazon, Netflix, as well as new and nifty digital startups such as Airbnb. Most business leaders acknowledge this too.

Yet, only a small percentage has embraced digitalisation in a comprehensive manner so far. The majority have just dipped their toes in the new waters with digital experiments and ‘bolt on’ SMAC technologies (social, mobile, analytics and cloud technologies), while some are still in denial.

In a global survey of chief information officers, Gartner found that “51 per cent CIOs are concerned that the digital torrent is coming faster than they can cope” and “42 per cent CIOs feel that they don’t have the talent needed to face this future”.

This explains the erratic approach so far. However, 2015 will demand smart and decisive action to avoid falling off the radar. Business leaders will have to undertake digitalisation in a systematic and comprehensive manner.

According to Forrester Research, “Confused ownership of digital strategy, a lack of critical skills, and an ill-defined vendor landscape will leave many firms floundering over half-hearted digital strategies.” To stay in the game, they will have to commit themselves to being reborn as full digital businesses.

So, as I see it, 2015 will be the time for a total transformation through enterprise digitalisation across companies, industries, countries and continents.

And this transformation will envision collaboration across customers, employees, partners, suppliers and broader ecosystems.

The Internet of Things (IoT) is promising to redefine every aspect of our lives. It is already connecting and embedding intelligence in billions of objects, affecting billions of people around the world. And yet, we’re just scratching the surface here.

The real giant wave in 2015 would be the Industrial Internet of Things (IIoT). While it may sound like it’s just the Internet of Things in an industrial setting, it is much more.

IIoT refers to a seamless integration of the physical and digital worlds through a set of actuators, sensors, embedded hardware and software that can track, optimise, predict and actuate.

Going beyond IoT, it weaves the power of Big Data with machine-to-machine communication to analyse the data being received so as to trigger improvement in operations, often in real time.

It is being touted as the next industrial revolution, with a potential to transform business and impact our lives far more than the Internet as we know it.

As companies across the board begin explore the limitless possibilities of Internet of Things, GE estimates that the IIoT could add as much as $12 trillion to global gross domestic product.

However, as in all things new, there will have to be cross-industry collaboration to build and adhere to the right standards for security and privacy.

That brings us to the third and final trend that I believe will see a huge upward swing in 2015: Engineering services outsourcing. In a product-centric world, R&D has traditionally been perceived as intellectual property.

It carried a halo of confidentiality, leaving little room for collaborative or complementary R&D. This bastion is now opening out. We are now entering into an era of ‘Software Defined Everything’ following a shift in focus from the product itself to an ecosystem of services focused on end user experience around the product.

There is need for development of the product, associated platforms, and industry and geo specific variants for companies to go to market.

Global competition and reducing product lifecycles are forcing companies to leverage their value chains to retain market share.

And, unlike earlier, cost and labour arbitrage are no longer the primary drivers. Several engineering engagements are being recast as win-win partnerships to leverage collaborative growth opportunities.

As companies begin to realise that 70 per cent of product development activities are domain neutral with only 30 per cent focused on product differentiation functionality, more and more businesses are opening up to outsourcing parts of their product development work.

There is also growing recognition that partnering with engineering service providers (ESPs) with a global footprint can help companies reach multiple markets faster, as they offer a ready talent pool for end-to-end product engineering involving a plethora of technologies.

With this clear advantage and their ready to use components, frameworks and methodologies, ESPs can accelerate time-to-market for companies seeking to be constantly ahead of their competition.

Moreover, as the world becomes increasingly connected through disruptive technologies such as mobility and smart products being applied across industry segments, ESPs can cross germinate best practices from unrelated industries to help their partners fast forward R&D.

As I see it, 2015 will see a buzz in the backrooms of business that are traditionally away from the spotlight: the digital teams, factory floors and the R&D labs, as they lead the way forward through smart transformation, smart machines and smart collaboration.

The writer is the president and CEO of HCL Technologies

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