We believe that the technology sector will continue to grow after the pandemic, with the digitization of the economy contributing to its acceleration. In this year’s annual report, EY has classified the top ten opportunities that technology companies should take advantage of in 2022. By seizing one or more of the following possibilities, companies are giving themselves the means to accelerate their growth and manage risks and volatility in 2022.
When we wrote an article on the top ten possibilities for technology companies last year, social distancing was the best way to fight the COVID-19 pandemic worldwide.
Today, by vaccines, we can better control the pandemic, but market volatility has increased. The risk profile of world trade has deteriorated due to geopolitical events. This had an impact on the list and the order of presentation of possibilities for 2022.
Last year, demand quickly shifted from traditional local products to Infonautics products. There has been a sharp increase in demand for equipment needed to provide remote services. This has resulted in supply chain constraints across the sector. Current trade disputes, regulatory changes, and government efforts to protect or encourage high-tech activities also have an impact. Companies should be aware that implementing new regulations can reshape the market overnight.
The Top Ten Opportunities That Technology Companies Should Take In 2022
1.Attract and retain a motivated workforce in a hybrid work environment
Recruiting resources with the desired talent has always been a big problem in the technology sector, but the pandemic has added to the urgency of finding a solution. Companies investing in future growth need engineers in their research centers and business representatives to strengthen their sales teams. A recent survey by EY indicates that nine out of ten employees say they want flexibility in where they work and their schedule and are ready to leave the company if they don’t get it. But although employees have mastered remote work, the hybrid model poses new challenges in terms of experience and culture. Employers need to resolve the puzzle of optimizing rewards, flexibility, and experience to create a program that attracts and retains the most competent people.
2. Leverage mergers and acquisitions to strengthen the growth profile
According to research conducted by EY, just over half of managers in the technology sector recognize that internal growth could prove difficult in the short term. To maintain its growth, they plan to carry out mergers and acquisitions during 2022. Despite increased oversight by regulators and financial uncertainty, the transaction market is expected to remain strong. Acquisitions will revive growth by adding solutions, technologies, end markets, and distribution channels to the company’s portfolio. In the same way, divestments can help companies turn away from slower-growing market segments or solutions that require different capacities than they have. Pursuing the right merger and acquisition strategy will stimulate growth.
3. Reduce supply chain risk to ensure business continuity
Supply chains have come under enormous pressure due to market volatility and geopolitical events. In recent months, the logistics and availability of components have been two major bottlenecks for technology companies. Although it can be argued that these problems are only temporary and that they have affected the entire sector, some companies have fared better than others. Technology companies need to carefully review their supply chain and reduce the risk, from suppliers to suppliers to their customers. The different risk profiles within the supply chain require different policies on stocks and supply contracts. Logistics issues can lead to changes in the fingerprints of preferred manufacturing and distribution. Real-time visibility will help identify bottlenecks from the start, and new technologies. such as digital twins and 3D printing, are likely to reduce the degree of disruption.
4. Integrate security into the design of new activities
During the pandemic, the importance of data security and integrity has increased exponentially. More and more activities are now carried out online, but above all, a significant number of companies have changed their IT structures and processes in response to the pandemic without taking sufficient account of cybersecurity beforehand. As a result, disruptive cyber attacks have increased and concerns about the ability to comply with regulations have increased. To make data integrity a driving force and to avoid major disruptions, technology companies must integrate the security and protection of personal information into the design of new activities.
This includes stowing data security to the company’s objectives, reviewing the talent profiles necessary to get there, and including the cybersecurity team in the start-up phase of new projects.
Digital is a megatrend that is a pervasive dynamic disruptor as well as a springboard to the future. Businesses are transforming all facets of their business to remain viable and competitive in a digital world, which has a permanent impact on the way the world works
5. Set an example in environmental, social, and governance issues to strengthen relationships with stakeholders
Technology companies have always favored environmental sustainability, but stakeholders want more companies. Consumers are increasingly expecting businesses to generate positive social and environmental benefits. Employees want to change things. Investors demand sustainable investment options. And corporate clients are turning to the sector to implement new technologies that will help them achieve sustainable results. Therefore, technology companies must lead by example, interact with their stakeholders and establish a long-term value proposition. This includes environmental and social commitments supported by organizational changes. It can be made using a top-down approach, transparency, and reports on relevant key performance indicators.
6. Transform the business to excel in consumer-oriented sales
During the pandemic, we found that consumer-oriented business models offered better protection against economic volatility and better value for investors than traditional single payment models. With customers increasingly preferring flexibility in services and informatics software, subscriptions should quickly replace traditional licenses over the next five years.
To allow such a change, companies must transform their sales activities, modify their pricing tools, adopt new profit-sharing programs, monitor different performance indicators, and realign their main business processes. It is not an easy transition, but it will reward companies that have recurring income, more time to build relationships with customers, and the opportunity to generate higher revenue per user through cross-selling and incentive sales.
7. Refocus the tax function on digital business models
The technology sector is increasingly subject to legislative and fiscal change around the world. Governments are seeking to change the tax system to gain more value from the growing share of digital services in the economy. Radical and sudden changes are caused by trade disputes and by governments seeking to strengthen or protect their key sectors, which most often encompass technological segments. Given their large international presence and the large number of tangible and intangible fixed assets they own, technology companies must adopt a rigorous approach to taxation and world trade, which must be based on real-time information, upstream planning, and an agile operational model.
8. Streamline activities to increase agility
The pandemic has exposed the world to a new level of volatility and economic concern. Customer preferences are likely to change overnight, resulting in large variations in demand, particularly in the technology sector. With supply chains being tested and trade being influenced by geopolitical factors, the sector’s risk profiles have changed. And that only increased the need to transform the organization. To remain competitive, technology companies must adopt the agility of their activities to future levels of volatility within their organization. To achieve this, they must simplify the organization, streamline business processes. By this they can take advantage of the sub-nugnant capabilities, data analysis, and automation tools.
9. Build trust in customers to stimulate digital interactions
Trust is essential for digital companies, as it motivates customers to visit their site, interact and share the data necessary to create an activity and stimulate growth. And since the alternatives are close to one click away, a lack of confidence could scare customers away in the blink of an eye. EY research has shown that the main drivers of trust or mistrust are security, transparency, ethics, content, and regulatory compliance. To gain confidence, companies must prioritize customer data protection and have clear policies. They clear on how to deal with issues such as questionable information, online abuse, and discrimination. They must establish a confidence-building strategy that integrates all the elements necessary for trust.
10. Prepare for the adoption of 5G
The deployment of 5G generates revenue throughout the technology stack, and the sector is preparing for large-scale implementation. A survey by EY found that 52% of businesses are now more interested in 5G than before the global pandemic. It is not just a new connectivity standard; 5G will change the way of objects and devices interact and how data analysis and automatic learning can improve logistics. Redefine interactions with customers or identify bottlenecks in the supply chain. In addition, three out of four companies believe that 5G will be integrated into their business processes within five years. To do this, technology companies must develop use cases and adoption roadmaps to remain competitive.
- The global recovery has highlighted bottlenecks in supply chains that could seriously jeopardize growth prospects.
- Mobilizing the organization on its raison , security and confidence will increase the commitment of stakeholders.
- Organizational transformation and the adoption of new business models will lead to agility and competitiveness.