Entrepreneur

5 Business Trends for 2021, and What They Mean for Your Company

By Justin Biel for Brainyard
January 4, 2020
Business 2021

In short:

  • As 2021 approaches, we summarize predictions from major consulting and analyst firms, then translate them into actionable insights for smaller businesses.
  • Outlooks include a greater reliance on technology across the entire business infrastructure, a continued shift toward permanently hybrid work environments and more.
  • Smaller shops would do well to refine their technology plans and continue fortifying supply chains, among other initiatives.

2020 was full of unforeseen challenges. During this period of change, companies faced a bleak choice: evolve quickly or suffer the consequences. In many cases, the challenge caused business leaders to gain important skills. They learned to be more adaptable and to implement and adopt new strategies in record time. They redeveloped business models and uncovered new ways to operate, cut costs and thrive. Several of these organizational changes reinforced or sped up the adoption of technologies, while others created new consumer sentiments and expectations.

And the changes won’t stop coming. The predictions below outline several transitions to come in 2021, as identified by major consulting and analyst firms. Their outlooks include issues related to technology, the new hybrid workplace and shifting consumer demands. These firms tend to focus on issues for enterprise-scale companies, but in this article, we summarize their views and give our take on how these same issues will impact smaller businesses in the coming year. We’ll use these projections to explore how leaders can plan for new norms as the pandemic comes under control in 2021.

Business Predictions 2021

Remote and hybrid workplaces are here to stay

COVID-19 and social distancing requirements continue to make a case for fully remote or hybrid workplaces. Twenty-one percent of U.S. information workers — or those who use and create information for decision-making vs. physically laboring — will work primarily from home next year, according to 2021 predictions from Forrester, a research firm that provides advice on technologies like software and telecom. And the trend is poised to continue: In Forrester’s survey of information workers, North American managers said they anticipate more employees working fully remotely next year, and more than half of information workers said they want to work from home after the pandemic subsides.

Business leaders will need a whole new set of tools for remote leadership and HR management, Forrester continues. The challenge, they say, will be to rethink team building, internal communications, project management and more in 2021’s hybrid workplace. The shift will also require updates to HR processes like onboarding. From a technical standpoint, it’ll require rolling out new systems to avoid the weaknesses of on-premises solutions, which can be costly to maintain and hinder flexible, work-from-anywhere plans from becoming reality.

On the other hand, the pandemic may continue to present a wider talent-sourcing pool and reduced office-space costs in 2021, which could boost efficiency for organizations that take a proactive approach to adopting new business models and systems.

Finally, the unpredictability of school closures, local infection rates and more remains a reality as we move into 2021. So, leaders are encouraged to develop a holistic strategy that uses new technologies and procedures to support their workforce, as well as project and analyze future events in order to mitigate risk and capitalize on new opportunities. Of course, in doing so, they’ll need to remember that those plans may need to change.

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Technology supports new business realities and shifting consumer demands

Technological advancements are always a driving force of business growth. However, many businesses have recently experienced firsthand the specific benefit of using technology to support entirely new business needs. Gartner — the research firm focused on leadership in IT, among other areas — predicts companies will continue to rely on technology to connect newly distributed workforces and cement their abilities to respond to quick changes, strict constraints and new customer needs in 2021.

This entails more moves toward cloud-based, distributed enterprise solutions, says the firm. Cybersecurity also demands renewed focus as companies work to protect data in this new framework. Gartner also references the need to develop “anywhere operations,” or “an IT operating model designed to support customers everywhere, enable employees everywhere and manage the development of business services across distributed infrastructure.”

Gartner also foresees even more businesses capitalizing on new opportunities via technology in 2021. Its trends roundup references the “total experience,” or linking and improving all the touchpoints of your business. The goal, of course, is a seamless experience across web, mobile and more that addresses customers’ most current needs. For a grocery store, “total experience” could take the form of an app that offers the ability to shop, as well as access customer service and delivery. A clothing brand, meanwhile, might update return policies to reflect the new needs of at-home shoppers. “Total experience” enhancements will look differently at each company, but the overall goal is to differentiate your brand in a new landscape by putting technology to work.

Consumer behavior keeps driving business online

COVID-19 will continue to influence consumer behavior in 2021. Overall, ecommerce continues to build momentum in the face of stay-at-home orders and unpredictable future infection rates. It’s also growing along with a generation that is used to buying everything from groceries to furniture online.

JPMorgan’s research shows just how much the pandemic has transformed consumer spending habits for the benefit of categories including food, household cleaners, soaps and sanitizers, vitamins and supplements and, of course, alcohol. Meanwhile, sectors such as leisure, hospitality and travel will likely continue to take hits in the coming year.

In the B2B space, companies should refine digital sales processes to create even better purchase experiences in line with those that B2C consumers have come to expect in recent years. Strong omnichannel sales strategies and elevated B2B ecommerce, such as improved personalization, better access to sales history, simple re-ordering, custom discounts and order status displays, will be imperative to maintain and grow revenue in 2021.

The SaaS industry, which often relies on resellers and channel partners as a primary revenue source, will need to provide digital tools that support these crucial relationships. Entrepreneur magazine recommends enhancing your channel partner experience by focusing more on digital sales and marketing activities, as well as automating procurement, fulfillment, billing and customer management. Recommendations also include getting channel partners onboard with your revenue goals — and supporting that process with shared ecommerce automation platforms and partner portals.

Cloud-centric operations become the norm

COVID-19 exposed weaknesses in many businesses processes and sharpened the need for scalable, flexible, secure, cloud-based technology, both customer-facing and for back-office use. There was a massive surge in cloud adoption after the outbreak, which has continued through Q3 of 2020. Spending on cloud infrastructure services reached nearly $33 billion in Q3, up 33% from the previous year, reports Synergy Research Group.

For big businesses, Deloitte predicts “a shift in cloud strategies toward cloud migration, security, operations, value planning, and DevSecOps” in the near future.

Per Deloitte’s report, the major issues driving this cloud adoption are: shifting work models, the security risks of distributed workforces and the need to efficiently manage both hybrid and fully-remote teams. The firm, which specializes in management consulting, suggests multicloud and hybrid cloud technologies to handle these shifting needs. The firm also foresees a move toward virtual data centers, artificial intelligence for IT operations, and security models that can monitor a variety of networks and devices, along with a distributed software development team.

Fortunately, most small businesses will never have to worry about whether AIOps is “real,” or for them. Most of the complex systems that Deloitte imagines big business reworking were out-of-reach for smaller businesses in 2020, anyway. Security and operational efficiency are primarily the concern of the cloud-based SaaS providers that small businesses choose.

Smaller businesses can go wrong, however, if they fail to ensure that the cloud-based systems they choose are easily or automatically integrated. Inventory management systems that talk to financial management and sales support systems out-of-the box, for example, are a far more powerful business advantage than these three systems would be if they operated independently.

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Supply chains go high-tech

The pandemic rocked supply chains around the world. In response, the supply chain industry is doubling down on technology investments to create more automated, transparent and interconnected systems that can absorb shocks.

News publisher Supply Chain Brain lists seven supply chain trends to watch in 2021 — though it should be noted that these trends likely won’t materialize into usable products until well into the 2020s. The roundup lists automation in the form of robotics and AI, both of which offer safety and better data analysis while freeing workers to focus on complex tasks. The publication also predicts that future supply chains will integrate blockchain technology, IoT and GPS sensors to provide greater transparency throughout the supply chain cycle and improve inventory management. Other projected changes include smart contracts that will cut down processing time, more flexibility via AI, and machine learning that will help companies predict and prepare for future scenarios. Finally, the list predicts a general layering of technologies across the supply chain ecosystem.

There’s no doubt technology can substantially help supply chains deliver a more reliable flow of materials, but even Supply Chain Brain admits that companies aren’t using AI and machine learning just yet. Nevertheless, it nominates “agility” as a supply chain trend for the year. Our suggestion for achieving said agility as a smaller business: Multisourcing materials. You might also look for suppliers that can use technology now to keep buyers informed of materials availability and the status of orders. During the pandemic, companies took a hit when single-source suppliers couldn’t deliver or when sourcing was left to a third party that couldn’t or wouldn’t provide insight into material pipelines. The remedy combines insight with diversity, so that you can address a loss of suppliers in one region, country or company by engaging other suppliers with whom you already have a relationship.

The Bottom Line

Even if you’re not an enterprise shop, it’s a worthwhile exercise to consider major consulting and analyst firms’ predictions for 2021, then translate them into actionable insights for your own operations. In the wake of 2020’s wave of change, businesses can find power in proactively building a company that aligns with the above trends, many of which will continue developing for years to come.

Mark Bianco

For more helpful information from the Brainyard and our friends at Grow Wire and the NetSuite Blog, visit the Business Now Resource Guide.

  

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