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The Asia Pacific region does not yet have its version of the European Union’s Corporate Sustainability Reporting Directive (CSRD), but IDC’s research on Trends in Sustainability Regulation in Asia Pacific is seeing an interesting pattern in changes in national policies and regulations, which will have a similar effect as CSRD.  The emerging trend? Stricter regulations and more supportive policies to organizations’ Environmental, Social, Governance (ESG) commitments and progress reporting.

However, true to the regional nature of Asia, the driving pace of policy affecting sustainability is not the same across all countries. This has made some Asian countries, by intent or purpose, to become Pacesetters, Emerging Leaders, or Watchers for sustainability. These three distinct segments can be viewed as a country’s sustainability maturity level based on the driver of rules:

  • Pacesetters are economies that have an enabling regulatory environment for sustainability/ESG adoption
  • Emerging Leaders are economies where regulations relating to sustainability/ESG is getting more stringent in recent years
  • Watchers are economies with more companies still planning their sustainability initiatives and are in their early stages of the sustainability journey

This public sector push creates increased demand for technological interventions to enable compliance, making Pacesetters and Emerging Leaders hotspots for growth opportunities for sustainability-related technology products and services. Meanwhile, Watchers are closely observing sustainability Pacesetters and Emerging leaders for best practices to emulate and follow in the future.

According to the IDC Global Sustainable Strategies and Technologies Buyer Value Survey, 2022, knowledge of the regulatory environment is among the top three important criterion for evaluation of tech providers as it relates to organization’s sustainability initiatives. This means that changes in policies and regulations in sustainability will inevitably impact not just the execution of business strategies but tech buyer’s purchasing decisions.

The top four implications of these shifts in public sector sustainability standards, and the spotlight on sustainability/ESG to the tech industry in Asia Pacific are:

Greater demand for ESG reporting technology solutions and services

Akin to submissions of annual financial reports, sustainability/ESG reports will become a regular and normal part of business operations in Asia Pacific.

The sincerity of ESG efforts by businesses in Asia is measured against the quality of the organization’s publicly available information contained in sustainability/ESG reports. Similar to financial reports where targets are specific and quantifiable, organizations will need to be more specific and set KPIs against their initiatives. New regulations are already moving toward specific disclosure of information, standard metrics, and third-party audits.

Gone are the days where companies could brand themselves as “sustainable” and then forget to support that claim with actual and verifiable proof. Recent shifts in public policies and regulations in Asia mean organizations, regardless of size of headcount or revenue, must establish commitments towards environmental and social development goals, provide baseline versus target metrics alongside public declarations, align with national set standards on emissions goals, set deadlines for ESG initiatives, and report on progress made annually.

Increased sustainability/ESG tech spending

Organizations will need to dedicate resources to ESG-related endeavors. Translating sustainability initiatives into meaningful and impactful action will require time and investment. Sustainability/ESG reports for instance will require proper planning, strategy, and execution like annual reports and financial statements preparations. This means activities such as: sustainability/ESG data sources identification, data collection and validation, information gaps resolution, and analysis and reporting will need to be integrated into business operations. The workflow requirement would also need allocated resources for leadership and personnel training on sustainability, linking plans to respective business units’ strategies and individual KPIs, and investments in ESG-technologies to manage all information requirements and additional workload.  

Sustainability/ESG as an increasingly important decision-factor in procurement and partnerships

Greater incentives to comply with public sector sustainability standards will inevitably lead to the adoption of green procurement and greater demand for green suppliers. Green suppliers are product vendors and service providers that also comply with sustainability and ESG standards. Sustainability goals have supply chain emissions tracking requirements that encourage organizations to shift to more environmentally friendly providers of raw materials and services or suffer the consequence of delayed or missed ESG targets.

Organizations can recognize green suppliers by their characteristics as below:

  • Tracks their own and their supply-chain’s carbon footprint/emissions
  • Sets specific dates for their sustainability initiatives and goals
  • Ties their sustainability/energy transition roadmap goals to KPIs
  • Reports on own sustainability/ESG programs
  • Practices the 3Rs – Reduce, Reuse, Recycle, in their own procurement of sustainable raw materials and packaging
  • Appoints a Chief Sustainability Officer
  • Promotes diversity, equity, and inclusion policies and programs
    • Supports through a governance structure, environmental and social endeavors, as well as data privacy and security
  • Has green certifications, accreditations, awards and recognition

Higher demand for Sustainability Talents/Services

Operational requirements needed to provide regular sustainability/ESG reports include appointing sustainability personnel to handle monitoring and supervision of the performance of ESG initiatives, progress tracking, audit and validation. Centralized decision-making would become a necessity as requirements on ESG increase and sustainability cuts across more business units and aspects of a company’s operations.

With a narrow talent market for leaders and sustainability-savvy personnel, the greater demand ushered by stricter and stringent reporting guidelines means that organizations will have to look for technology interventions and invest in upskilling of existing personnel to take up wider and deeper roles related to sustainability. As an example, accounting officers could be upskilled to know about ESG reporting frameworks, climate finance, carbon credits.

If you have any questions on how solutions providers like yourself can help your customers to adapt and benefit from these regulatory changes, we are here to help. Contact Us today and learn more about IDC research and services on Sustainability and how it can help you.

Melvie Espejo - Research Director - IDC

Analyst Profile
Melvie Espejo is a research director for IDC Sustainable Strategies and Technologies. She leads the sustainability research practice in Asia/Pacific, tackling sustainability/environmental, social, and governance (ESG) strategic research themes with a 360-degree lens. Melvie's across-industry, across-technology research captures topics, such as climate change technologies, ESG adoption and execution, sustainable transformation in organizations, circularity and the circular economy, green procurement, and sustainability/ESG regulations and its impact on technology investments, strategies, and the competitive landscape.

The Future of Work is going through a tumultuous time. In a response to tough market conditions, business leaders across industries, including high profile CEOs, are mandating a return to the office. The reason is no more than a desire among managers to boost employee performance by having tighter control over their reports.

Moreover, recent mass layoffs, which are essentially no more than a sugar rush for shareholders, can also be interpreted as a shift in power from employees back to employers. The latter are now in charge, dictating how work gets done for the sake of financial performance.

Will this last? Can we assume that the past few years of progress in the Future of Work have been erased from history?

Are You Ready for the “Era of Disruption”

Returning to a pre-pandemic workplace is not viable. A company with top-down decision making will find it difficult to adapt to a fast-changing environment.

Employees will not give the best of themselves if their voice is not heard, or if they feel disrespected or undervalued. Many will retire early, quiet quitting or even joining the large contingent of gig workers, simply because they feel “they don’t belong”.

The pandemic taught us something profound that goes beyond “where” work happens. It is the realisation that work is a projection of ourselves, our life goals and aspirations, and a means of fulfilment.

Meaningful Work

Brad Bird, the movie director, once said, “Money is just fuel for the rocket. What I really want to do is go somewhere.” This sentence, which reflects the mindset of many people at work today, can be summarised in one single word: Purpose.

With Millennials and Gen Z making up roughly half of the current workforce, and soon becoming our future leaders and CEOs, it is reasonable to expect “corporate purpose” to change business as we know it today. Younger generations want to work for companies with impact, beyond shareholder value.

Purpose is the secret sauce for high performance

Therefore, it’s not “where” work happens but “why” work happens — i.e., the purpose of work that unlocks employee energy. In an era of disruption, when work has direction and is transformed into purpose it is powerful and energising.

Let’s think about a sailing racing yacht, and the teamwork involved to pursue a common goal, a North Star. In a racing yacht, the following applies:

  • The interest of the team is always above individual interest
  • There is just “one collective head” — they must think and act together
  • Every crew member has a critical role to play for the victory, from the leading role of a helmsman to the agile role of trimmers, tuning the sails to ensure maximum thrust.

 

How does the above apply to your firm? Are your people “energised” to collectively pursue your North Star? Do they feel their roles and responsibilities make an impact?

This is the secret sauce of high-performance organisations: by nurturing their core, business leaders can drive employee performance and team cohesion.

Sustainable companies do business and make profit by placing the welfare of their people, society and the environment as their core purpose. As such, unfair pay, work inequalities, “command and control” management styles and the social disconnect affecting many organisations today is foreign to them.

Companies with a sustainable purpose enjoy a more mature social contract between employer and employees. Thus, the choice of hybrid or full time in the office is actually irrelevant. What matters is that decisions are not top down but in partnership with employees.

Technology Is the Enabler

In a digital world, pursuing the North Star is far more effective (and enjoyable) when employees are given the right technology. Here are some suggestions:

  • Devices that are sustainable by design and appropriate for different workstyles
  • Digital Workspace solutions for productivity, inclusive collaboration and connection to purpose.
  • Workflow automation to free up employee time for more human work
  • Online training platforms to continuously elevate employee skills throughout their careers
  • Intelligent IT support for employee experience and productivity
  • Identity management for digital trust
  • Zero Trust security solutions for a perimeter-less workplace

In summary, placing purpose at the core of your business is most effective for employee performance and social cohesion. Numerous third-party studies show that purpose-led organisations outperform their peers.

If you would like to learn more about this and how technology enables a purpose-led organisation, join us at our IDC Future of Work Conference.

Customer listening. Customer engagement. Both well-established and understood aspects of the customer experience arsenal that many would argue they have already covered within their CX strategies. But have they?

The challenge for many organisations is that they believe they have ticked all the boxes on customer listening and engagement, when in fact all they have done is put in place a few CX tools that are each doing a good job in one part of the CX value chain or another but are operating in isolation of each other.

These organisations fail to realise the business value that is unlocked when these components work together in a single interconnected system. Once understood and implemented as a system of interconnected technologies, a fully functional customer listening and engagement system lets organisations make full use of customer signals to actively drive contextualised customer experiences.

So, what are the moving parts of a fully connected and functioning customer listening and engagement system?

  • Signal gathering: the exhaustive capturing of customer signals across all channels
  • Data consolidation: once signal gathering is in place, consolidate all customer data into a customer data platform
  • Real-time analysis: deploy analysis on your consolidated data in real time to unlock behavioural and intent insights
  • Decisioning and engagement: once gathered, consolidated and analysed, a decisioning system is needed to identify next best actions and drive contextualised and orchestrated experiences

These components will no doubt sound familiar, because many enterprises have already installed one or more of them, or plan to. In a recent IDC survey of European enterprise CX technology decision makers, we found that for each of the four components of customer listening and engagement, 80% of enterprises have already implemented the technology or plan to do so in the next 12 months.

So there is a tremendous amount of buy-in for these individual components. But the challenge is that too many organisations are treating them as individual tools, with each one brought in to address a specific business need at a point in time.

To maximise the benefits of a full customer listening and engagement system, all four components need to be in place and working together. But in our survey, we found that only 8% of enterprises have all four of these critical components installed, meaning most organisations are a long way off systematically leveraging customer signals to create differentiated contextualised experiences.

Customer Signal Gathering

What we mean by customer signals are any indication of what a customer is doing or intends to do with a brand. A fully optimised customer signal gathering system is one that takes in signals from across the whole estate of channels that customers use, truly reflecting the omni-channel customer journey. This includes long-established voice of customer systems that many organisations already have in place, based on survey-powered feedback-gathering mechanisms.

Customer signals also include not just conversations customers have with a brand, but also those conversations they are having about a brand. Many organisations are also deploying social listening and analysis tools to capture this. There are also the insights that can be harnessed from organisations’ customer engagement systems themselves.

All the data generated across the value chain — sales, marketing, onboarding, support and service — can shed light on customer behaviour and intent. All of this represents a myriad of customer signal sources. The question is: are you capturing all of them and are you doing it systematically? An optimised customer signal gathering strategy should ingest signals from all these sources.

Data Consolidation

Having exhaustively captured customer signals from all sources, organisations then need to house all this data in a single destination — a customer data platform (CDP) — to create a single version of customer truth. Data silos are one of the major barriers preventing organisations from getting a unified 360-degree customer view.

For organisations that want to leverage all the customer signals gathered from these sources, the CDP is a critical part of the customer listening and engagement system. More organisations are starting to recognise this. In IDC’s latest Future of CX Predictions, we predict that by 2024, 50% of the G2000 will adopt CDPs such as enterprisewide central nervous systems.

Real-Time Analysis

With all of this customer data now housed in a single destination, the key to maximising the insight extracted from it is to employ an analysis system continuously and in real time. Done right, this lets organisations respond to signals — both positive and negative — at the time they are happening and enable them to respond to customers with highly relevant and contextualised responses.

One of the most powerful examples of this is responding to customers at risk of attrition — a moment of truth identified in our recent survey of CX decision makers as among the top benefits of a customer listening and engagement system. CX leaders want to be able to act on signals of attrition in real time and rescue defecting customers, generating true business value, rather than just reporting on it after the fact.

Decisioning and Engagement

This is the final component of customer listening and engagement and this is where the “rubber hits the road” and where customers really see the difference from organisations that run a fully functional customer listening and engagement system. This is where an organisation translates all those signals, the 360-degree customer view and the real-time analysis into next best actions — the actions the data tells us are the next best steps for a customer, in the context of all their interactions and their journey with the brand up till this point.

The biggest problem with traditional voice of customer systems in the past is that they focused on data gathering and were too disconnected from systems of engagement — so listening did not lead to enhanced customer engagement. In the customer listening and engagement system, these are intrinsically linked and work in concert, enabling brands to create experiences that are contextualised and orchestrated in direct response to the signals gathered.

Take Customer Listening and Engagement to the Next Level

For organisations looking to create differentiated experiences through customer listening and engagement, conduct an audit of your CX stack — understand what moving parts you already have in place and work on filling in the gaps in your customer listening and engagement infrastructure. Critically, focus on creating the linkages between the components and ensure they connect well and work together as a unified system — from signal gathering to data consolidation to real-time analysis to decisioning, orchestration and engagement.

Select the vendors that can provide the necessary connectivity between these layers to create a unified system with the full suite of capabilities, rather than a collection of individual tools completing individual tasks in isolation.

The tech market especially is well-known for change. While sales teams are usually well trained in the features and functions of a new technology, including their horizontal application across industries, they do require, however, more insight to the strategic priorities of business buyers at an industry level.  An effective training program empowers them with a sharp understanding of the technologies, the industry and enables them to build strong go-to-market plans and value-selling strategies that deliver lasting business growth.

Before building a training program for your sales and marketing teams, consider outlining your expectations of what you need your sales and marketing teams to do, and this will broaden your tech training session beyond just product features and benefits.

What do you need your sales team to deliver?

  • Increase revenues
  • Closing more business, faster, by linking your value proposition to the target persona’s priorities

What do you need your marketing team to deliver?

  • Improved demand generation
  • Winning go-to-market strategies
  • A better understanding of customers and personas and use of data to gain a competitive edge

That’s a tall order for these teams, made especially challenging when the economy isn’t participating, and some companies are leaner in response.

Build a Sales Enablement Approach That Teaches Your Teams to Fish

Ultimately, your goals are to provide your team with key industry knowledge, specific to country dynamics and covering both customer markets and the IT industry, as well as a consulting-based framework which will enable you to create meaningful value propositions.

When IDC designs our successful sales enablement programs for our clients, we work from a robust framework that can also be applied across global markets.

  • Market education for sales – Include a mix that makes the content engaging, like tutorials, case studies, virtual presentations and mastery classes.
  • Technology, persona & industry specific enablement assets – Offer as much information you can about your solution and the market. Include industry tutorials, persona buyer enablement, an industry playbook and industry brief and quick reference guide.
  • Interactive selling tools and ABM support – Offer digital, interactive selling tools that your teams can use to prove the value of your solution. IDC offers tools like a Business Value Assessment and End-use maturity or readiness assessment that leverage our data and create a trusted transaction because they prove the value of your solution to your buyer.
  • Sales Effectiveness – clearly identify competitive positioning and offer key messaging advice.

Download: Recession-proof Sales Enablement Strategy. IDC’s Sales Enablement Solutions and Capabilities

Training Content That Builds Empowered Teams

The most enabled teams have a deep understanding of their product, the industry and equally important, their customers. They know all of the personas they need to create connections with, including their pain points and desired business outcomes. Fully enabled teams also know how to empathize with customers, so they can build a narrative around their strategic priorities and break these down into use cases. Finally, closers are effective because they have the right tools to carry them through ROI conversations and validation. They can confidently map your solution to their customer’s business priorities and KPIs, and they can do this with validated data.

Consider the following content framework to achieve this:

  1. Industry insight and knowledge – specific industry insights aligned to country dynamics, if necessary, as well as case studies, trends and industry drivers of change.
  2. Strategic priorities – allow your teams to research their customers through publicly available information and identify the people and decision making they are required to do, the nature and scale of operations, how they are performing, the risks and threats they are exposed and the transformation they need, the challenges and opportunities and finally, strategy and tactics for success.
  3. Hands-on learning – provide an opportunity for your training participants to put their learning and research to use by way of a sample case study, leveraging their new industry insights and understanding of strategic priorities.
  4. Learning journey – ensure that you set clear and actionable outcomes from each session and set a plan that maps how and when you will continue to engage with your teams by re-communicating the insights and action.

If you have any questions when you’re building, or updating your sales enablement tools and training, we are here to help. Contact us or learn more about IDC’s Sales Enablement practice and how it can help you build an empowered sales team.  

A robust competitive strategy should reveal how your core markets are behaving, how your products need differentiating based on the competitive landscape and finally, what is driving customer demand.

For a well-rounded template, we created this new workbook you can download. It’s designed to be a tool that is a blueprint for exceling in your market: Building a competitive strategy workbook.

The complimentary workbook takes you through the questions you need to answer in three key areas:

  • Market opportunity
  • Competitors and Share
  • Customer Dynamics

How do you answer the key questions to help you build a solid competitive strategy? What research and data can you leverage to give you the deepest insights into your buyers and markets that will enable you to take those next steps (be it either in product differentiation or new adjacencies) with confidence?

The Technology Landscape

Your competitors are equally affected by the elements of change on the technology landscape: the economy, changing social norms changing, government policies, consumer pessimism.  Utilize the research available to gain an understanding of what is occurring. In late 2022, we published this blog post that dove into what we have called “the winds of change”. Read Navigating Through the Storms of Disruption, for guidance on near-term and mid-term planning.

Predictions are a vital resource for technology vendors. Not only should you gauge these predictions for your own business, but use them when mapping out the market opportunity in a competitive strategy exercise. For example, one IDC prediction states that by 2025, with 40% or more of IT spending as a service, use of short duration capex cutting tactics will be constrained, instead requiring lasting operational expenditure resets of 10% to 30% in software and resources. Alongside this prediction and statement on budget implications, IDC also recommended tactical actions for 2023 and permanent actions for 2024 and beyond.

Download: Market Sizing Guide

In another article Macroeconomic Challenges for SMBs and How They Are Responding, you’ll find insight into which elements, from a long list of macroeconomic troubles, SMBs are responding to. If you are an SMB trying to understand your market and the competitive forces, you’ll find the insights from a recent study that looked at how these macroeconomic concerns vary by region, as well as how supply chain disruptions are complicating projects.

The latest research studies are a good temperature check and give you an understanding of what your competitors are dealing with as well. To dig deeper, however, will require customized research. If you lack the analytics then you can leverage the strength of IT research firms who specialize in your market. The breadth and depth of data is there and so is the expertise to be able to interpret it and develop reliable inferences and plans.

Download: IDC’s Custom Analytics Capabilities Book

What is Impacting Customers?

It’s critical to have a deep understanding of what is driving customer demand. IDC uses several tools to understand today’s tech buyer and consumer.

  1. Wallet: details the technology spending of over 60,000 of the world’s largest technology buyers, enabling more targeted sales and marketing campaigns
  • Consumer Pulse: surveys consumers in seven countries about their current and near-term attitudes toward the eight segments, with particular attention paid to the concept of brand trust.
  • Consumer Market Model: leverages the framework to create five-year forecasts of consumer internet penetration, online activities, eCommerce, and other services spending across 51 countries.
  • Future Consumer Agenda: seeks to provide a futurist’s view of significant trends and technology shifts across the consumer spectrum.
  • Customized Analytics: customized research that marries existing research with primary studies. It gives you tailored data to understand what the market trends are driving the purchase decisions for your specific solution, who the buyers are in the organizations you’re targeting and the purchase drivers of those buyers.

The most successful competitive strategies combine existing research frameworks with customized insights to, once again, help you understand what’s happening for your business, specifically.

The right market intelligence mix can help you overcome product and market complexities, more accurately anticipate and outpace competitive forces by providing current market data and intelligence that feeds into your strategic planning. If you have any questions when you’re building, or updating your competitive strategy, we are here to help. Contact us today, or learn more about IDC’s Custom Analytics practice and how it can help you.

Digital technology is reshaping business models, revenue streams and operations management. At the same time, the rising number of start-ups, scale-ups and unicorns in Europe — the digital-native businesses — is helping to boost digital transformation (DX) initiatives in traditional organisations.

What Is a Digital-Native Business?

Digital-native businesses (DNBs) are highly dependent on a digital infrastructure and are built from the start around modern technologies, from cloud-native applications to artificial intelligence, with data across all aspects, from operations to business models and customer engagement. By adopting new and emerging technologies, and using platform services and marketplaces, DNBs can quickly grow and scale up their business, creating new markets and disrupting traditional business models across industries.

DNBs are also defined by their market valuation — start-ups are valued at less than $250 million, scale-ups are valued from $250 million to $999 million and mature digital natives are valued at $1 billion or more. They can also be either technology-orientated companies (e.g., innovative ISVs/SaaS providers, selling technology products, software or IT services to other businesses) or technology-driven B2B or B2C companies (offering tech-enabled products or services respectively to business or consumers).

What Impact do DNBs have on Traditional Enterprises?

DNBs are disrupting some industries more than others. Fintech companies such as Revolut in the UK and digital banks such as N26 in Germany have pushed digital innovation in the past few years into a very traditional sector, whereas Sweden-based Spotify has completely reshaped the music industry at a global level.

DNBs’ influence also extends to the way traditional companies adopt and use technology. DNBs’ tech operations are often cloud native and data driven, with a customer-centric focus, employing tech-savvy developers and data scientist teams in agile environments to grow and scale the business quickly.

Market disruption and the growing interaction with DNBs are driving traditional European organisations to adopt some of the DNBs’ distinguishing digital features, such as shifting towards a digital-first organisational approach across the enterprise. According to IDC’s What Is the Impact of Digital-Native Businesses on Traditional Enterprises? — based on IDC’s 2022 European Industry Acceleration Survey — these impacts include:

  • Increased innovation: 35% of businesses with more than 1,000 employees cited this. Healthcare (37%), government/education (34%) and transport (34%) are the most impacted industries. Healthtech, edtech and the shared economy are the fastest-growing segments in the DNB arena.
  • Adoption of new working models: The implementation of agile, remote and hybrid ways of working pushed by the interaction with DNBs is most common in very large enterprises, government, education, and retail and wholesale industries. These extensively adopted remote working during the pandemic, and are now taking inspiration from DNBs to permanently adopt new and flexible working models.
  • Higher proportion of digital personnel: Finance respondents have increased the share of employees with digital skills (38%), and have a greater focus on customers and CX (31%), a trend influenced by the interrelationship with the fintech ecosystem. On a broader level, medium, large and very large organisations also say DNBs have had a major impact on organisational changes at the C-suite level.

Why Is it Important to Monitor the Relationship Between Digital Natives and Traditional Businesses?

IDC’s European Industry Acceleration Survey highlights growing coopetition between DNBs and traditional organisations. This is leading to a more innovative and digital-first organisational approach for the latter, such as a tighter focus on digital revenues, across all size categories, and greater competitive pressure in their respective markets, which may enable them to enter M&As or investment activities with DNBs.

This last trend is more prominent for utilities and oil/gas respondents, an industry where customer-orientated digital natives have pushed traditional companies towards improving their CX, also by acquiring entirely digital organisations in the process and with new market segments (such as renewables) being led by digital-native businesses.

Tech providers should target European DNBs, as this is a competitive, fast-growing segment populated by lean, agile and tech-enabled organisations. DNBs are built around modern technologies and digital infrastructure, and need to enter strategic partnerships with external stakeholders to meet their need for innovation. Tech providers are the first option for European DNBs, according to preliminary results from IDC’s Global Digital-Native Business Study.

Tech providers should also look to DNBs as precursors of the changes and trends that will affect traditional industries. Changes range from greater adoption of cloud services (cited especially by telecommunications and media, finance, and professional services respondents) to the adoption of a data-driven approach to business outcomes (cited by 19% of very large enterprises and 25% of retail/wholesale respondents). What DNBs need today will be what traditional businesses need tomorrow.

The relationship between DNBs and traditional organisations could span from tech supplier to potential acquisition target. This could change based on their business model, giving birth to interconnected ecosystems. For these reasons, in cultivating a long-term relationship with digital natives, tech vendors can also improve their positioning in traditional enterprises as trusted partners in their DX journeys.

To find out more about digital-native businesses in Europe, please contact Martina Longo.

Martina Longo - Research Manager, Digital Business - IDC

Analyst Profile
Martina Longo is a research manager in the IDC Digital Business Research Group. In her role she advises ICT players on how European organizations create business value using digital technologies. She also leads IDC European Digital Native Business research, focused on those enterprises born in a modern technological world in a mix of start-ups, scaleups, and more mature digital natives. Within the European Digital Business Research, the European Digital Native Business, Start-ups and Scale-ups theme advises technology suppliers on the market dynamics and segmentation, business priorities, tech buying patterns and go to market approaches (sell to/sell with) needed to engage digital native organizations in Europe.

A common challenge for many organizations is to accumulate and maintain valuable knowledge gained by employees as a function of their jobs. The problem is that most organizational knowledge is not effectively captured, shared, and utilized.  This means you are leaving a valuable resource untapped and, more importantly, don’t have the ability to transform knowledge into insights for better decision-making.    

So…a formalized system — to capture, create, share, use, and access knowledge — is important for today’s workplace.  The huge volume of knowledge gained by employees should be converted into something usable for the current and future organization and available on-demand for others to leverage.  This is where knowledge management technology comes into play. 

What is Knowledge Management?

Knowledge management sounds simple enough to have some sense of what it is.  IDC formally defines knowledge management as “technologies and processes designed to enable organizational insights and meet business objectives by capturing, creating, sharing, using, and accessing knowledge.  Additionally, knowledge can be derived from tacit, structured, unstructured, learned, analyzed, or processed information.” 

Knowledge management offers a path for better decision-making, which leads to real, measurable bottom-line benefits like greater efficiency, more innovation, data driven decision-making, and higher customer satisfaction. You can act and react to quickly changing market dynamics by making existing knowledge easy to find and usable in an established data repository.

Why Knowledge Management?

OK…we know what it is – now what?  The good news is that IDC research has uncovered several reasons why organizations implement knowledge management system.  What’s interesting is that the identified motivators come from many unique perspectives – collaboration, protection, training, etc. – to create different types of positive impact.  Most respondents picked between 1-3 key motivators as rationale to deploy or plan to deploy a knowledge management system. The most common responses included:

  • Improving the overall collaborative work experience.  Knowledge management can drive efficient collaboration by improving the employee/customer/partner experience of sharing knowledge.  It also enables more employee self-service processes to quickly find and retrieve knowledge that enhances productivity and helps to reduce support requirements. 
  • Protecting and maintaining knowledge.  A knowledge management system establishes protection and maintenance of legacy knowledge that could be lost due to employee attrition.  
  • Training/onboarding new employees.  A central repository of organizational knowledge allows new team members to quickly come up to speed on company operations and job responsibilities.  The time and effort to train and onboard new employees can be vastly improved by making knowledge easily accessible. 

Knowledge management isn’t new. It’s been around for several years, so why is now the right time to take a closer look at this technology? Frankly, it’s because the technology infrastructure is better now.  The market landscape continues to transition toward a digital-first mentality and knowledge management is part of that evolution. Consider knowledge management as part of your overall IT evolution in how organizations use, access, and manage their business content. 

A recent IDC survey shows that the numerous named benefits from knowledge management systems tie in with the previously mentioned motivators (see Figure 1).  The top four benefits highlight improvements in business execution, customer support, satisfaction, and employee performance that address operational gains in the business overall.  Ultimately, these benefits lead to a positive bottom-line financial impact and plainly make the case for knowledge management as an essential business operations tool. 

Perhaps one of the most compelling points identified in the data is that virtually no respondent (<1%) indicated no benefit from implementing knowledge management.  These benefits drive an awareness that knowledge management offers a solid return on its investment. 

Knowledge Management Use is Expanding, But…

It isn’t fully saturated.  IDC research revealed that only 45% of employees of large-sized companies (500+ employees) that have implemented knowledge management in their organizations are, in fact, using it.  Obviously, this is less than half of the employee base on average.  In two years, this percentage rises to 55%, so the use of knowledge management is expanding at a steady, gradual pace.  While the increase is encouraging, it also indicates that there is considerable room in the longer term to increase employee usage to a level that more aligns with what would be common everyday use across most, if not all, employees.  We’re not close to that today, but certainly there is potential to move in this direction. 

Figure 2 notes that knowledge management systems address a wide range of organizational information.  Given that the top use identified in the survey is in the compliance/records management and IT departments, the highest percentage of data stored in knowledge management is IT or customer service ticketing data at 56%.  This data type corresponds with the compliance/records management and IT departments where knowledge management usage is highest.  However, we also find a large variety of information assets residing in these systems as well, including customer data, business documents, process metadata, rich media, forecasted knowledge, learning modules, social streams/conversations and content blocks/fragments for dynamic document generation and others.  It demonstrates knowledge management’s ability to manage all sorts of content and data types.

Some Challenges to Overcome

Of course, knowledge management systems are still evolving and there are considerable process and technology challenges to address (see Figure 3).  The IDC survey identified the top process challenge as the “external use of knowledge is limited, manual and/or time consuming to update and maintain”.  Other significant process challenges highlight that:

  • Numerous unconnected silos of data make collaboration difficult
  • Employee behavior such as hoarding knowledge, not being incented to use knowledge management or not knowing where to find/look for knowledge isn’t yet where it needs to be to optimize knowledge management

All these process challenges highlight an inadequate level of organizational commitment to managing knowledge.  In such cases, the organization does not take the necessary time and effort to commit to managing knowledge or the organization does not instill an urgency for its employees to use knowledge management. 

The range of technology challenges are clustered closely together and speak to considerable usability issues that remain in play and limit adoption.  Several organizations also complain of the inability to determine any true benefit from its use, even though almost all organizations using knowledge management indicate beneficial gain. 

We anticipate that knowledge management providers will recognize these challenges and work diligently to address them in the near term.  This will foster greater adoption of knowledge management systems as a standard requirement in business operations.

Conclusion

Managing organizational knowledge is no longer a nice-to-have benefit.  It is a critically important tool for efficiently maintaining organizational information and to remain competitive in a rapidly evolving technology ecosystem.  Knowledge management creates a formalized process for the organization to leverage and capitalize on the employee insights gained for current and future use.  The array of benefits identified in the IDC survey clearly notes knowledge management’s positive impact on internal employees as well as external constituents that interact with the firm.  Challenges do exist, but we believe that many of these identified challenges will be addressed with evolving future generations of knowledge management as its presence becomes standard for the enterprise. 

Our advice is to be ahead of the curve.  For those who have already adopted the technology, the opportunity is now to increase usage between your employees and with appropriate parties outside of the organization to fully achieve maximum benefit.  For those thinking about adding knowledge management as part of the organization’s IT infrastructure, it’s not too late, but the time to act is now.  Knowledge management is an avenue to keep pace with the increasingly contested competitive landscape.  In the not-too-distant future, we anticipate a notable competitive advantage available to those firms that adopt knowledge management versus those who continue to hold out.

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Keith Kmetz - Program VP - IDC

Analyst Profile
Keith Kmetz is the Program Vice President of IDC's Imaging, Printing & Document Solutions programs. He is responsible for all written research in these areas, including analysis on the printer, multifunction peripheral (MFP) and 3D printing markets as well as related transformational hardcopy software/services developments. Based on his 20+ year experience at IDC, Keith's research coverage has spanned a wide variety of significant print industry topics with an emphasis on both forecast and survey analysis; vertical market opportunities; and client go-to-market strategies.

It has been said before that “proper planning prevents poor performance” and this is particularly important for IT buyers in these uncertain economic times.

The IMF has warned that “Half of the European Union and one-third of the world face recession in 2023”. Global inflation is forecast to rise from 4.7 percent in 2021 to 8.8 percent in 2022 but to decline to 6.5 percent in 2023 and to 4.1 percent by 2024.

Every business needs to understand the impact of inflation and recession from both a demand and supply perspective. This is a very broad topic, so let’s focus this discussion using the persona of the IT managed service buyer.

The IT managed service buyer has (amongst others) the following pain points:

  1. Understanding current market labor rates – for time & materials projects it’s critical that IT services buyers understand current market labor rates to ensure they are getting value for money from IT service providers.
  2. Validating IT budgets – for longer term multiyear budgets it’s important for IT service buyers to understand market pricing trends for both labor rates and full scope IT services.
  3. Forecasting – arguably the most difficult task and a product of the first two is forecasting IT spending over the typical 3- to 5-year horizon, so this is the area that we’ll explore in this blog.

Forecasting

The one true fact about forecasts is that they are always wrong. The more data you have, however, the better the accuracy and it can be compelling for technology buyers when coupled with deep market insights from IDC’s team of subject matter experts, analysts and researchers.

IDC’s benchmarking and sourcing advisory services has market price data from recently signed IT Outsourcing deals in the last 12 to 18 months, which show that inflation has directly impacted the market price for Outsourced IT Services and labor rates.

Annual price reductions in the region of 5% to 10% were commonplace for outsourced IT infrastructure services such as server, storage and network device management, as end clients benefited from economies of scale and automation that service providers offered from offshore delivery locations.

Over the last couple of years, IDC has observed that traditional year on year price reductions have reduced substantially and even reversed for IT services with high direct labor content, such as service desk and deskside support.

IDC research (IDC# EUR149042322, May 2022) has shown that the underlying digital transformation (DX) trend in Europe continues to be strong. Initiatives within digital service development and back-end application and process modernization have increased in priority and size in 2021. The COVID-19 pandemic has resulted in reprioritizing security, workplace transformation and related skills development.

The research emphasized the need for up-to date, evolving skill sets to ensure the resilience and agility needed in rapidly changing environments. Changes in the workplace, due to the pandemic, further increased the demand for cybersecurity and data analysis and uncovered a need to improve skills development and training.

Source: European IT Employment Forecast, 2020–2025, IDC Doc # EUR149042322

European technology employment grew 2.7% in 2021 with continued demand for DX skills, even though the COVID-19 pandemic put strong constraints on larger implementation projects. 2020 had an essentially flat growth of 0.4%, but growth in employment in 2022 will reach 3.6% as demand continues to grow.

Labor rate inflation

It may be stating the obvious that labor is a key element of any IT managed service deal, however it’s not the only component and other elements like tools and automation are also key as they enable service providers to provide a more cost-efficient solution, using standardized offerings coupled with sheer economies of scale. The benefits of server virtualization and offshoring have plateaued for the majority of existing outsourced infrastructure deals and further cost savings are marginal for many clients.

First-time outsourcing deals can still offer significant savings to clients as offshore labor rates are still significantly lower (up to 30%) than Western Europe rates. This is a relative statement, however, and labor rate inflation is a global reality.

In a related IDC blog Brian Clark explains that the situation has evolved as both buyer and supplier behaviors have adapted to the new reality that inflation is most likely here to stay. The reasons for the price increases may be changing, as well as the areas of IT most impacted, but navigating rising prices for IT supplies, services and talent remains a challenge as we start 2023.

IDC market research has shown that AWS recently raised consulting day rates by 7-8% and Adobe increased pro-serve rates by 20%. Many more examples exist as the cost to deliver professional services continues to rise, due to high demand for this service and a corresponding critical IT skills shortage.

Recent rounds of layoffs within the high-tech community may alleviate labor shortages, but their focus will be on internal operations. The security or Kubernetes expert is expected to remain in high demand.

Inflation in the Euro Area

Data from Eurostat (the statistical office of the European Union) shows that Euro area annual inflation is expected to be 9.2% in December 2022, down from 10.1% in November 2022.

Energy is expected to have the highest annual rate in December (25.7%, compared with 34.9% in November), followed by food, alcohol and tobacco (13.8%, compared with 13.6% in November), non-energy industrial goods (6.4%, compared with 6.1% in November).

Services inflation is estimated to be 4.4% in December, and this aligns with IDC’s experience on IT Services Price Inflation, even though the underlying wage inflation is significantly higher.

Conclusion
Technology buyers should expect the price of professional services to continue to rise in the coming 18 to 24 months, as a direct impact of global inflation. The impact on multi-year IT outsourcing agreements will be less pronounced, however, as service providers leverage the benefits of offshoring, automation and efficiencies from standard offerings. That said, end user clients should expect existing service providers to enact their economic price adjustment clauses; the bottom-line impact, however, can be offset with productivity gains and strategic investment to reduce labor intensive business processes and associated services.

For additional guidance on IT spending, IDC’s Sourcing Advisory Services provides clients with the world’s leading price benchmarking service. IDC’s experts help IT buyers drive new savings across any of their technology purchases, spanning all categories across IT hardware, software, services, and labor rates.

European organizations expressed their concerns and the impact the believe they will face from Regulations in the coming years of 2023 and 2024, when asked about it in the European Enterprise Acceleration Survey (n=1500). The survey was conducted in late 2022 and we found that the top three priorities for European organizations are in the domains of Cybersecurity, Data Governance and Sustainability.

However, the perception or Regulatory impact varies within European regions, as the political and economic differences reflect in organizations’ regulatory focus for the coming years.

For instance, Western Europe and Central Eastern Europe bear significant differences as the organizations from Western Europe are more concerned about Sustainability Regulations and Safety of products (quality). Meanwhile, organizations from Central Eastern Europe see a higher impact coming from Cybersecurity and Privacy regulations.

Central Eastern Europe

Given the geopolitical context with the war on Ukraine, countries like Czech Republic, Poland and Romania have the highest concern about Cybersecurity Regulations. Those countries have already felt the geo-economic impacts of the conflict in Ukraine, and organizations can find themselves in a situation of lack of compliance with both EU and local regulations.

Particularly in the Czech Republic, there has been a push for Cybersecurity regulations by the National Cyber and Information Security Agency (NUBIK) in the last 5 years, as well as a dependency reduction from foreign parties since the war started in Ukraine. Lukáš Kintr, Director of NÚKIB, commented on the progress of the new draft legislation on high-risk suppliers assessment of technology: “The Czech Republic can have a comprehensive system for reducing the state’s dependence on untrustworthy foreign suppliers within two years. In the field of information technology, we hope to avoid the situation we are currently observing, for example, in connection with oil and gas supplies from the Russian Federation.“

Moreover, with the upcoming application of the NIS2 Directive, several industries included in the Critical Infrastructure category will be touched by the new security requirements. As the tighter Cybersecurity Regulations in the EU comes to place in the next 18 months, EU countries will need to transpose it into national laws and organizations will need to understand how to implement those.

Western Europe

Western Europe organizations hold the same pattern without great discrepancies and have a balanced Regulatory impact assessment profile. Some specificities can be found in France, Netherlands and the UK.

France

France has the highest concern with Ethical-AI Regulations in Europe. France has started to roll-out their policies about the topic from 2018 on, following the publication of the National AI strategy, and the creation of the French National Committee for Digital Ethics.

The country has been historically a leader in the Ethics of technology and AI policymaking, not only from a restriction and liability standpoint but also from a talent and skills investment perspective.

Netherlands

Netherlands is the country with the highest perceived impact of Privacy Regulations, given the high degree of awareness of their citizens and therefore the concern of Dutch organizations. Even if Germany is the leading country on the Privacy subject, Netherlands leads the Privacy Impact Assessments (an instrument for determining privacy risks of data processing in advance).

United Kingdom

The UK is the Western European country with the greatest focus on Data ownership and control regulations, hence the Digital Regulatory misalignment caused by Brexit and the harmonization needed for UK organizations to keep operating in European countries.

Nordics

On another sub-European region, the Nordics, we see yet another response to the contextual geopolitical challenges. The highest regulatory impact perceived by Nordics organizations is around Digital Sovereignty Regulations.

This is explained by the perceived risk of the geographic proximity to Russia, and the increase of the state-sponsored attacks to Nordic countries, especially after the beginning of the war on Ukraine. As the region has the highest digital maturity of European, the direct cyber response is in place (updated infrastructure, high cyber skills, security systems in place, etc.) and new concerns about business implications of the geopolitical context arise.

The Nordics has nonetheless the highest perception of impact coming from Sustainability Regulations in Europe. Historically, the sub-region has had the most relevant political push for green and environmental regulations.

Norway has a number of local regulations around the ESG dimension, such as the Transparency Act, which will required amendments to be compliant with the new Corporate Sustainability Reporting Directive from the EU. Organizations in the Nordics, even if very advanced in terms of compliance with ESG-related Regulations, have to juggle with tighter requirements and uncertainty of the compatibility of the national and EU regulations.

Recommendations for Tech Providers

  • Geo-based sales enablement: Base your go-to-market strategy, sales message and product offerings on the regulatory priorities of organizations for the next two years, taking into consideration not only industry but specific geography (sub-region and country).
  • Target the top regulatory concerns across the continent: European organizations will be required to comply with many new or update regulations at the EU and local level. Target the three top areas first: Cybersecurity, Data Governance and Sustainability.
  • Focus on technology to help automate compliance procedures: Technology should be a facilitator of the compliance process. Provide your customers with Digital Regulatory Intelligence Solutions, the technologies for monitoring, data processing and reporting.

 

If you want to know more about this Research, access the report or contact Anielle Guedes.

Pandemic-accelerated change is combining with the unique habits of Gen Z and Millennials to drive massive changes in the consumer technology marketplace.  Those who anticipate and understand these changes will find opportunity and growth; those who fail to do so will be blindsided and left for dead.  There is no middle ground.

Now that the COVID Pandemic is Behind Us, Not All Boats are Rising

With the high level of consumer spending provoked by the pandemic, firms across the board were able to show revenue and profit growth – even those that lost share.  Not anymore.  Now is the time to make sure you understand where the market is headed and how you will drive growth for the future.  If you are in a legacy business with a customer base largely made up of Gen X and Boomers, buckle up!  Even companies who already resonate with Older Millennials must understand the unique attitudes and behaviors of Gen Z and Younger Millennials.  IDC’s Consumer Pulse uses quarterly surveys in seven countries to identify the ways technology intersects with the life of the Future Consumer.

The Home: The Versatile Center for Everything

Forced to stay at home, consumers came to have a new view of their homes and lives.  Their homes became the center where they do everything: work, play, learn, exercise, and more.  6 in 10 said they were ready for the tech demands of working and learning from home, with predictable differences by income.  Connectivity was the area consumers reported the highest degree of readiness. Devices and accessories were areas of felt need.

Consumers had LOTS of time on their hands and were forced to use technology, engaging more deeply.  Time spent on entertainment increased by 30% from pre- to peak pandemic.  With little to do or nowhere to go during their free time, they upped their engagement with social media and online entertainment.  They gamed and posted more frequently, putting out TikTok videos for all the world to see.  Some even found they could make money at these new endeavors – doing what they wanted to do.

Re-thinking Work & Life More Broadly

An increasing percentage of workers found themselves aware of the choices they had.  With newfound control over their time, broader market acceptance of work from home, and alternative income sources at their disposal, a growing share of workers redefined what was best for themselves and their view of success. 

No longer would it be necessary to think of a corporate job in an office and a promotion as the means to success.  In this new world, they reasoned, “I can work as much or as little as I want, when I want, doing what I like.”  Energized by their opportunity to be their own bosses, workers resigned in droves, pursuing their own gigs or gravitating to employers willing to work under a new, different work framework.  Others simply cut back on their work hours.

Content Creation:  The Race to Empower and Enable Creators

Content creation and gaming, once considered niche activities, are now mainstream, fueled by the energy and ambition of Millennials and Gen Z.  More and more, “everyone” is a content creator.  In fact, 78% of consumers create and post content at least monthly, led by videos (62%).  1 in 6 report earning at least some amount of money with their content. 

Those who earn money use 3 to 4 devices including real cameras and have a much more sophisticated content creation process requiring a seamless experience across form factors.  Amateurs use only 1.3 devices on average, with most relying almost exclusively on their smartphones.  The opportunity is ripe for companies across the marketplace to provide devices, software, and platforms which offer a seamless experience and empower content creators to do what they most want to do – build a following and make money.  This means helping them to move along the continuum from amateur, to prosumer, and beyond.   It also means understanding the dynamic, ever-changing environment. What role will generative AI play? Will short-form video continue to be the rage?  What about long-form? Stills?

Tech-enabled Income-generating Activities Drive a Larger Tech-enabled Lifestyle

It’s not just content creation. Tech-enabled side hustles are on the rise. Half of households report engaging in at least one source of tech-enabled income-generation. Besides content creation, peer-to-peer commerce and rideshare driving top the list. Over 60% of households headed by Gen Z or Millennials report such online income. This trend, seen worldwide, was corroborated by a recent U.S. study by Lending Tree. 

Importantly, engagement in online income-generating activities is a powerful catalyst to broader adoption of a tech-enabled lifestyle – a tipping point in individuals’ lives. The opportunity to earn income drives initial openness to the usage of tech-enabled apps and services.  Successfully earning income then produces confidence to adopt tech-enabled approaches in other areas of their lives.  This is true across all demographics.  Online income-earners more intensely use digital payments platforms, spend more on devices, and subscribe to a wider breadth of tech-enabled services.  Consumer-facing companies with tech-driven solutions would do well to target them.

An Online First Mentality is Predominant

When it comes to shopping, consumers have clearly embraced an “online first” mentality, leading online purchases (50%) to overtake in-person purchases (43%) for the first time; phone purchases remain at 7%.  Usage of online grocery shopping has broadened dramatically – 72% now report they buy at least some of their groceries online, even if just occasionally.  Home delivery is driving the biggest part of this growth – expanding its share from 25% of purchases (pre-COVID) to 35% of purchases (now).  Gen Z and Younger Millennials drove this growth – along with Boomers, demonstrating how the habits of these younger cohorts are impacting the broader marketplace. 

Interesting “Crossover” Activities are Emerging

There is an interesting mash-up happening between social media, gaming, and e-commerce.  Enabled by technology, consumers are connecting areas of their lives previously seen as separate.  Gamers are posting videos of their gameplay on Twitch and Instagram.  Shoppers are using TikTok to discover where to eat or which supplements to take.  Business opportunity exists wherever consumers want to connect previously disconnected areas of their lives.  A future Metaverse is a potential place for that. 

Two-thirds of consumers have heard the term Metaverse, but familiarity and knowledge with the concept behind the term is very low.  Roughly 1 in 4 consumers are highly interested in the concept of the Metaverse.  They prefer immersive experiences and are more willing to spend on tech, including smartwatches and AR/VR headsets.

Re-shaping Meals and Dining

When it comes to meals and dining, the attitudes of Gen Z and Millennials increasingly point to a very different lifestyle from previous generations.  They have a much more positive view of the quality of delivered food and a much less negative opinion of its value for money.  Their habits are re-shaping the marketplace, giving rise to a flurry of drive-through only restaurants and ghost kitchens.  As Gen Z and Younger Millennials age and reach the family stage, the implications will be even more dramatic, as their “practical and convenient” orientation gives rise to the opportunity for alternative business models, including combined meals and groceries subscriptions.

Travel Rewards Opportunity with Gen Z and Millennials

Travel suffered significantly during the first year of the pandemic.  Over the past 6 to 9 months, travel exploded!  But travel is the ultimate discretionary expense and inflation pressures are now weighing on consumers’ disposition to travel, particularly among those with lower and middle incomes.  Consumers have already widely adopted the internet for planning and booking travel and these habits have been stable for the past 3 years.  Still there is opportunity for disruption here.  While 29% of Gen Z and Millennials have dining-related rewards programs, only about 15% are active in an airlines or hotel rewards program.  This clearly signals an opportunity to gain a footing early with these consumers, with a long lifetime ahead of them. 

Multi-mode Personal Mobility & Gen Z

71% of consumers use at least two modes of mobility for a significant portion (10% or more) of their monthly mobility time.  With their proclivity for urban living, more than any other generation, Gen Z use public transport, bikes, scooters, rideshare, and mobility services. The Future Consumer will have a broader, multi-mode mobility strategy using multiple modes alongside the continued use of personal cars which remain consumers’ strong preference.  Battery electric vehicles continue to face barriers; but new more affordable entries are coming to market.  This will reduce Tesla’s first mover advantage. 

Lifelong Learning is Nearly Universal in Reach; Opportunity Remains

Online Learning is increasingly ubiquitous, used by 6 in 10 consumers overall, 70%+ of Millennials, and 80% of Gen Z. Online learning is a perfect fit for Gen Z and Millennials who are digitally self-sufficient and motivated to achieve.  Online Learning continues to offer strong growth opportunity; the breadth of possible learning topics is tremendous, with many consumers pursuing topic after topic.  While consumers see paid content as more trustworthy than free content, YouTube remains a dominant, free source and Gen Z has become more skeptical of the value for money of paid online learning offerings.

Wellbeing is Ripe with Opportunity

With COVID, at home’s share of consumer workout time grew from 36% to 56%.  With the end of the pandemic, this has fallen but remains well above the pre-COVID benchmark at 44%.  The pandemic had a big impact on mental health. The younger the consumer the worse the impact.  Due to its perceived mental health benefits, more people are exercising now than before the pandemic.  Millennials have shifted most strongly to working out at home due to their busy lives and their purchase of home workout equipment.  At home, self-developed routines are most prominent as consumers leverage online workouts (free and paid) and companion apps.  A segment of consumers is open to using AR/VR for their workouts.  All these factors make wellbeing ripe for activity and change.

On top of that, consumers are nearly universally dissatisfied with the bureaucratic, manual nature of healthcare systems and providers in their country. Healthcare operations and logistics are ripe for disruption and can be a point of provider differentiation. Consumers are widely receptive to tech-driven change in all aspects from scheduling, to prescriptions, and related price research, medical records, and alternative tech-focused insurers and providers. 

Near-term Consumer Digital Transformation Opportunity Momentum

Consumer-facing Brands that Fail to Prepare for the Future Consumer are Dead

Gen Z and Millennials embrace technology across a wide swath of their lives. Their unique habits offer opportunity, their attitudes signal their future interest.  Firms which truly understand and meet their needs and expectations will cultivate their trust and build increasing relevance.  Those that do not will find themselves increasingly ignored as stagnant or irrelevant.  Business as usual is not an option.