As we reach the halfway point in 2023, it is a good opportunity to take another look at over-arching trends, both to update those we have already identified and to add some new ones, such as the unprecedented explosion in generative AI applications.
Below are four important topics to watch as we move into the rest of the year.
According to the Organization for Economic Co-operation and Development (OECD), "Global GDP growth in 2023 is projected to be 2.7%, the lowest annual rate since the global financial crisis, with the exception of the 2020 pandemic period. A modest improvement to 2.9% is foreseen for 2024. Annual OECD GDP growth is projected to be below trend in both 2023 and 2024, although it will gradually pick up through 2024 as inflation moderates and real incomes strengthen."
Even though headline inflation has fallen in most economies in recent months due to the downturn in energy prices, food and services prices have continued to rise rapidly and core inflation remains stubbornly high. OECD projects that global headline inflation will moderate from 6.6% to 4.3% as we move through the rest of 2023 and 2024.
Despite the higher interest rates resulting from the Federal Reserve hikes to combat inflation, the US economy continues to show surprising resilience with GDP in Q1 2023 showing a 2% annual growth rate. This has been largely due to strong consumer spending which fuels about 70% of the US economy and rose at a 4.2% annual rate in Q1 2023.
Although artificial intelligence applications such as machine learning (ML) and robotic process automation (RPA) already have been in wide usage for B2B (business-to-business) markets, the revolution spurred by new generative AI has added fuel to the enterprise adoption of artificial intelligence.
Here are some ways in which AI can transform B2B markets:
These are just a few examples of how new AI capabilities can impact B2B markets. We will keep watching this space as AI continues to open new opportunities for businesses to drive innovation, improve efficiency, and gain a competitive edge in the B2B landscape.
Another key trend that continues to drive waves of change across many industries is the move toward subscription, consumption, and usage based offerings in the Digital Solutions Economy (DSE). As more companies take advantage of the predictable recurring revenues and customer loyalty enhancements provided by DSE business models, it has become clear that a holistic approach is the only way to deliver front-end customer-facing flexibility combined with back-end scalability, profitability and compliance.
B2B offerings in the everything-as-a-service (XaaS) area are gaining speed and breadth across virtually all industry sectors. This insight aligns with what Bramasol has seen regarding impacts of DSE in telecom, media, electronics, software/SaaS, semiconductors, medical devices, transportation, energy, and utilities.
The key to success is to understand how the SAP Quote-to-Cash portfolio of applications (formerly known as BRIM) can be selectively deployed to leverage the best value and business results. In some cases, a full-stack deployment makes sense however in other scenarios, companies may be best served by combining one or more specific applications such as those shown below.
Cloud-based digital transformation has become a significant trend in recent years, and it continues to be the go-to approach that is shaping the business landscape across various industries.
Some of the important advantages for using a cloud-based methodology include:
SAP's commitment to leadership in cloud-based digital transformation was highlighted during the Sapphire keynote by SAP CEO, Christian Klein, in which he discussed the comprehensive SAP cloud portfolio rooted in the Business Technology Platform (SAP BTP).
Leveraging the BTP platform, solutions such as the SAP Business Transformation Center and SAP Cloud Application Lifecycle Management (ALM) give companies comprehensive ways to transform their data and operations with seamless strategic control over every phase of the process.
From an overall perspective, this mid-year update on trends to watch underscores the fact that change is inevitable, relentless, continuous, and can have sweeping impacts for virtually every company across all industry segments.
At Bramasol, we have taken the approach that change is not only unavoidable; it is also full of opportunities to improve business operational efficiency and effectiveness by offering new ways to deepen customer engagement, unify end-to-end processes, expand market reach and enhance profitability.
For more information, check out these resources: