Brands that were once industry leaders are no longer around today. Why? Because they did not react fast enough when technology trends disrupted their industries. To avoid their fate, organizations and their enterprise architecture (EA) and technology innovation (TI) leaders must master the art of trendspotting.
If you master trendspotting, you can offer your organization a distinct competitive advantage
The purpose of trendspotting is to answer three of the most crucial questions for EA and TI leaders: How can I tell which of today’s technology trends will be disruptive? How do I decide which trend to react to and which to ignore? How do I determine the right moment to respond to a trend for my organization to balance the risk against the potential gain in business value?
“While some might perceive trendspotting as a guessing game, it’s actually a technique that requires gathering and assessing information to track key indicators, which give you clues as to how a particular trend is evolving,” says Samantha Searle, Principal Analyst, Gartner. “If you master trendspotting, you can offer your organization a distinct competitive advantage that helps it reach out to new customers and markets.”
EA and TI leaders need to create a trendspotting initiative to determine which trends will significantly affect their organization. Searle outlines a four-step evaluation method to help identify must-track technology trends.
Step No. 1: Assess the impact of the trend
Consider the potential impact of a trend across industries and geographies as well as in the context of your industry and organization. New technologies always affect humans in their roles as consumers, employees and customers, but they also impact businesses, IT and the technology market.
Consider whether new technology capability offers new business opportunities or negatively impacts existing business models; changes how people work or interact with your organization or its products; or disrupts the vendor market by undermining existing vendors or creating new markets.
Step No. 2: Evaluate trend maturity
Technology trends tend to evolve along a traditional market curve that can be divided into emerging, growth and mainstream phases. EA and TI leaders should track trends in all of these phases that have high potential for impact.
Your task as a trendspotter is to separate hype from reality
The point at which an organization should consider responding to a trend depends on numerous factors that may accelerate or hinder the trend’s growth. These factors include the cost and risk of adoption, the new capabilities the trend offers, and the security and regulation implications of the trend. For example, investing in an emerging trend poses a higher risk of the technology never reaching maturity. However, early adoption could result in a significant competitive advantage.
Step No. 3: Determine market dynamics
Market dynamics describe the level of investment by venture capital firms, established vendors and early adopters. It also considers the level of market interest and hype, as well as the degree to which the trend, its impact and future evolution are understood and factored into the strategic and tactical plans of mainstream organizations.
Organizations with a high-risk approach might want to invest in emerging trends
“A trend does not exist in a vacuum,” Searle says. “People talk about it, have biases and make assumptions. Vendors that have already invested in the trend will try to sell you solutions. Your task as a trendspotter is to separate hype from reality. A situation where the market is full of hype and vendor promotion and has a high volume of startup funding and investment — with little understanding of the trend or its application in business — is a red flag for adoption.”
Step No. 4: Make a choice
Once EA and TI leaders have gone through steps 1-3, they should ask themselves: What do these trends mean for my organization? How should my organization respond to these trends, if at all, and in what time frame?
The answers come down to what your organization is trying to achieve in terms of its business model and strategy. Organizations with a high-risk approach might want to invest in emerging trends, while more conservative enterprises will wait for a trend to mature first. Depending on the organization, EA and TI leaders can choose to either ignore a trend, put it on a list for further monitoring, or continue assessing the capabilities of the trend and react to it.