Opportunities for tech companies to seize in 2022

(Second of two parts)

AAs the digitalization of the global economy further accelerates, the tech sector will likely continue to grow, especially now that vaccines and proactive health and safety measures are helping to manage the pandemic. With that in mind, EY ranks the top 10 opportunities in its annual report that tech companies should seize to grow while navigating volatility and risk in 2022.

In the first part of this article, we discussed the Iffirst of all Iffive opportunities: attracting and retaining more motivated people in a hybrid work environment, strengtheningIfle with mergers and acquisitions, securing business continuity by reducing supply chain risks, embedding security into new business designs, and leading ESG to strengthen stakeholder relationships.

In the second part of this article, we continue by discussing the other Ifve: transforming the business for consumption-based sales, realigning tax organizations with digital business models, streamlining operations and increasing agility, cultivating customer trust to drive digital engagement and anticipating the transition to digital 5G technology.

TRANSFORM THE BUSINESS FOR CONSUMER SALES
During the pandemic, consumption-based business models have offered higher valuation from investors and better protection against economic volatility compared to traditional one-off payments. With more and more customers preferring the flexibility of cloud-based services and software, subscription payments are expected to quickly replace traditional license payments over the next few years. Iffive years.

In order to enable this change, companies need to change their pricing tools, transform their business organizations, adopt new incentive systems, realign their core business processes and track different performance indicators. While the transition will be difficult, businesses will be rewarded with more time to build customer relationships, recurring revenue, and the ability to generate higher revenue for each user through upselling and cross-selling.

REALIGN TAX AGENCIES WITH DIGITAL BUSINESS MODELS
Changes in taxation and legislation are targeting the technology sector worldwide, with governments seeking to shift the tax base to extract more value from the growing economic contributions made by digital services. Sudden changes are caused by trade disputes and governments seeking to protect or strengthen their key industries, and this often includes technology segments.

Tech companies need a solid approach to global trade and taxation given their large international footprint as well as their large asset base, both tangible and intangible. This approach must be based on early planning, real-time information and an agile operating model.

STREAMLINE OPERATIONS AND INCREASE AGILITY
With the current unprecedented economic uncertainty and volatility, customer preferences are shiftovernight and causing large fluctuations in demand. This is especially true in the technology sector. The risk expertIfSector supply chains have also changed due to strained supply chains and geopolitical factors in the sector.fltrade. This has further increased the need for organizations to transform.

To stay competitive, technology companies need to match operational agility with future levels of volatility in their business. This can be achieved by leveraging data analytics, cloud capabilities, and automation tools, streamlining business processes, and identifying ways to simplify organization.

CULTIVATE CUSTOMER CONFIDENCE TO BOOST DIGITAL ENGAGEMENT
Digital businesses rely on trust to continue to inspire customers to visit, interact, and share the data needed to build a business and drive growth. Because alternatives are a click or two away, a lack of trust can instantly send customers to competitors.

EY research found that the main drivers of trust and mistrust are transparency, ethics, security, regulatory compliance and content. To earn customer trust, companies must prioritize the protection of customer data and maintain clear policies on handling issues such as fake content, discrimination, and online abuse. A digital trust strategy integrating all the elements of trust must be put in place.

PREPARING FOR 5G ADOPTION
The tech industry is gearing up for large-scale implementation with the rollout of 5G driving revenue across the tech stack. According to Reinventing the future of industry, an EY survey of the attitudes of several companies around the world, just over half of companies (52%) are more interested in 5G today than before the pandemic. This shows that 5G is not just a new connectivity standard, it is also set to change the way things and devices interact as well as how machine learning and data analytics can be used to improve the logistics, identify supply chain bottlenecks and reshape customer interaction.

As many as three out of four companies surveyed believe that 5G will be integrated into their business processes over the next few years. Iffive years, but for that to happen, tech companies need to prepare adoption roadmaps and use cases to stay ahead of the game.

SEIZE OPPORTUNITIES VOLATILITY AND RISK
Although the world is still experiencing uncertainties related to geopolitical issues and the pandemic, these risks are reshaping the opportunities that can help technology companies develop new markets and increase their competitiveness. Uniting organizations around security and trust to increase stakeholder engagement as well as organizational transformation and the adoption of new business models can help drive market relevance and agility.

This article is provided for general information only and does not replace professional advice when the facts and circumstances warrant it. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.

Rossana A. Fajardo is the Business Advisory Leader of EY ASEAN and the Advisory Services Line Leader of SGV & Co.

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