2021 predictions: Automation continues to change the world
Learn how smart companies will use automation to adapt to ongoing challenges with COVID-19, digital transformation, and job creation.
Looking ahead to 2021
As we bid farewell to 2020, it’s time to consider the path ahead. We’ve all survived an extraordinarily challenging year marked by a global pandemic and a challenging economy that has changed the way modern companies operate. A reported 42% of the American workforce transitioned to working from home this year, with companies such as Twitter, Square, and Shopify adopting permanent remote work policies.
In 2020, the sudden rise of the distributed workforce reignited the urgency for digital transformation. Companies found themselves required to provide access to essential work applications and data outside of the office. Some estimates suggest companies will increase investments in digital transformation by as much as 21% between now and 2025.
What lies ahead? Here are our predictions for 2021, including the way we see trends such as COVID-19, digital security, and automation affecting the job market and the corporate landscape as a whole:
42% of the American workforce transitioned to remote work in 2020. Image courtesy Stanford Institute for Economic Research Policy
1. Remote work leads the way to SaaS consolidation
While some markets have faced steeper economic uncertainty since the onset of COVID-19, the reliance on SaaS during the work-from-home era has led SaaS stocks to skyrocket. Flush with cash, some of the biggest names in SaaS orchestrated blockbuster acquisitions, such as Salesforce acquiring Slack for $27B.
On the other hand, venture capital funding has begun to trend down in some key areas. In 2020, first-time financings were down 4% year-over-year, and early-stage VC deals were down 33% in valuation.
For 2021, we anticipate further consolidation in the SaaS market. More-successful SaaS companies will look to acquire smaller firms that can build out their feature sets, while scarcer early-stage funding could mean fewer net-new outfits launch. Overall, the SaaS market may look thinner next year.
Early-stage VC deals were down considerably in 2020 and may continue to trend down in 2021. Image courtesy Pitchbook
2. COVID-19 requires digital transformation, which requires integration
The pandemic has sparked a new wave of digital transformation for businesses everywhere. Remote work policies have spurred the adoption of additional software to fill in gaps and, for many companies, these policies seem unlikely to lift anytime soon. Working from home has led to a greater need to integrate across the tech stack than ever before. Without integrations, mission-critical data remains siloed, making remote-work collaboration even more challenging.
Also, companies whose digital transformation initiatives have lagged and continue to rely on costly on-premises workstations and servers at their offices will more acutely feel the pain of those sunk costs as their teams continue to work from home. As a result, it will be more critical than ever for companies to hasten their migration to the cloud to ensure their teams, which are likely to remain distributed throughout the year, can work anywhere. Projections suggest the market for digital transformation will grow 22.7% annually to $3.3B by 2025. Research indicates that companies that invest in automation see “very effective” outcomes in productivity improvements, supporting new products, improving customer experience, and eliminating inefficiencies. For businesses that take the initiative to integrate their cloud stack, we expect productivity to increase by more than 200% by the end of 2021.
3. “Systems manager” roles will shift to “automation manager”
Job descriptions for business roles will begin to change in 2021 and beyond as organizations implement more automation tools and projects. Hiring criteria will shift from being tool- or systems-oriented to whether individuals can solve fundamental business challenges using automation.
Actual systems themselves will become less relevant. Instead, businesses will prioritize finding individuals who can build effective business processes on top of whichever systems are in play to address the needs of the business. As a result, we may see changes in job titles, with “systems manager” being replaced by “automation manager.”
4. New wave of technology migration to the line of business
In 2021, line-of-business (LOB) teams will be looking to accelerate company growth, customer retention, and digital transformation projects as the economy continues to shift due to the pandemic. As a result, LOB users will increasingly take the lead on traditional technology initiatives such as process automation, enterprise application integration, and application development. Shifting tech to LOB relieve stress from heavily impacted IT departments that are already dealing with security, governance, and other digital transformation ambitions.
As a result of technology migrating to line of business, we anticipate a rise in the adoption of LOB-friendly solutions, such as low-code platforms that democratize technology and give such teams the power to build their own customized solutions, with greater flexibility at a lower cost.
5. Automation will emerge as a job-creation category
As early as 2016, Forrester predicted that by 2025, 8.9 million new jobs in the US would emerge related to what the analyst referred to as “the cognitive era.” New roles would include robot monitoring professionals, data scientists, and automation specialists. However, as the pandemic puts pressure on businesses to accelerate digital transformation (and with the rise of the low-code alternatives that empower individuals to participate in the new tech landscape), we will see more business users reskilling to fit the roles of this “cognitive era.”
Low-code automation solutions, specifically, democratize technology and make automation more accessible to the everyday business user. Although many analysts expect that emerging trends such as robotics, AI, and automation may affect millions of jobs, some estimates suggest automation will create as many as 97 million new jobs by 2025. Automation will emerge from the pandemic as a job-creation category, and we can anticipate it will give rise to some 10 million new in the US by 2025.
AI, robotics, and automation may affect up to 85M jobs but create 97M more. Image courtesy World Economic Forum
6. 2021 will be the year of putting automation into practice or falling behind
As we enter the new year, businesses will no longer be able to afford to operate as they did before the pandemic. Smart companies are already automating, and businesses that haven’t yet will find themselves significantly behind their competitors by this time next year.
In 2021, businesses will go beyond thinking about automation projects to putting automation into practice before more-advanced competitors move into the next stage of their automation maturity. Smart companies will profit handsomely from using automation to accelerate strategic initiatives such as digital transformation. 45% of companies that have successfully implemented mature digital transformation initiatives see higher-than-average profits.
7. With constricted budgets, line of business will turn to low-code
Gartner’s 2020 CMO marketing spend survey found that 44% of CMOs had experienced mid-year budget cuts. With the U.S. economy unlikely to recover in 2021, we can expect to see a continued contraction in marketing budgets in 2021. So it’s doubtful that many companies will see a hiring rush for marketers. It’s also unlikely there will be significantly higher MarTech spending. Instead, companies will expect their marketing teams to make the most of the tools and teams they already have with a focus on efficiency and ROI. Of course, it’s quite possible that other line-of-business teams (not just marketing) will also face budget freezes and be expected to deliver more with less in the new year.
It seems worth noting that the knock-on effects of COVID-19 are also being felt by IT teams, which are more occupied with digital transformation than ever, as well as with security and governance needs to keep pace with a workforce that went distributed overnight. Line-of-business teams will likely have even fewer IT resources to support internal process issues and technological gaps, which is why they will turn to low-code solutions to self-service.
8. COVID-19 sparks an explosion of big personal health data
Due to coronavirus testing, quarantine programs, and contact tracing efforts, organizations are actively collecting more personal health data than ever before. What’s more, organizations might not have the appropriate infrastructure and processes to support that data and ensure it remains private and in compliance with regulations such as HIPAA and GDPR.
In 2021, we expect CIOs to emphasize data privacy, with more-significant consideration for the new types of sensitive data they collect. CIOs will feel growing pressure to adopt technology that lets organizations take full control of mission-critical data. New technology will also need to enable data to flow freely and securely while protecting employee and hiring candidate privacy.
Thank you for reading. For additional insights into what the future holds, please feel free to browse these complimentary research resources: