Technology product managers need to get more strategic with their portfolio mix by balancing products and services
Worldwide IT spending is projected to total US$3.79 trillion in 2019, an increase of 1.1% from 2018, according to the latest forecast by Gartner, Inc.
“Currency headwinds fueled by the strengthening US dollar have caused us to revise our 2019 IT spending forecast down from the previous quarter,” said John-David Lovelock, research vice president at Gartner, referring to the 3.2% growth it previously forecast.
“Through the remainder of 2019, the US dollar is expected to trend stronger, while enduring tremendous volatility due to uncertain economic and political environments and trade wars.
“In 2019, technology product managers will have to get more strategic with their portfolio mix by balancing products and services that will post growth in 2019 with those larger markets that will trend flat to down,” said Lovelock. “Successful product managers in 2020 will have had a long-term view to the changes made in 2019.”
The data center systems segment will experience the largest decline in 2019 with a decrease of 2.8 percent (see Table 1). This is mainly due to expected lower average selling prices in the server market driven by adjustments in the pattern of expected component costs.
The shift of enterprise IT spending from traditional (non-cloud) offerings to new, cloud-based alternatives is continuing to drive growth in the enterprise software market. In 2019, the market is forecast to reach US$427 billion, up 7.1% from US$399 billion in 2018. The largest cloud shift has so far occurred in application software. However, Gartner expects increased growth for the infrastructure software segment in the near term, particularly in integration platform as a service (iPaaS) and application platform as a service (aPaaS).
“The choices CIOs make about technology investments are essential to the success of digital business. Disruptive emerging technologies, such as artificial intelligence [AI], will reshape business models as well as the economics of public- and private-sector enterprises. AI is having a major effect on IT spending, although its role is often misunderstood,” said Lovelock. “AI is not a product; it is really a set of techniques or a computer engineering discipline. As such, AI is being embedded in many existing products and services, as well as being central to new development efforts in every industry. Gartner’s AI business value forecast predicts that organizations will receive US$1.9 trillion worth of benefit from the use of AI this year alone.”
Supply chain technology trends in 2019
For large global companies to remain in the top of their businesses, Gartner has identified the top 8 supply chain technology trends in 2019.
“These technologies are those that supply chain leaders simply cannot ignore,” said Christian Titze, research vice president at Gartner. “Within the next five years, if half of large global companies are using some of these technologies in their supply chain operations, it’s safe to say that the technologies will disrupt people, business objectives and IT systems.”
AI technology in supply chain seeks to augment human performance. Through self-learning and natural language, AI capabilities can help automate various supply chain processes, such as demand forecasting, production planning or predictive maintenance.
“AI supports the shift to broader supply chain automation that many organizations are seeking,” said Titze. “For example, AI can enhance risk mitigation by analyzing large sets of data, continuously identifying evolving patterns, and predicting disruptive events along with potential resolutions.”
Advanced analytics span predictive analytics — those that identify data patterns and anticipate future scenarios — as well as prescriptive analytics — a set of capabilities that finds a course of action to meet a predefined objective. The increased availability of Internet of Things (IoT) data and extended external data sources such as weather or traffic conditions allow organizations to anticipate future scenarios and make better recommendations in areas such as supply chain planning, sourcing and transportation.
“Advanced analytics are not new, but their impact on today’s supply chains are significant,” Titze said. “They will help organizations become more proactive and actionable in managing their supply chains, both in taking advantage of future opportunities and avoiding potential future disruptions.”
Internet of Things
IoT refers to a network of physical objects that contain embedded technology to interact with their internal states or the external environment. “We are seeing more supply chain practitioners exploring the potential of IoT,” he said. “Areas that IoT might have a profound impact on are enhanced logistics management, improved customer service and improved supply availability.”
Robotic process automation (RPA)
RPA tools operate by mapping a process in the tool language for the software “robot” to follow. They cut costs and eliminate keying errors. “We are seeing a significant reduction in process lead times RPA technology is used to automate the creation of purchase and sales orders or shipments, for instance,” Titze noted. “RPA technology reduces human intervention and improves consistency across manual data sources within manufacturing.”
Autonomous things use AI to automate functions previously performed by humans, such as autonomous vehicles and drones. They exploit AI to deliver advanced behaviors that interact more naturally with their surroundings and with people.
“The rapid explosion in the number of connected, intelligent things has given this trend a huge push,” said Titze. “The once distant thought of reducing time for inventory checks by using drones’ cameras to take inventory images, for instance, is here.”
Digital supply chain twin
A digital supply chain twin is a digital representation of the relationships between all physical entities of end-to-end supply chain processes — products, customers, markets, distribution centers/warehouses, plants, finance, attributes and weather. They are linked to their real-world counterparts and are used to understand the state of the thing or system in order to optimize operations and respond efficiently to changes.
“Digital supply chain twins are inevitable as the digital world and physical world continue to merge,” he said.
Immersive experiences such as augmented reality (AR), virtual reality (VR) and conversational systems are changing the way people interact with the digital world. “In supply chain, organizations might use AR along with quick response [QR] codes and mobile technology to speed up equipment changeovers in factories,” he said. “Immersive user experiences will enable digital business opportunities that have not yet been fully realized within global supply chains.”
Blockchain in supply chain
Although supply-chain-related blockchain initiatives are nascent, blockchain has potential to fulfill long-standing challenges presented across complex global supply chains. Current capabilities offered by blockchain solutions for supply chain include traceability, automation and security.
“Organizations might use blockchain to track global shipments with tamper-evident labels, allowing a reduction in the time needed to send paperwork back and forth with port authorities and improved counterfeit identification,” said Titze.