Needs, Wants & Technology

Text of a presentation by Gerard O'Neill to the Virgin Media/Innovate SD-WAN Event March 2019:

 

Good morning and thank you to Virgin Media Business and Innovate for the opportunity to share with you some thoughts on the technology trends we see at Amárach driving the business landscape in Ireland.

Much of our work at Amárach involves sensing, measuring and projecting the shifting zeitgeist for our clients and their customers in turn. We use the standard tools of market research and statistical analysis, adding a dose of experience, imagination and conjecture.  As it happens, this is a perfect combination when it comes to anticipating future technology trends!

 

Needs vs Wants

Let’s jump right into it: though I must start with an important distinction.   We do a lot of work at Amárach researching the demand for new products and services (and even a few old ones), and one rule always applies when forecasting demand:

People will buy what they want, they must be sold what they need.

What do I mean?  I’m sure you’ve all experienced it in sales: you’ve invented the next best thing to the wheel, but nobody will buy it. Why? The answer is simple: it isn’t something that people want, even though it’s perfectly clear that they need it.  You might, say, have a brilliant solution that saves people money, but what they really want is to save time and see more of their children!  Sure, they need to save money, but they want to save time.

So, this morning I want to talk about the ‘wants’ that are driving demand for technology in 2019 and beyond, especially those that will generate demand for the SD-WAN services that will learn about this morning.  The three big ‘wants’ that we see emerging in our research for Virgin Media[1] and others can be summarised as:

  1. Managing Complexity
  2. Managing Security
  3. Managing Flexibility

 

Managing Complexity

Let’s look at the first of these: managing complexity. 

One of the biggest challenges for businesses right now is that they want to scale quickly but without significant capital investments.  We see it in the bank lending statistics: businesses are hyper-cautious about borrowing, but at the same time they have strong ambitions for growth.  How do we/they square that circle?  For many businesses – including my own! – the solution lies in using cloud-based solutions to reduce the ‘marginal cost of growth’ to a level that avoids expensive investments in fixed costs.

This is important because growth is becoming more complex and more volatile.  For example, customers are demanding more choices in terms of the channels they use to transact with businesses. Witness how mobile shopping is fast approaching half of all ecommerce sales in some markets and will soon dominate key sectors like fashion.

Managing complexity requires businesses to have access to real time data and the systems that allow them to respond to the trends their data reveals. But now almost every business is deluged with data: we see it in our work on customer experience measurement – customers have never been asked so often by so many about their opinions! Add to that the volume of information generated by CRM systems and you can see how complexity gets even more ‘complicated’ for firms juggling the demands of existing customers with the need to serve a growing number of new customers.

Perhaps the single biggest source of complexity in our experience is the momentum behind ecommerce[2]. Online spending is now growing at 4-5 times the underlying rate of growth in consumer spending, which tells you that ecommerce is the main source of growth for many businesses nowadays.  We predicted this in reports for Virgin Media going back to 2014, and if anything, we may have been conservative in our forecasts. But that creates its own challenges in terms of complexity, and the demand for robust software and hardware solutions that can cope with rapid growth.

So, what do businesses want when it comes to managing complexity? They want to know that when opportunity knocks they will be ready, willing and able to answer, and that they won’t be left behind by more agile competitors who see the same opportunities.

 

Managing Security

Let’s look at the second of our themes: managing security.   We recently published a report for Microsoft on the topic of ‘Securing the Future’[3]. Some of the findings – based on a survey of employees throughout the island of Ireland – are quite scary:

  • 44% of employees in Ireland have been victims of cyberattacks
  • 28% of employees in Ireland use personal devices to work on sensitive files
  • 24% of those working from home have accidently shared work-related material with friends and family.
  • One third are using personal email for work-related or customer information storage
  • Half of employees in Ireland claim their personal device is better than their work device

Spot the weakest link for those managing security!  But you can see the dilemma: businesses want their employees to be more productive but doing so the wrong way can create enormous business risks. It goes further: many employees are using their workplace devices and internet access for personal use (streaming music, videos etc), which creates its own vulnerabilities but also adds to the demands on broadband speeds etc.

One of the key trends now gathering momentum is the emergence of the ‘virtual workforce’: people working collaboratively in teams from different locations (including their homes), whether located exclusively in Ireland or operating across multiple international markets.  The location of the ‘office’ or the ‘branch’ or even the ‘store’ is increasingly abstract.  Though most of us still go every working day to the same location, a growing share of the workforce doesn’t, and they’re happy about it.

In a way, the technology agenda in businesses is being driven by HR, not by the CIO or CTO.  And maybe that’s a good thing from a business perspective – happy workers are more productive workers – but you can see why it creates a headache for those managing security.

So, what do businesses want when it comes to managing security? They want to grow while navigating avoidable risks, which means using technology to empower employees to secure future growth without risking their employers’ security.

 

Managing Flexibility

Let’s look at our final theme this morning: managing flexibility. 

I have already alluded to the issue of flexibility in the context of virtual teams and working from home.  But the issue is much bigger than that, and managing flexibility is something that the entire c-suite[4] in organisations large and small will have to grapple with in the coming years.

Here again, technology is key.  Using software to enhance or even replace expensive hardware, capital intensive infrastructure and other obstacles to growth can only fully succeed if the users of technology are convinced of the benefits. 

One of the greatest challenges facing businesses nowadays is how to increase productivity when the low hanging fruit from technology adoption is already taken.  They want technology to continue to play a key role in driving growth, but they know they must use it differently if they want to avoid a loss of momentum.

Which is why businesses are so enthusiastic about exploring the potential for the ‘distributed production’ of products, services and growth. Which is exactly what networks have always done and always will, i.e.: integrating distributed activities into one, effective output: and why growth-enhancing services like SD-WAN are so important to what every business wants: future growth.

The emergence of the flexible workforce, the gig economy and all that talks to a set of trends that are partly due to cloud and other distributed technologies, but also – maybe even primarily – due to the demands of employers and employees for more flexible solutions to share problems and common objectives.

So, what do businesses want when it comes to managing flexibility? They want to access and share the tools that will enable their management and staff to squeeze additional productivity from existing resources, and to collaborate profitably for the shared benefit of all the stakeholders in today’s complex and security conscious businesses.

 

 Managing the Future

I hope you have found this brief tour of the key drivers of future demand for technology helpful.  I hope you recognised some of your own ‘wants’ in my description of the challenges facing those who must manage complexity, security and flexibility.

I have no doubt that the types of innovative services we will learn about today will play a critical part in managing the future. 

And I equally have no doubt that we can all succeed if – together with our colleagues – we use the full potential of SD-WAN to deliver future growth.

Enjoy the rest of the event.  Thank you.

 

Tony Hanway, CEO of Virgin Media, Gerard O'Neill, Chairman of Amárach Research, and Jim Hughes, CEO of Innovate

 


[1] https://www.virginmedia.ie/insights/

[2] https://amarach.com/ecommerce.html

[3] https://resources.office.com/en-ie-landing-WE-M365-CNTNT-FY19-02Feb-13-Securing-the-future-MGC0003544.html?wt.mc_id=AID787879_QSG_PR_NWS_321266

[4] http://ie-mktg.vodafone.com/future-of-business

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