With the new year now upon us, new research from consulting and research firm Everest Group forecasts that uncertainty will rule supreme in 2020, despite current positive market conditions and better-than-expected enterprise performance in 2019. Three trends with comms implications are predicted to gain momentum and shape enterprise investments this year—customer experience (CX), digital & data, and the contingent (or contractual) workforce.
The good news from the study
Senior enterprise stakeholders ended 2019 with a slightly more optimistic sentiment about their 2019 performance as compared to their original expectations for the year. Forty-three percent of respondents indicated they had a slightly better than expected (32 percent) or fantastic (11 percent) year.
The bad news…
Despite positive market conditions that should be creating certainty and high optimism for 2020—such as historically high stock market, low unemployment, and low interest rates―market uncertainty continues to create a drag on industry optimism. In fact, Everest Group reports that organizations are bracing for slower growth in 2020.
Only 45 percent of enterprise execs surveyed this year are optimistic about growth in 2020, as compared to 57 percent who expected growth in 2019. Twenty-eight percent of enterprise executives interviewed this year expect flat performance or even a decline in 2020, an increase from 22 percent who held a negative outlook for 2019.
Based on responses to questions about investment priorities and challenges anticipated for next year, Everest Group predicts that 2020 will be the year when three major trends gain momentum:
1. Customer experience is king
Forty-five percent of respondents selected customer experience as the top investment priority and the most critical change that must be made in their business model. This remains true even in an economic downturn.
When asked to identify top investment priorities for 2020 should the economy strengthen versus if the economy weakened, senior enterprise executives typically had two very different lists, except for their top priority—customer experience—which remained the same for both scenarios.
2. Enterprises do digital and data, or die
Enterprises either learn to do tech or fall too far behind to survive. Rapid technology advances are a key lever to improving customer experiences. To that end, analytics, cloud solutions and automation (RPA) rank highest (in that order) among the capabilities enterprises most seek to develop.
3. The contingent workforce becomes a powerful force for change
A shortage of next-generation skills remains a huge challenge for enterprises. Organizations must treat the contingent workforce not as an inconvenient fringe element in their businesses but as a strategic asset. The contingent workforce is a key part of the labor pool in many organizations, especially for groups like IT. In fact, Everest Group research indicates that 36 percent of enterprises classify more than 16 percent of their workforce as contingent workers, a workforce segment that is increasing in size and scope.
“Despite the uncertainty facing enterprises in 2020, the opportunity to win remains, and the stakes to capitalize on the right investments are higher than ever. For example, we know that digital transformation is a key investment priority, and rightly so,” said Michel Janssen, chief research guru for Everest Group, in a news release.
“However, even the best companies are still unable to take advantage of the dizzying array of new digital technologies—and the gap grows for the rest,” he added. “We’ll see the same dichotomy play out in the areas of customer experience and contingent workforce as well. Those who invest and successfully execute will be few, and the rest will lag behind. Should the uncertainty and slow growth that enterprise executives predict truly bear out in 2020, the gap between leaders and followers will be all the more pronounced.”
Everest Group polled 130 senior enterprise stakeholders from Global 1000 companies in November on their thoughts about growth prospects, investment priorities and challenges they expect for the new year.