Mid-market technology trends: Leveraging disruption to drive value The Dbriefs Private Companies series Anthony Stephan, Principal, Deloitte

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1 Mid-market technology trends: Leveraging disruption to drive value The Dbriefs Private Companies series Anthony Stephan, Principal, Deloitte Consulting LLP Chris Jackson, Senior Manager, Deloitte Consulting LLP September 28, 2017

2 Today s agenda Trending the trends Leveraging technology disruption Digital disruption driving new levels of customer intimacy and engagement Closing the technology gap in the mid-market Understanding and considerations for trending technologies Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 2

3 Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 3

4 Trending mid-market and private company trends Five years of insight Rise of cloud services, mobile, and the changing role and value of technology 2014 Analytics and social/mobile increased as technology s role in the business continued to evolve 2015 Cloud begins to increase productivity while analytics provides a 360 degree view of the business; security role and investments increase 2016 Technology is seen as strategic; cloud brings speed to value and investments reflect productivity and analytics value to the business; IT is now a C-suite priority Cloud adoption continues Technology is seen as a means to rapid growth and global expansion Business and IT collaboration increases IT and cyber investments on the rise Analytics and cognitive increase customer engagement and understanding Notable insights * Digital is driving customer engagement Machine learning augmenting human intelligence AR/VR, mixed reality and robotic process automation are being widely embraced Blockchain is being considered in many areas of internet trust * Notable insights based on new survey questions ask for 2017 Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 4

5 Polling question #1 What digital trend is best positioned to enable your business to innovate? 1. Cloud ERP and infrastructure adoption 2. Analytics (predictive or cognitive) 3. Machine learning 4. Mixed reality (augmented and virtual reality) 5. Blockchain 6. Don t know/not applicable Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 5

6 2017 Technology survey results Technology disruption is driving increased customer engagement and intimacy 42% are actively building technology platforms to better engage with customers Externally hosted cloud solutions at 36% continue to gain traction as the most preferred technology model for growing businesses with on-premises and hybrid at 28% and 27% respectively 36% say they spend more than 5% of revenue on technology 20% report that the most significant impact of digital disruption over the next 12 months will be enabling new ways to interact with customers 24% 53% are deploying or piloting the use of mixed reality to achieve business goals say artificial intelligence has greatest potential to increase productivity Blockchain's most frequently planned use is for storing and securing records Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 6

7 Cloud computing The cloud continues to be a foundational game changer for many One of the most consistent trends is the increasing reliance on externally hosted technology solutions, at 36% However, usage of on-premises systems, hardware, and support staff has generally been trending in the opposite direction (28% versus 37% two years ago) One of the biggest jumps in this year s survey versus a year ago was the percentage of companies selecting cloud-based applications as a means to enable their global expansion Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 7

8 Polling question #2 What do you believe is the greatest IT challenge within your organization today? 1. Organization s ability to digest the pace of change with emerging technologies 2. Need for greater collaboration between IT and the business 3. Legacy system modernization to integrate and leverage new technologies 4. Not having the right talent / skill set 5. Managing internal and external security risk 6. Don t know/not applicable Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 8

9 The evolution of the analytics ecosystem is driving us to machine intelligence and cognitive computing Level of enterprise-wide adoption Internet of Things Data warehousing Business intelligence ERP applications Data modeling Direction of the analytics market Intelligent assistants Natural language processing Cloud Visualizations Data lakes Big data In-memory processing Predictive threat analysis Crowd-sourcing & competitions Machine learning and discovery Advanced human computer interfaces Table stakes Modernizers Exponentials Drivers & disruptors Data proliferation New data sources Technology disruption Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 9

10 The three machine intelligence" paradigms Robotics & Cognitive Automation Cognitive Insights Cognitive Engagement Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 10

11 Machine intelligence 43% predict cognitive insights will be the most beneficial application of machine intelligence in the next 24 months 15% say machine intelligence will have a significant impact on their business in the coming year 62% of surveyed firms actively using machine intelligence say it is helping teams analyze business outcomes Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 11

12 Polling question #3 Which type of advanced automation do you think would be most beneficial to your organization? 1. Robotic process automation 2. Cognitive insights 3. Machine learning/intelligence 4. A combination of all the above 5. Don t know/not applicable Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 12

13 Understanding mixed reality Virtual Reality (VR) Augmented Reality (AR) Mixed Reality (MR) Immersive experience is a deeply-engaging, multisensory, digital experience that can be delivered using VR, AR, 360 video, MR and/or other technologies Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 13

14 Mixed reality AR/VR levels of adoption and use 33% 53% 53% report their companies have AR/VR pilot projects in the works or already begun 67% 33% have mixed reality projects in deployment 67% say they are experimenting, building, or have developed mature applications of mixed reality technology Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 14

15 Social business and social media Where digital is up close and personal 34% say the most important objective of our social platforms is greater customer intimacy 25% are monitoring and addressing consumer feedback about product 22% are monitoring and addressing consumer feedback around brand 19% see social a means to expand the delivery of the messages 43% report their corporate strategies emphasize customer acquisition and retention. In social platforms, customer intimacy is king. Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 15

16 Social business and social media with machine intelligence and mixed reality 44% surveyed use mixed reality for marketing and customer service support 34% monitor online mentions on a case-by-case basis, but don t have a defined strategy yet 65% use data analytics mainly to increase the accuracy of forecasts and to report business results 56% use data analytics to predict customer behavior 48% of companies surveyed are monitoring online mentions of their brand Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 16

17 Polling question #4 What aspect of social monitoring is most valuable to your organization? 1. On-line brand monitoring 2. Increased customer intimacy 3. Improved customer/product feedback 4. Method to assist in customer acquisition 5. None of the above 6. Don t know/not applicable Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 17

18 Collaborative leadership, governance, and risk An evolving culture of engagement 57% say executives are actively engaged in emerging technology discussions/decisions 27% say executives are leading the charge when it comes to new and emerging technologies 24% say their companies intend to invest in IT governance (up from 10% last year) Employees take center stage in technology strategies and applications and this changes the way we need to think about governance and risk. Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 18

19 The foundation you build matters Poorly designed governance around cognitive processes and algorithms can lead to significant risks Human biases Usage flaws Algorithmic risks Technical flaws Control vulnerabilities Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 19

20 Things to remember when riding the wave of technology disruption Digital is driving new levels of customer engagement and intimacy Machine learning is stretching the boundaries of human potential allowing companies to tap into new insights Reliance on cloud-enabling services appears to be increasing productivity within mid-market and privately held companies Companies that understand technology disruption and how to harness its power for business value are changing the game Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 20

21 Question and answer Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 21

22 Make sure you join us for future Private Companies webcasts Visit Dbriefs on Deloitte.com Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 22

23 Eligible viewers may now download CPE certificates. Click the CPE icon in the dock at the bottom of your screen. CPE Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 23

24 Contact information Anthony Stephan Principal, Technology Strategy & Transformation Deloitte Consulting LLP Chris Jackson Senior Manager, Deloitte Growth Enterprise Services Deloitte Consulting Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 24

25 This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation. Copyright 2017 Deloitte Development LLC. All rights reserved. Mid-market technology trends: Leveraging disruption to drive value 25

26 About the survey From July 14 to July 24, 2017, a Deloitte survey of mid-market companies was conducted by OnResearch, a market research firm. The survey examined technology trends taking place in this market segment to determine the role that technology plays and how it influences business decisions. The 500 survey respondents represented mid-market companies with annual revenues ranging from $100 million to a little over $1 billion. Half of the respondents were C-suite executives, while the remaining executives held other management roles. Seventy-nine percent of the respondents represented companies that are privately held, while the remainder were publicly-traded firms. Thirty-four percent of the respondents were from consumer and industrial products companies; 25 percent represented technology, media and telecommunications companies; the remainder were divided among energy and resources, financial services, life sciences and health care, and other industries. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. Please see for a detailed description of DTTL and its member firms. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright 2017 Deloitte Development LLC. All rights reserved.