IDC’s Future Enterprise Podcast

Future Enterprise brings you thought-provoking and in-depth conversations on the leading edge of technology. Expert-led discussions are focused on how data and technology are reshaping the workplace, applied technology and software. They involve envisioning what the future of remote working will be like, or how organizations need to reshape their industries with digitally-enhanced products and services, or leveraging data for competitive advantages. Our podcast is for business and technology executives and offers applied examples from the field, showing technology trends in action.

Speakers in this Episode

What is this Podcast episode about? 

On this episode of Future Enterprise, you’ll meet three companies that have successfully leveraged digital technologies to dramatically improve the way they do business. Their stories will inform, entertain, and even inspire anyone who may be thinking about undertaking a similar transformation for their business. 

The Future of Digital Infrastructure Award 

It’s one of the most ambitious and important projects an organization can undertake, to future-proof its operations. It’s also a key differentiator in which companies will merely survive or thrive in the years ahead. We’re talking about a “digital core transformation,” and it is a truly massive undertaking. That’s why IDC created the Best in Future of Digital Infrastructure Awards. These awards are a way of recognizing organizations that have demonstrated innovation and excellence in preparing for the “next normal”. 

Our award winners embarked on digital transformation to enable better decision making to improve service delivery and align with customer expectations. They introduced new concepts and frameworks that enable IT and the business to work better together to fuel quicker and more efficient decision making.  

The “New Normal”:  Why Digital Transformation Matters  

The concept of digital transformation has changed. Your task as a business is to use digital capabilities to improve your customers’ experience and your ability to use data. To accomplish this, you need a digital infrastructure that is scalable, can be deployed everywhere and that you can operate effectively and efficiently and becomes a platform that enables you to operate successfully in a digital-first world. In our podcast episode, you’ll hear from some of today’s industry leaders about how it’s no longer competitive to make decisions based on the old adage of “keeping the lights on”. Listen to our podcast and learn why and who is “innovating at the speed of business”.  

What needs to be accomplished with a digital infrastructure transformation: 

1. A need for organizational education  

2. Changing a capital-centric business model to an operational experience focus 

3. Keep everyone focused on the big picture as the organization moves through the process 

Key insights for CIOs  

IDC Future Enterprise Podcast famously introduces a “lightning round” at the end of each episode, where you’ll hear from guest speakers at top global brands about a key takeaway. In this podcast, you’ll hear from Jim Diorio, Senior Vice-President of Global Technical Services at Tapestry Inc; Steve Samarge, Chief Technology Officer, Information and Digital Systems at Toyota Financial Services; and Bob Bender, Chief Technology Officer at Founders Federal Credit Union. Here are a few takeaways you can expect to learn from this group: 

• A recognition that technical innovation must be a core part of the company now, and not just the IT organization 
• While automation is a key component, people still matter. Teams must apply the discipline, and provide the insights into how automation and technology can be translated into value 
• Experience matters, but in a way that translates into value, improved knowledge, and visibility throughout the organization 

• You must prioritize change management as well as invest in up front planning before execution 
• Don’t try to do everything all at once. Small, incremental changes are important. Focus on those small changes that can be implemented quickly 

Learn about our award winners and listen to the Future of Digital Infrastructure Awards podcast episode.  

How should you embark on a digital infrastructure transformation?

IDC can help.

Business leaders are increasingly focused on technology to thrive, so much so that “technology” is the word of the year for CEOs in 2022. But beyond words, we’re seeing deliberate action being taken by CEOs to create a vision and strategy for the digital business era and to create new value. Insights from IDC’s 2022 Worldwide CEO Survey, a flagship study of 389 top executives from around the globe, will help tech vendors understand the priorities, investments and key success factors of CEOs in 2022, and will be discussed in an upcoming webinar.

The study reveals that CEOs have 5 key priorities in the context of the digital-first world.

1. Building New Skills to Lead Digital-First: Every CEO Must Become a “Tech CEO”

As CEOs look ahead to build the sustainable digital business, a new set of skills will need to be developed. Our global survey revealed that CEOs have a juggling act in terms of skills needed to lead the organization going forward. Traditional CEO skillsets are being displaced because of changing market dynamics and internal organizational needs. When asked about skills critical to CEO success, “digital know-how” topped the overall list, just ahead of business strategy acumen and people leadership. This reflects the recognition in the c-suite of technology as a way to compete. However, in the CEO role, the “know-how” is not about the bits and bytes, rather it’s about developing the digital vision and strategy, and executing on that strategy, in an informed way, with the right teams and technologies in place.

2. Balancing Technology Spending to Thrive… with Cost Management

CEOs told us loud and clear that technology spending continues: 88% of CEOs are planning to sustain or increase tech spend according to our global survey.

The investment in new technology has ramped up to meet the accelerated demand for digital capabilities, particularly over the past two years. And CEOs are optimistic about future digital revenue streams, as the average proportion of revenue from digital products, services and experiences is projected to increase 11 percentage points from 2022 to 2027.

Digital is a major part of our strategy. We are going to be investing approximately €1 billion over the next five years, approximately 200 million per year in digital.

Miguel Stilwell D’ Andrade, Chief Executive Officer, EDP

With the big bets being placed now on digital, the focus on financial returns will intensify particularly with inflation clouding the picture. This is putting increased pressure on cost management. One line item getting attention is workplace technology enhancements, as 47% of CEOs indicated they are planning to reduce spending in this area.

3. Managing an Ever-Evolving Set of Risks

What keeps CEOs up at night? When asked what political, social, and economic risks CEOs expected would have the greatest impact on their business in 2022 and in 2024, topping the list for both years was cybersecurity threats & regulations. This comes as no surprise given the rising threat levels and frequency of attacks experienced by businesses over the past couple of years. What’s more concerning to all businesses and governments is the increasing degree and frequency of cyber threats arising since the beginning of the Russia-Ukraine conflict. That was emphasized on March 21^st, when The White House Briefing Room of the U.S. Government released to the business community an urgently worded fact sheet entitled “Act Now to Protect Against Potential Cyberattacks”. This came on the same day that the European Commission proposed new rules to boost cybersecurity and information security in EU institutions, bodies, offices and agencies. Despite concerns about high levels of spend, our survey showed that CEOs are not likely to reduce expenditures on security. An issue adjacent to cybersecurity is digital sovereignty, which tied for top spot with cybersecurity threats when IDC asked CEOs about board priorities. Moreover, addressing new data sharing and compliance regimes was also a rising risk for CEOs looking ahead to 2024. The viewpoints on risk, particularly digital sovereignty, varied by region around the globe. It’s clear that balancing revenue generation and risk linked to tech investments is top of mind for CEO… and will have implications for tech suppliers. This balancing act needs to be managed very carefully.

4. Developing the Technology Leadership Function

It is the time for technology leadership – and more specifically the CIO – to shine. CEOs are increasingly seeing the importance of having the right technology leadership to succeed in a digital-first world. In fact, 89% see it as ‘absolutely critical’ or ‘very important’ to have the right technology leader in place to drive digital transformation in 2022. The CEO needs to develop a more direct relationship with the technology leader. IDC believes this role should have a seat at the leadership table. Although there is a current leaning towards having the CIO focus on risk management to deliver digital resiliency, over the next two years CEOs are expecting that CIOs will focus more business outcomes, agility and delivering new revenue streams.

55% of CEOs believe that it’s very important or critical to restructure their IT organizations in 2022.

IDC 2022 Worldwide CEO Survey

With that change, technology architectures need to evolve from focusing on managing IT, to building tech capabilities with a more external focus, that drives new value for the enterprise. IDC’s view is that CIO metrics should be updated accordingly.

5. Establishing New Engagement Models with Tech Vendors

As CEOs within enterprises develop new mandates, new skills and new teams, this will have a corresponding effect on their technology vendor relationships. CEOs will need to complement the skills of the CIO and team and look outward for guidance, resources, experience – and the ability to scale – in the digital-first world. This becomes an opportunity for vendors to play a trusted advisor role as nearly 1 in 2 CEOs need help building out a digital-first strategy. For vendors, this is the time to capture mindshare with CEOs. They are mapping out their new digital business strategies in a post-pandemic world – new ideas and insights are likely to be welcome today. Business outcomes and value will be the differentiators as technology vendors look to drive visibility and relevance with the CEO.

Learn More: Attend IDC’s Webinar on April 28^th

Join IDC’s Phil Carter and Tony Olvet as they dig deeper into IDC’s Worldwide CEO Survey findings and share highlights of innovative digital-first case studies from around the globe.

Our findings will be presented in greater detail in an IDC Webinar scheduled for March 17th at 11:00 A.M. U.S. Eastern time (16:00 GMT).

The current conflict between Russia and Ukraine has created a critical geopolitical turning point for Europe and the world, and the ITC market is not immune to its initial shock. While there is still uncertainty about the duration of the war, unforeseen development and new sanctions, the tech community must react to this evolving situation with short- and long-term planning, to minimize the spillover effects on their economies and digital markets.

The evolving geopolitical situation will affect global ICT demand in the coming months and years. According to our new IDC Global CIO Quick Pulse Survey, involving more than 60 technology leaders across the globe, 57% of respondents say they are reassessing their tech spending plans for 2022 in the aftermath of the uncertain geopolitical environment, with 10% expecting to make strong adjustments to their ICT investment plans.

“Given the fluid nature of the conflict, IDC recommends that companies identify weak links in their value chain ecosystem, develop agile supply chain strategies, and create action plans that enable them to anticipate and react to a range of disruptive market movements.”

Philip Carter, Group Vice President, Worldwide Thought Leadership Research

IDC is carefully evaluating the geopolitical situation and its impact on the ICT market, through its broad network of global, regional, and local analysts.  Given the characteristics of the conflict and the sanctions currently in place, we have identified the following key consequences for the global ICT market:

Tech Demand Fluctuation: The conflict has halted business operations in Ukraine while the Russian economy is feeling the early impact of Western sanctions. This will strongly affect tech spending in both countries with double-digit contraction of local market demand expected in 2022. Meanwhile, tech spending among Western European countries may increase in part due to expanded defense and security allocations.

Energy Prices and Inflationary Pressure: Tensions over the conflict in Ukraine will have wide ranging consequences on both energy prices and security of supply, particularly for certain European countries where cascading effects on price indices are already being felt. Most countries will need to quickly reassess their near-term energy plans while accelerating efforts to reduce their dependence on carbon-based energy sources.

Skills and Infrastructure Relocation: More than 100 global companies have established subsidiaries in Ukraine and many more have operations in Russia. The conflict has already displaced tens of thousands of developers in Ukraine and led to the relocation of some services in both countries. These relationships, along with the physical assets and personnel associated with them as well as any future expansion plans, will need to be reevaluated in light of the conflict.

Cash & Credit Availability: The financial sanctions imposed to date are presenting serious challenges to foreign credit availability in Russia, while creating potential losses on loans issued by EU countries to Russia. Without access to credit, most organizations will be forced to suspend new technology investments in the near term. The country is also suffering from a severe shortage of cash, which is significantly impacting consumer spending.

Supply Chain Dynamics: Exports of finished products and technology components to Russia will be significantly affected by the sanctions, but the impact to Western companies will relatively small given the size of the market. Imports of tech materials from Russia and Ukraine will also be affected, particularly in the semiconductor sector where supplies of neon gas, palladium, and C4F6 used in chip manufacturing will be greatly reduced. The conflict is also expected to further disrupt global supply chains as cargo is rerouted around the two countries and costs increase.

Exchange Rate Fluctuations: Russia’s currency plunged in value in response to the initial sanctions, making imports of IT equipment and services significantly more expensive. As a result, many companies are refusing to ship orders to Russia even if payment is possible. This also means that Russia’s own manufacturers of PCs, servers, and communications equipment will be unable to operate. Geopolitical tensions are also impacting other currencies throughout the region, including the Euro.

Russia’s invasion of Ukraine on February 24, 2022, and the ensuing escalation of events, is evolving daily. IDC Market Perspective provides a first take on the war’s impact on and implications for the global ICT industry, while providing recommendations to tech providers and buyers to help them rapidly adapt and react to fast-changing market conditions.

“While Ukrainian and Russian ICT markets will be the most affected by the war in the short term, with considerable declines expected in the short term and likely slow future recovery, few countries will be spared. IDC expects other European countries to be hit first and other geographies around the globe to face spillover effects on their economies and digital markets, particularly given the war’s likely impact on trade, supply chains, capital flows, and energy prices.”

Andrea Siviero, Associate Research Director, IDC EMEA

The report’s findings will be presented in greater detail in an IDC Webinar scheduled for March 17th at 11:00 am U.S. Eastern time (16:00 GMT).

Further Reading:

The Impact of the Russia-Ukraine War on the Global ICT Market Landscape — IDC’s March 4, 2022, First Take (IDC #EUR148926122)

This IDC report provides an initial assessment of the implications the crisis presents for the worldwide ICT market, while providing recommendations to tech providers and buyers to rapidly adapt and react to fast-changing market conditions.

B2B marketers have been striving to become “modern marketers” for some time. At it’s core, however, modernization is continuously occurring. It doesn’t have an end. It isn’t a checkbox. Today’s marketing mindset embraces continual change as the new normal.

We are at an important inflection point in B2B marketing. The new playbook is predominately digital, customer centric, and data science driven. But, there are technical challenges posed by disconnected data and lack of marketing’s technical expertise in everything from sophisticated marketing automation to emerging technologies, such as artificial intelligence (AI). To create the ultimate marketing machine, a paradigm shift needs to occur. 

Download: How the Shift in Buyer Behavior will Impact B2B Marketing

Marketing’s role is changing. Historically, marketing supported business strategy handed down from the C-suite, most commonly pursuing brand goals. Moving forward, high-performing marketing leaders will align their organizations’ activities to overall business strategy, and they will have a seat at the table to create it. Out of the marketing leaders surveyed, 88% stated the primary future responsibility of marketing is driving business growth. While marketing will still have accountability for generating demand, brand value, and pipeline health, the strategic focus on business growth is the most critical role that marketing will hold moving forward. How does marketing step up to the task?

A New Mindset

When the global credit crisis hit in 2008, the chaos spurred innovation in digital consumer experiences (see Figure 3). Since then, marketing’s digital program investment has gradually been increasing. The global pandemic spurred an even greater acceleration of digital transformation, and as of 2020, digital program investment has surpassed non-digital program spend. Buying behavior has also changed. Today, leading marketers are rethinking traditional digital marketing teams, instead choosing to form teams focused on audience-based experiences, of which digital is a part of.

Download: Pitfalls to Avoid in Your Next Digital Marketing Campaign

When the experience economy started to take off in 2008, marketers used a “digital first” mantra to ensure that digital aspects were considered in the marketing mix. Today, digitalization of engagement and experiences is no longer an option, nor a small percentage of marketing programming. According to IDC’s 2020 Tech Marketing Benchmark Survey, 65% of advertising and 57% of content marketing is digital. Marketing leaders are shifting their organizations’ paradigm into a new mantra for marketers — “digital always, digital everywhere.” Digital marketing is now what marketing just is.

The shift from brand first to customer first requires a cultural shift. To be truly customer centric is to design marketing’s strategy and actions around the customer’s interests and needs. The mindset goes from an internal focus of establishing brand awareness or generating new leads to an external focus of correlating brand value creation with customer value creation.

IDC defines customer experience as a “customer’s perception and emotional response to the sum of the interactions and engagement with an enterprise.” In IDC’s 2020 Tech Buyer Survey, customer experience was the number 1 factor impacting buyers’ future purchasing. This is a glaring disconnect between what buyers expect and marketing’s accountability. A product marketing focus will not achieve marketing’s objectives moving forward. In fact, IDC’s 2020 Tech Buyer Survey found that 90% of tech buyers are willing to switch vendors if they are dissatisfied with marketing and sales.

The Funnel Is a Mirage — New Organizational Approach for Today’s Marketer

Buyers do not go through their buying journey in a linear fashion. In the era of digitalization, the funnel is merely a mirage. B2B marketing recognizes that the number of buyers continues to grow, currently at 14 different people in a buying cohort (source: IDC’s 2020 Tech Buyer Survey). Marketing’s role is extending beyond traditional boundaries, with marketing gradually increasing investment in post-sales programming to 18%. Buyers in IDC’s 2020 Tech Buyer Survey overwhelmingly identified marketing-led information sources as the top information source across the full buying journey.

It is now critical that marketers fully embrace their role as the orchestrator, working across organizational boundaries and supporting the buyers as they bounce around. To facilitate the orchestrator role, organizational silos must come down. Collaborating within the marketing organization has been challenging enough, let alone working outside of marketing teams. New departments created will focus on emerging capabilities such as digital, data, and new marketing technology (e.g., artificial intelligence, machine learning, sophisticated marketing automation).

Future marketing organizations will introduce science to art, with 87.5% of marketing leaders surveyed in IDC’s 2021 Future of Marketing Barometer Survey building at least a quarter of their organization with experts skilled at producing digital engagement and experiences. 72.5% plan to have 25% or more of their organization well versed in how to use data and enable marketing automation. Establishing a data operations team is imperative to properly address closing the looming challenges with disconnected customer data, however, data science skill sets are the most critical gap in marketing organizations today. Marketing leaders are also struggling to find marketing technologists, especially those skilled at sophisticated marketing automation and emerging technologies, along with content, digital, and audience marketing strategy.

Growth Marketing for The Win

For more than a decade, B2B marketing has been managing the funnel with product-led strategies. Marketers are now orchestrating whole journey marketing tactics to digitally serve the buyer, no matter where they are in the journey. As B2B buyers have grown more empowered and their desired experience mirrors consumers, they expect a mentor-marketing approach from brands. Buyers are looking for personalized storytelling about solutions that meet their objectives. Buyers want to easily digest and quickly consume information with less reliance on a human salesperson. Enter the importance of growth marketing, to focus on relationships and building loyalty with buyers. Marketing strategy is shifting toward emotive tactics and content marketing that grabs buyers’ attention in an attention-deficit economy. New digital formats are being tested and embraced to personalize the customer engagement and capture a rich set of customer behavioral and intent analytics.

On The Topic of Growth Marketing and Content Marketing Services

You may also find these links helpful:

B2B Marketing’s Paradigm Shift: A Framework for the Ultimate Marketing Machine:

An in-depth analysis on the evolution of content marketing; where it started, where it’s going and what Marketing’s new role will be.

IDC’s content marketing services:

How we help you create quality, engaging content that is research-driven, personalized and beneficial to your buyers.

Latest B2B Marketing research insights:

Research that focuses on the transforming marketing function and helping companies achieve their business goals through better connection with today’s customer.

Supply chain is undergoing a series of seismic shifts. Post-pandemic (said with optimism rather than certainty) demand is surging, supply is stumbling, logistics is backing up, and prices are climbing. There are shortages everywhere and the root causes are varied. In some cases, it is historical capacity unable to keep up with demand growth; in other cases, it is supply disruptions from a lack of workers or shipping containers. As a consequence of both the scale and frequency of disruptions in the current supply chain/business environment, companies have zeroed in on two things to address risk and become more resilient.

70% of companies are focusing on improving supply chain visibility and 80% are looking for ways to be more agile.

Based on responses from IDC’s 2020 Global Supply Chain Survey.

Indeed, it has long been my view that a resilient supply chain must be able to see what is happening in real time, have the intelligence capabilities to quickly assess what is happening, and then do something about it. If the supply chain lacks agility, no amount of forewarning will help if you are not able to respond to what you see; conversely, agility will be much less useful if you lack the ability to know where and how to react.

Although supply chain resiliency is critical in today’s disruptive environment, companies have often found it difficult to detail the business case fully and justify its return on investment — and to build the necessary internal capabilities. However, as the global pandemic moves into its third year, it has revealed persistent “cracks” in the supply chain and presented organizations with an unique opportunity to transform their supply chain and be truly resilient.

Over the last 18 months, I have had this recurring conversation with manufacturers, to wit ‘we were investing in the right things, the right digital technologies, in our supply chain, we just weren’t doing it fast enough’. There are clear correlations with a business’ digital transformation maturity and market performance. In an ongoing IDC study, we have compared digital maturity with both revenue and profit growth and found that companies we assess to be more mature outperform those that we assess to be less mature, so the comment about not going fast enough appears to be rooted in measurable performance. We use the term ‘correlation’ intentionally and with purpose, as causation is much harder to prove, but the trend is unmistakable. Interestingly, in the aforementioned 2020 survey (to be redone this Spring), when asked about the key gaps in the supply chain, 50% of companies felt that ‘a lack of digital competencies limits the ability to transition their supply chain to new business models‘. I would expect that as disruptions in the supply chain persist, or even grow, the performance disparity between digitally mature and digitally immature companies will grow because they cannot easily adapt.

IDC has historically defined resiliency as the capability of a supply chain to ensure and preserve the continuity and consistency of product suppl,y and meet business obligations for product delivery and service to customers, in the face of a broad range of potential supply chain risks, both short-term operational and longer-term strategic disruptions. But what does this mean for the supply chain specifically? The answer, or at least ‘an’ answer, is that the manifestations of supply chain resiliency, as well as the drivers, will differ for different companies. For some, it may be about improving inventory performance (getting to a more “agile” inventory); for others, it may be about visibility into mixed factory networks; and for still others, it may be about supplier diversification.

In a recently published research report on the stages of resiliency I noted that companies run the range of maturity levels. There are those where the supply chain is focused on functional metrics and historical performance measures and KPIs, without consideration for the digital tools or key processes to identify, anticipate, or effectively respond to disruption. Then there are those that operate their supply chain as a digitally enabled, thinking organization, that can easily and comprehensively identify and anticipate disruptions and mitigate them ahead of time, or be prepared to react quickly when they occur (IDC MaturityScape: Digital Supply Chain Resiliency 1.0). These are the ‘end’ points, of course; most companies sit somewhere in between, but it highlights the variability that exists for supply chains on their resiliency journey.

Supply chain resiliency has emerged as a top, perhaps the top, goal for the supply chain post-pandemic. It is now crucial for executive leadership and IT and supply chain managers to assess their digital supply chain resiliency and define a path for improving business performance in the face of increasingly frequent supply chain disruptions. To learn more about supply chain resiliency, read IDC’s new eBook, “Progressing Supply Chain Resiliency”. Click the button below to download the eBook.

Borrowers can be an impatient bunch when it comes to initiating and waiting on loan applications. Time and user interface are key factors when seeking much-needed funds. Many financial institutions (FIs) have lagged their fintech competitors in the digitization of key banking business lines such as lending. Now FIs have a range of technology solutions as they play catch-up in the lending market to both consumers and businesses alike. Loan origination software is a key enablement for FIs to step up their digitization game not only to improve their lending operations, but also to enhance their customers’ experience.

Loan Origination Software Enhances Banking Modernization

As the pandemic subsides, digital lending modernization will become the new normal for FIs. They must adapt and develop their digital platforms accordingly to respond to customers who increasingly avoid in-person or phone contact and prefer to use mobile and online channels for loan services. Digital lending platforms align extremely well with IDC’s 3^rd Platform model for business strategy and investment. Within this model, core technologies of cloud, big data/analytics, mobility, and social media enable FIs to manage relationships and conduct business transactions more successfully.

For example, cloud computing brings manageable costs, minimal set-up, and scalable growth for lending platforms. Big data and analytics use machine learning algorithms for credit decisioning as well as fraud management measure. Mobile device usage has grown into a ubiquitous way of doing business for both B2C and B2B segments. Finally, social media now serves as platforms for content marketing and digital advertising, which play key roles in attracting and onboarding new customers. In sum, 3^rd platform technologies become table stakes for FIs that wish to compete in the digital lending market across global regions.

According to IDC’s Worldwide Banking IT Spending Guide, tech spending on loan origination was $7.3 billion, or 44%, of overall loan IT spending in 2021, growing to $9.7 billion in 2025. The IDC Industry Spending Guide also found that 3^rd Platform technologies will be the largest area of technology investment by the banking industry in 2022. Cloud and mobility will account for at least 30% of spend intent. FIs will devote significant technology spending around digital lending in areas including credit decisioning, fraud management, process automation, and customer experience. FIs will find more revenue opportunities and expand customer engagement as they invest in technology solutions to modernize their loan origination process.

Consumer and Small Business Borrowers Expect Convenience and Immediacy

The ease of digital transactions for online commerce is now ingrained into the expectations that consumers and small businesses have when interfacing with lenders. While some loans are more complex, others such as personal and auto for consumers, and working capital for small business can be processed with technology solutions. Lenders can enhance the customer experience with a frictionless application process and fast-decision response time for borrowers. Streamlined lending processes drive customer loyalty and long-term relationships between banks and their customers.

Mobile apps are often channels of choice for consumers whose smartphones have become lifestyle commerce. FIs will gain more sustainable customer engagement as they invest in technology that enables borrowers to use their mobile devices for loan applications. Embedded lending within mobile apps is a growth opportunity for both tech developers and their tech buying clients.

The use of big data and analytics in handling loan applications also gives lenders the ability to personalize the borrower experience. Customers enjoy a more individualized experience with their FIs, and in return, will seek future banking services. Using loan application data and customer information, predictive analytics can indicate what services a customer may want or require next. For example, consumers that use BNPL installment lending for home furnishings, may also be interested in a home equity loan.

Financial Institutions Find a Lot to Like with LOS Options

Many steps in the loan origination process are highly labor intensive for financial institutions, as well as time consuming for loan applicants. These include data collection, borrower authentication and verification, credit decisioning, and regulatory compliance. FIs will find many benefits and gain competitive advantages when digitizing their loan origination process as outlined below:

Operational Cost Efficiencies

• Cost savings given that loan processing is labor intensive and contains several manual steps
• Enhanced quality and process improvement with more accurate data collection resulting in less errors that must later be corrected
• More informed credit decisions leading to lower delinquent payments and reduced collections activity
• Improved fraud detection and risk management through machine learning algorithms

Revenue Optimization

• Increased loan throughput as production capacity is increased by digitizing repetitive tasks through robotic process automation
• More concise loan pricing with better data collection on individual borrower profiles
• Cross-selling opportunities for other financial services

Enhanced Customer Experience

• Multi-channel interface so customers can choose online or mobile interface
• Reduced application friction for consumers with less need for phone or email interaction
• Faster loan decisions and funding that increase customer satisfaction and leads to longer-term relationships

Recommended Actions for Tech Buyers of Loan Origination Software

Understand the customer journey and the borrower’s path in seeking and obtaining a loan from beginning to end. Consumers are accustomed to streamlined processes for digital transactions and the user interface for lending applications is usually a differentiating factor.

Prioritize customer experience and sustainable engagement over transaction processing. Lending may be a borrower’s first experience with an FI and can open a range of cross selling opportunities that contribute to lifetime customer value.

Utilize technology applications such as: 1) cloud computing that brings agility, cost effectiveness, scalability, and optimal systems integration to a lender’s infrastructure; 2) big data and analytics that provide speed to decisioning and personalization to the customer; 3) mobility platforms that align well with how consumers prefer to conduct digital commerce.

Assess different technology procurement choices: build, buy, or partner. Size, resources, budget, existing tech systems, and required time-to-market for the lender organization will lead to the appropriate decision.

To learn more about the loan origination journey and the technology needed to modernize this process, Join us for the webinar, “Digitizing The Loan Origination Process With Technology“, live on March 9th at 11 AM/ET.

Does external stress accelerate organizational innovation? Ask three colleagues and you might get five different answers. Ultimately, no matter how strongly held your individual opinions are, you will probably fall back on the conclusion that individual outcomes are situationally dependent; in other words, your mileage will vary.

When seeking to better model complex human outcomes like innovation, many of us have turned to biological analogs; that is, we might compare organizational innovation to biological evolution. As far as organizational innovation goes, the general consensus is that human innovation proceeds at a more or less even pace but that the adoption of innovative solutions has been uneven and driven by a variety of external factors. According to The Nobel Prize in Physiology or Medicine 1969, within the field of biological evolution, the debate has been even more intense with Salvador Luria and Max Delbrück being awarded a Nobel Prize in 1969, for work published in 1943, that found “organisms under stress have a higher mutation rate, even though they are not dividing.”

More recently, as mentioned in Does Stress Speed Up Evolution?, in 2018, after “more than two decades of experiments with the bacteria E. coli and most recently human cancer cells, Susan M. Rosenberg, a molecular biologist at Baylor College of Medicine, is challenging that central tenet of evolutionary theory. According to Rosenberg, and colleagues like Robert H. Austin, a physicist at Princeton University, organisms have evolved mechanisms that enable them to drive their own evolution in times of stress. Environmental pressure can boost mutation rates rapidly, even in cells that are not dividing, enabling them to adapt more quickly to new conditions. “Stop insisting that all mutations are random and evolution is slow is the entire story,” Austin says.’

So, in April 2020, Satya Nadella, the CEO of Microsoft, explains in his article, 2 years of digital transformation in 2 months, “We’ve seen two years’ worth of digital transformation in two months,” was that real or puffery? Well, some two years later, the stark value that digitization of organizational processes has brought is legion. Be it retail, medical, manufacturing, government, supply chain optimization, or customer service, many examples can be cited of how digital transformation has accelerated innovation and enabled organizational continuity in the face of the most significant disruptions witnessed, worldwide, in decades.

Increasingly, the conversation around digital transformation is expanding to embrace the concept of “digital first,” in which businesses assume digitization as the basis for any new opportunity or solution to a problem, and analog counterparts take a back seat, if they even exist at all.   

Against this backdrop, information technology, IT, is no longer a tool we use to “enable” employees; it is how we transact our daily activities with virtually everyone within an organization interacting with suppliers, customers, marketing, operations, etc. At IDC, we describe this phenomenon across a constellation of nine Future Enterprise practices detailing the C-Suite agenda for the major disciplines within an organization, from Operations to Trust to Digital Infrastructure.

And, as organizations worldwide strive to cope with the strains and opportunities our digital-first future presents, it’s evident these Future Enterprises require a digital competent, Future IT, organization.

For CIOs and IT leaders striving to deliver an enterprise-wide technology platform, one of the critical imperatives is to systematically deliver an objective and relevant suite of metrics and KPI performance dashboards, tuned not to operational IT department outcomes but tailored to the diverse constituencies across the organization because information technology is now the channel we use across the enterprise. After all, if we cannot measure what has happened across the enterprise we will struggle to agree on what happened across the enterprise!

Digital performance metrics and KPI dashboards are critical requirements powering our organizations as we are challenged to adapt more quickly to shifting circumstances. They are a necessary feature of our organization’s innovation and evolution – not an afterthought. By 2023, we will look back on those digitally enabled organizations that have thrived, and those Future CIOs heralded as instrumental in that success, and a common denominator will be that they instantiated a suite of metrics and KPI dashboards, tailored to different functions and roles, with the common purpose of providing tailored, practical, outcomes-oriented data to guide the day-to-day decisions that facilitated superior organizational outcomes. We dive deeper into the business-impact KPIs that drive digital transformation in IDC’s new eBook, “Forging Business-Impact KPIs for the Digital-First Enterprise”. Click the button below to download the eBook and discover how to set realistic milestones that are measured and successfully achieved is the foundation to build the next set of capabilities in a digital-first enterprise.

I think The Clash said it best: “Should I stay or should I go?” That was the question heard round the retail world leading up to NRF 2022, as the Omicron variant of Covid-19 spiked in New York City, home to the Javits Center and the NRF Big Show, leaving hospitals overwhelmed and potential attendees and exhibitors fearful of getting sick and stuck in quarantine in a city not their own. In the end, some selected the former and some the latter, which made for lower attendance and some wide-open vistas on the exhibit floor, but also created the opportunity for a less frenetic pace, with longer, more in-depth conversations and a place to sit down to have them. Surprisingly, Omicron did not keep all international visitors away. Many small groups traveled the show speaking Spanish, Portuguese, German, French. 

The show had a unique energy, and it was good. The past two years have been challenging for retailers but have also sharpened their focus, accelerating decision making around strategies and technologies to address specific problems that some might otherwise have let languish. As we saw starting in 2020, the pandemic was the final nail in the coffin for some retailers, but it also likely saved many others from the same fate. Retailers have become more vigilant when it comes to how they run their businesses — and even why ― and this blog will address just few of the most prominent themes and technologies that retailers are focusing on to address those issues, with more NRF takeaways coming soon from me and my IDC Retail Insights colleagues Leslie Hand, Dorothy Creamer, and Margot Juros.

Sustainability/ESG takes center stage. Ralph Lauren CEO Patrice Louvet may have tapped into the essence of sustainability best when he tied it to the Ralph Lauren ethos of timelessness. Just as the company’s garments are designed to be worn not for two years, but for two decades, so should companies take the long view in general, recognizing their responsibility to be good stewards of their organizations and the larger ecosystems in which they operate.

If you feared that rising focus on sustainability/ESG issues might have been a casualty of the pandemic, you thought wrong. The focus on sustainability was perhaps more prevalent than any other at NRF, which says a lot, given the steady drumbeat of conversation around topical concerns such as Covid, inflation, and labor shortages, as well as technology-driven goals including supply chain visibility and automation, customer engagement, digital store operations, omnichannel fulfillment, and data security and privacy. The thread of sustainability wound through each of these topics, and is clearly top of mind from the retail C-suite to all points beyond.

Driven by consumer as well as employee demands, by the investor community, and by clear and pressing need for change, companies want to know, “How do I create a more sustainable organization?” and “How do I ensure that those actions lead to meaningful outcomes?” There are many answers to these questions. Some come through direct efforts to mitigate carbon pollution and water use, to design and create product with the end in mind, to treat workers with respect, and to hire from a wide pool of people with diverse perspectives and backgrounds. Ralph Lauren, for example, recently partnered with Dow to develop a sustainable method of dyeing cotton on demand that dramatically reduces water use and eliminates waste. The company also has invested in sustainable material science startup Natural Fiber Welding, which treats cotton waste in such a way that it can be leveraged as a performance fabric — a feature not offered by cotton in its natural state.

Looking broadly at sustainability, as organizations must do, another solution is found in digital transformation, which, through the connectivity, visibility, agility and optimization it enables, contributes to sustainable operations around entire business ecosystems. This includes product planning and design, development and production, facility and asset management, and the end-to-end retail operations including transportation, cold chain, returns, and reverse logistics.

Digitalization, enabled and enhanced by cloud, AI, computer vision, IoT/RFID, AR/VR, and edge computing, also provides a means to see, measure, record, benchmark, and report environmental and social efforts, setting the stage for companies to understand what they are doing more holistically and improve upon it.

Welcome to the Metaverse. You’re already there. Today, the metaverse is an extension of our lives, enhanced by technology, that currently exists as a series of virtual worlds. Your teenage son buying skins for his avatar in Minecraft? Metaverse. In the future, the metaverse will be an interconnected, endless world where digital and physical lives fully converge. Imagine waiting for an appointment at a real booth on the NRF show floor while your avatar roams a fully fleshed-out digital NRF, meeting other attendees (who may or may not be there in person), stopping for coffee at the digital Starbucks, and paying for a coffee that an in-the-flesh Starbucks employee brings from the mezzanine of the Javits Center. Digital and physical selves merge seamlessly in the metaverse, as the worlds draw closer together.

What does the metaverse mean for retail? In the metaverse, brands have a digital presence, too. There are virtual possessions. And consumers. Nike filed seven trademarks late last year, including those for “Nike,” “Just Do It,” and its swoosh logo, and posted openings for virtual designer roles, indicating its intent to make and sell virtual branded sneakers and apparel. It subsequently purchased RTFKT Studios, a company that already makes and sells NFTS and digital sneakers. (In one collaboration with teenage artist FEWOCiOUS, the company sold 600 pair/NFTs of sneakers in just six minutes to the tune of more than $3.1 million.)

Further, outside of its role as a sales channel, the metaverse opens possibilities for gathering data about consumers and product demand. Imagine a sneaker drop in the virtual world, where certain styles of new kicks sell like gangbusters, giving the brand insight into what might sell IRL, thereby offering intelligence that leads to trend-right production and not a lot of inventory headed for markdown or landfills. In other words, the metaverse can be a vehicle for more sustainable operations.  

Either/Or Is Out. Hybrid Experiences Are In. It’s the era of ‘both/and.’Not only does the metaverse open up a huge world of selling opportunities for retailers, it further bridges the narrowing gap between digital and physical worlds. While most consumers may not be outfitting an avatar in the universe, they are nonetheless moving between online and offline at whim and expect retailers to accommodate those hybrid omnichannel journeys seamlessly. Today, those demands have accelerated around last mile, and include experiences such as shopping online and picking up in-store or curbside, or shopping in-store and returning merchandise online; they include endless journey varieties such as adding items to your BOPIS purchase when you arrive at the store, or communicating with the third-party delivery service that’s picking and delivering your groceries to approve a substitution.

Hybrid experiences open opportunities to please the consumer in new ways, but they also add expense and complexity, including the need for upgraded connectivity to enable secure experiences. The need to meet the demands of hybrid while also enabling profitability was a major theme behind many of the technologies discussed at NRF, including AI for recommending right product, return logistics software for defining and guiding product-specific reverse logistics workflows, order orchestration and fulfillment applications for omnichannel shopping, last-mile delivery visibility for optimizing customer experience and even autonomous, driverless cars for handling those deliveries quickly, efficiently and labor free. Task management applications help to improve and optimize in-store employee engagement, while touch-free applications allow for faster payments and customer self-service checkout. RFID is enabling improved inventory accuracy and inventory locating, on the shelf, throughout the store, and into the supply chain.

Across it all, retailers are seeking unified platforms that interoperate across omnichannel, microservices that enable them to easily swap modules in or out, visibility of data across the enterprise or ecosystem, the ability to integrate systems quickly, with all applications working together well regardless of cloud provider, and security and fraud protection across data and all systems and infrastructure.

It’s a tall order. Retailers and their technology partners are on it. While my IDC’s Retail Insights colleagues, Margot Juros, Dorothy Creamer and I were at NRF, we vlogged our experiences. In these videos we share our personal experiences and feedback in real-time, offer important findings and insights and hold interesting interviews. Click the button below to watch the vlog.

“Digital” is everywhere. Where once there was digital transformation, now there’s the “digital enterprise,” “digital first,” “chief digital officers” and “digital innovation.” It’s even used as a noun, as in “an enterprise’s spend on digital.”

What’s the distinction? I won’t attempt to describe all of the “digital” terms currently relevant to enterprises, but I will, based on my discussions with enterprises and research over the past year or so, touch on topics that have emerged as important factors that define digital innovation.

Digital innovation is a subset of many of the other “digital” topics. An organization may add a new digital channel, like an e-commerce site, or modernize a back-office process, such as through digital document management. While impactful, those examples aren’t necessarily innovative. An innovative digital product or service is disruptive, differentiating, or unique. It’s also difficult to deliver, especially for the many enterprises that have traditionally bought software but have not developed software in any significant fashion.

Disruptive, differentiating, and unique are lofty terms that aren’t defined easily. As we’ve dug deeper into the topic of digital innovation, we’ve teased out some questions that help determine whether a digital deliverable is innovative:

Is it a value engine? One commonality we’ve discovered across many innovative digital products and services is that they often create more value beyond the initial intention. We think of this type of digital product or service as a software value engine.

Here’s an example: Damen, a shipbuilder, offers a service that collects and analyses data about a ship’s operations, providing insight to owners and operators that can improve maintenance and ship performance. Once Damen rolled out its service, it began receiving requests for data analytics from companies in sectors it had never served before, such as financial services and insurance. The original digital offering became a value engine on which Damen can now build new products and services that create new revenue streams.

While it may sound like chance that allowed Damen to spin off additional products, it wasn’t. An innovative digital product or service can be iterated on. And, a company capable of digital innovation is open to feedback from third parties and willing and able to put in motion an effort to deliver an additional product or service.

Does it have a significant impact on profit? A digital product or service that isn’t innovative can, in many cases, generate significant revenue. But if a unique digital product or service doesn’t have a significant positive impact on the bottom line it’s hard to consider it innovative in the context of the enterprise.   

Increasingly, we’re hearing enterprises quantify revenue or expected revenue generated from digital deliverables. For instance, digital sales at Kroger are growing in triple-digit percentages, reaching more than $10 billion in 2020 (the company’s last full year report). GM has set a goal of growing software-enabled services revenue to $20 billion to $25 billion annually by 2030. In its Q3 2021 earnings report, McDonald’s reported that 20% of sales – about $13 billion – came through digital channels. While in some cases these companies are using digital products and services to play catch up to competitors, their abilities to deliver innovation will determine whether they can deliver important business outcomes over the long term.

Does a company’s innovative digital product or service have a notable impact on its sector? For instance, does delivering the digital product or service allow the company to steal customers from the competition? Does it set off a round of M&A activity? Is the sector being redefined? Here, there are many well-known examples: think of Lyft and Uber’s impact on the taxi industry, AirBnB’s effect on hospitality, and Nextflix’s impact on cable television. In each of those examples, a digital product or service sent entrenched players scrambling to follow the lead of the disruptor and redefined the types of companies competing in the sector.

While the above may help describe digital innovation, it doesn’t begin to touch on the topic of how to deliver and drive digital innovation. Herein lies the challenge because there’s no “top 10” practices that will work for every organization. That said, there is one thing that’s certain: doing nothing won’t produce innovation.

Last year, our Future of Digital Innovation survey helped us discover how digital natives approach digital innovation differently from enterprises. We found a dramatic difference in terms of the digital innovation practices employed by enterprises and digital natives. Nearly 41% of enterprises said they hadn’t implemented any of the innovation initiatives or programs, compared to 1% of their digital native counterparts.

The exact set of initiatives that will successfully spur innovation in your organization will be different from those used in other companies. But learning about what some companies are doing should help you think about the types of practices that are likely to be successful for your organization.

My colleague, Phil Carter, recently detailed a number of processes adopted by Toyota Financial Services, an organization that makes an excellent example of thinking of an innovative digital service as a value engine and adopting intentional practices. McDonald’s offers other good examples: its CIO told Villanova University professor Noah Barsky (in his Forbes article) about running hackathons and inviting startups to pitch new ideas.

My recommendation to enterprises that recognize the imperative of delivering innovative digital products and services is to be intentional. Look to leading enterprises for mechanisms that you can put in place that will enable digital innovation. And, recognize that doing nothing won’t pave the way to innovation.

Interested in learning more about driving digital innovation in your organization. Download our guide, Best Enterprise Practices: Developing Digital Offerings.