A one page write-up on three upcoming trends in the technology space - IoT, mobile shopping and Predictive Analytics

1. One – Pager on Three Key Trends
1. Internet of Things – A Potential Game Changer
2. Future of Business Decisions – Getting More Predictive
3. Mobile shopping – Influencing consumers buying preference and marketing strategies?
Prepared By
Linson Kolanchery

2. Internet of Things – APotential Game Changer
A new phenomenon has been evolving in the technology world known as ``Internet of Things`` (IoT) and
is expected to be a game changer in the way businesses will run in the future. By Wikipedia definition, it is
the network of physical objects or "things" embedded with electronics, software, sensors and connectivity
to enable it to achieve greater value and service by exchanging data with the manufacturer, operator
and/or other connected devices. Each thing is uniquely identifiable through its embedded computing
system but is able to interoperate within the existing Internet infrastructure. So, does IoT have the
potential to change the way businesses are run?
As per Gartner, approximately 26 million devices will be on IoT by 2020. Governments are exploring the
potential of Internet of things – for instance, the UK Government is investing GBP 40 million for research
into the Internet of Things.1 IBM announced that it will invest USD 3 billion over the next four years in a
new 'Internet of Things' unit, aiming to sell its expertise in gathering and making sense of the surge in
real-time data2. Accenture Strategy study estimates that Industrial IoT could boost the gross domestic
product (GDP) of 20 of the world’s largest economies by an additional USD 14 trillion by 20303 and at the
same time would be a key influencer for creating new jobs. Considering the high potential of IoT,
companies from various sectors are looking to benefit from the new phenomenon. While software
companies look at garnering profits from creating software and apps that capture the IoT space, hardware
companies will be developing actual tangible products and devices that will make use of the technology.
Adoption of IoT has gained significant momentum primarily due to growth in analytics and cloud
computing, increasing interconnectivity of machines and smart devices, and wealth of applications
connecting supply chains, partners and customers. IoT has enabled companies to streamline and
automate processes, improve efficiencies, reduce costs, track products and understand consumer
behaviour across various sectors, thereby enabling employees to focus on providing tailored outcomes to
customers. Some of the examples how IoT has changed business today:
 ThyssenKrupp Elevator uses the concept of IoT and has been able to vastly improve operations
and offers predictive /pre-emptive maintenance.
 SAS is working with a truck maker and is using IoT technologies coupled with predictive analytics
to determine when a part might fail. It now predicts failure 30 days in advance with a 90%
accuracy rate.
However, interestingly though most of the companies and government agree that IoT would be a huge
potential game changer for running businesses, very few of them have a concrete strategy with
investments to match it. The success of IoT will largely depend on significant investments in developing
adhoc skills and new talent. New jobs ranging from healthcare analytics to transport network engineering
and software development will be dependent on the steps taken by governments and businesses to
remodel the education curriculum.
On a cautious note, though IoT paints a rosy picture of how business will change in the coming years,
historically; the flipside to any advancement in the IT has been a negative impact on jobs. The advent of
IoT could face a similar scenario as process become smarter and automated. Such a situation is
expected to put additional pressure on companies and governments to ensure that the impact is reduced
to the extent possible. Therefore, it would become imperative for the entities to ensure that employees
are given proper trainings and their skills are developed to meet the changing demand.
1 U.K. Gov’t Aims Cash At Driverless Cars,Internet Of Things And Digital Currencies –TechCrunch, Mar 2015
2 IBM says to invest $3 billion in 'Internetof Things' unit – Reuters, Mar 2015
3 The Human ImpactOf The Industrial Internet Of Things – TechCrunch, Jan 2015

3. Future of Business Decisions – Getting More Predictive
With the development of technologies, availability of abundant data, cost reduction in data storage, and
emergence of social media as a vital tool to understand customer sentiments, analytics has successfully
changed the manner in which businesses take decisions. Increase in huge amount of structured as well
as unstructured data has fuelled the growth story for predictive analytics. Growth in the Big Data space
would be key driving factors for investments in IT. Various technologies have emerged for big data
management; however predictive analytics is one of most influential among them. Will predictive
analytics continue to be a key driver for business decisions?
Predictive analytics tools have been around for decades – with a strong uptake historically in Financial
Services, Retail and Telecommunications sectors. However, it is now expanding to sectors including
Manufacturing, IT, Transportation, Logistics, Healthcare and others. Also, predictive analytics has been
primarily used to focus and understand customer behaviour, however lately various functions within an
organization have also started using predictive analytics for strategic planning. For example, the
opportunities offered by predictive analytics are applicable to all core HR processes such as talent
acquisition, attrition risk management, employee sentiment analysis, and capacity planning. Similarly,
finance teams draw upon predictive modeling and visualization for effective cash analysis, enabling them
to reduce financial risk.
To further emphasise on the growing importance of predictive analytics from a statistics point of view, the
USD 2.2 billion advanced and predictive analytics market is expected to grow at a CAGR of
approximately 10% during the period 2013 – 2018.4 According to Gartner, 70% of high performing
companies will manage their business processes using real-time predictive analytics by 2016.
Organizations realise that future business performance will depend on its ability to synthesise and
analyse the right data; however are overwhelmed by the amount of data that is being generated. At the
same time, they understand the potential of predictive analytics; however are still struggling to exploit the
tool completely. This is primarily due to lack of core competency to understand data and awareness on
how to integrate the abundant data with existing systems and processes. Furthermore, the emergence of
"Internet of Things" as a future potential game changer would further fuel the need for a robust analytical
environment for firms to remain competitive.
Organizations need to look at addressing these issues both from a business and technology aspect:
 On the business front, organizations need to look at leaders with core competencies in
understanding business requirements and how data analytics can be brought into play to solve
very complex business problems.
 Organization should look at implementing a change management process wherein employees
are trained to adapt to the changing analytical environment and is able to effectively synthesize
and /or analyse data
 From technology point of view, IT heads will need to play a crucial role by working closely with
peers across all functions, adopting/investing predictive analytics technologies and building
related capabilities. CIOs can meet the business’s expectations, suggesting innovative new ideas
and boosting organizational effectiveness.
4 Roundup Of Analytics,BigData & Business IntelligenceForecasts And Market Estimates, 2014 – Forbes, June
2014

4. Mobile shopping – Influencing consumers buying preference and marketing strategies?
Myntra, an apparel e-tailer announced that they would be becoming a mobile app based retailer and
would shut down its website effective from May 1, 2015. Flipkart, which acquired Myntra a year ago, may
also follow suit if the experiment goes down well with the fashion e-tailer. The move is primarily driven by
the fact that it pulls in about 80% of its traffic and 60% of sales through its mobile application while
desktops aren’t giving the same return on investments anymore compared to a few years ago. Could the
move from Myntra be just a beginning of another transition period of customers moving from
retail shopping to online shopping and now towards mobile shopping (also known as m-shopping
or m-commerce)?
Traditional mode of shopping continues to sustain the onslaught from online shopping (both desktop and
mobile) primarily due to customer preference to feel and touch the product. However, same is not the
case with the desktop shopping wherein m-shopping provides the same user experience as online
experience. From a technical point of view, availability of cheaper smartphone (especially ones with
bigger screen size) and greater internet penetration has fuelled the growth of online shopping. Specifically
for fashion, the non-availability of the latest brands in Tier-II and Tier-III cities has led to high interest in
online shopping. According to Morgan Stanley, online shopper penetration (as a percentage of internet
users) in India is expected to increase from 9% in 2013 to 36% in 2020, primarily led by mobile users.5
Around 45% of the online users in India access internet only through their mobile phones. As per industry
experts, out of all shopping queries in India, 30% come from mobile phones, however, presently less than
5% of total digital commerce happens through mobile.6
Though the concept of m-shopping is not new globally, the trend is slowly catching up in India. M-
shopping is not restricted to just apparel shopping or bill payments– electronics, home furniture, books,
travel booking, etc are also available on mobile apps. While online grocery shopping is relatively nascent
compared to apparel and electronics shopping, companies like Big Basket, Local Banya and Jiffstore are
seeing traction for orders placed though mobile apps. Other mobile apps which are slowly but steadily
gaining momentum include food ordering (Foodpanda and TinyOwl), cab booking (Uber, Olacabs,
TaxiForSure), and streaming music (Gaana, Hungama, Saavn).
With m-shopping picking up in India, mobile advertisements have also started gaining traction and have
been successful in influencing the buying pattern of consumers. According to a survey report from InMobi,
a leading performance based mobile ad network company, 60% of Indians mentioned that mobile
advertisement was a key influencer in their purchasing decisions (via all three platforms – mobile, desktop
and traditional stores). With advertising costs declining due to less dependency on SEOs, companies are
looking at capitalizing the saving to aggressively market their product based on the demographic profile of
the mobile users. Going forward, with the number of applications and options available for consumers,
app loyalty will be the key growth driver for mobile marketers. Companies would have to consistently keep
tap on the changing consumer buying patterns and/or preferences using various tools like predictive
analytics. Accordingly, they would have to constantly keep customers engaged (e.g. m-coupons, discount
coupons, loyalty points, etc) to ensure that they remain loyal to the app and do not move to alternate
options.
The advent of m-commerce has definitely benefitted the consumers providing them with a wide range of
product selection. However, it would be interesting to see how companies (including retail stores and
brick & mortar stores) innovate to retain and attract customer loyalty.
5 Myntra to shutwebsite from May 1 – Times of India,6 April 2015
6 Mobileshoppingset to drivee-commerce in India - The Hindu,24 Oct 2014