As we head towards the end of the first quarter of 2021, we thought it might be a good idea to start to look forward and see what lies ahead for some of our clients and the industries they’re in. In this blog, we’ll take a look at a few major Information Technology trends that have moved to the foreground in 2021 and how these trends are shaping the ways in which those in the IT industry can gain an advantage over their competitors.
For starters, industries across the board continue to find themselves pushing forward with the digital transformation that has shown no signs of slowing down. In fact, you’ve probably been hearing a lot about how the ongoing pandemic has accelerated this transformation and its underlying factors by years. This means it’s going to become much easier moving forward for customers to access and adopt technologies such as machine learning software, no-code data analytics, blockchain logistical systems, and more.
Rather than slowly easing into these new technology trends, many organizations are finding that they’re quickly becoming table stakes and as a result, this past year may have felt a lot like “adapt or die.” But perhaps no industry is more prepared to deal with these coming changes than IT. After all, these are the companies that will be tasked with producing, delivering, managing, and troubleshooting all aspects of the digital transformation.
But how companies take advantage of the opportunities—and overcome the challenges—presented by the changing industry dynamics is not so cut and dry. In fact, what we’re finding is that there’s significant cross-pollination between the trends in our incentive industry and those in IT.
While the vast majority of IT companies continue to implement some form of SPIFF or rebate program, we’ve begun to see a shift towards a more holistic, non-cash reward model that’s goal-oriented rather than purely sales-oriented. In other words, these clients are seeking to ensure that their companies aren’t just selling every day but excelling every day.
With that in mind, here are some of the latest IT trends, as seen through the lens of the incentive industry:
In light of the recent SolarWinds hack last year, cybersecurity is understandably a top priority for many in the IT space. After all, you don’t want to be the company that opens the backdoor into your clients’ networks, allowing hackers to access or steal their data. As if ransomware, phishing attacks, and other forms of data breaches weren’t difficult enough to manage in a centralized office space, now IT firms have to also worry about their employees working remotely, often on their own computers, and having much of their data stored on cloud-based servers. This translates into greater vulnerabilities, requiring increasing levels of vigilance to keep employees’ and customers’ data safe. It’s no wonder, then, that approaches such as those designed with zero-trust architecture are expected to grow by 20% over the next few years.
In other words, organizations need to be proactive in dealing with evolving cybersecurity threats, particularly as their workforce remains remote and often global. For those with global loyalty programs, these concerns need to be addressed in conjunction with steps being taken to prevent loyalty fraud, which itself has been on the rise in past years. This means a broad and more nuanced program security framework is going to need to be included in any global strategy.
Global Semiconductor Shortage
As more and more people are working from home and using technology to stay connected and entertained, one of the key components of many of these electronic devices is rapidly experiencing a supply bottleneck. The surge in demand for semiconductor chips has caused a breakdown in the global supply chain and extended lead times of up to a year. While the obvious casualties of this chip shortage are consumer electronics businesses, the effects of the problem are being felt in a far wider array of industries, including the well-publicized challenges of automakers.
As distributors and manufacturers both work to resolve these issues, it will be more important than ever to maintain strong partnerships within your supply chain—whatever your industry—in order to ensure you can remain at the front of the line.
Work at Home, Home at Work
For most of us, the work-from-home trend that abruptly took hold in 2020 was something of a double-edged sword. There were fewer hours spent commuting, more flexibility in our work schedule, and more time available to spend with the family. On the other hand, there was the challenge of jostling for workspace with a spouse or significant other, dealing with the children constantly invading our “office” on their breaks from remote learning, and the feeling that we’re never quite clocking out from our day job.
But even as the pandemic begins to wind down (fingers crossed), it doesn’t appear that this WFH trend is going to suddenly reverse course. In fact, a recent survey from Enterprise Technology Research found that the percentage of global workers who are permanently going to work from home is expected to double in 2021. As has been well-chronicled, IT and big tech firms have been leading the way on this for some time, even before the pandemic. With this change in where and how we work, it’s going to be incumbent on managers to rethink the evaluation and incentive process, and certain KPIs may need to be updated as we more and more employees find themselves operating out of their home offices.
Recurring Revenue Models
The move to subscription-based services has been a long time coming for those in the SaaS IT channel, and it’s a trend that shows no signs of slowing down, with roughly 24% year-over-year growth forecasted for the next three years. These recurring revenue models can be potentially advantageous for both customers and vendors, but there’s no denying that they also can bring a level of disruption to the sales channel. With subscriptions, relationship management becomes not just a vital component of the sales process, but a necessary one, with a focus geared more toward customer retention.
Because of this new dynamic, incentive structures will likely need to shift as well. The subscription model relies on an ability to continue finding ways to add value to the customer experience. New features and updates can more easily be rolled out, but these may need additional explanation and/or education to keep customers informed. In this way, it wouldn’t be surprising to see an increasing demand for indirect sales incentives and eLearning solutions. On the flip side, recurring revenue models open up the possibility to extract more customer data than ever before, providing opportunities to tailor unique promotions and while improving existing incentive structures based on customer activities.
Other Trends to Keep an Eye on
5G — People have been talking for some time about the looming impact of 5G on everything from autonomous vehicles to streaming services. Is 2021 the year that 5G truly transforms the way we do business?
The Rise of B2B Marketplaces — Uber, AirBnB, and Amazon have all transformed the consumer experience by providing marketplaces for transportation, accommodation, and shopping, respectively. But it appears that this trend of online marketplaces is beginning to transform the B2B space now as well, with a number of potential implications for manufacturers and distributors alike.
Artificial Intelligence and Machine Learning — While we still might be a few years away from Skynet taking over the system, the growth in A.I. and machine learning is influencing all areas of business, including B2B loyalty, where we are just beginning to scratch the surface of ways this technology can enhance our programs.
While we’re by no means pedaling the digital transformation like these IT companies (and maybe you) might be, we do take note of the trends that help shape our clients’ businesses and the ways that these trends can be leveraged for better sales and productivity. The above are just a few of the IT trends we’ve been seeing lately, and they’re offering new and intriguing ways to enhance your sales enablement strategy so that you can get out ahead of your competitors.
If you want to learn more about what makes a channel incentive program successful, download out guide: The Definitive Guide to an Effective Channel Incentive Program.