Which industry is more profitable? The automobile industry or the I.T. industry? Here are a few reasons why. I.T. companies need to innovate quickly. Automakers dominate the twentieth century, but they’re dinosaurs today. In addition, I.T. firms need to innovate rapidly to keep up with the speed of the Internet. Despite these differences, both industries are facing challenges. Which industry will win the complexity war? Let’s take a look.
Challenges in the auto industry:
The automotive industry faces several challenges, especially in emerging markets, such as China and India. The automobile industry is an increasingly global business, with globalization facilitating geographical shifts in production and trade. Auto suppliers engage in assessment and adjustment processes to adapt to changing market conditions. In addition, the evolution of trading blocs will impact the geographic configuration of production and trade flows. This shift will likely require a new strategy for automakers, which is a challenge.
The main focus of automotive industry product innovation has been to satisfy consumer demands. For example, General Motors ended the era of monochromatic, low-price Model T to produce different types of automobiles. In the U.S., automakers have responded to the desires of consumers for comfort, durability, and style. Automakers have developed plush suspension systems, rugged drive trains, and stylish chassis to meet these needs.
Increasing competition among automakers triggered the development of standards to ensure a competitive environment. However, before industry standards were defined, hundreds of automakers existed. The match resulted in the largest number of automakers operating in one year. Over 500 firms entered the industry in the first 20 years. After a year-long Model T to Model A changeover, Ford was forced to drop from first place. It also caused a decline in its market share.
Challenges in the I.T. industry:
The I.T. industry is constantly changing and evolving, so challenges are expected as it grows and matures. The biggest challenges are the threats posed by cyberattacks, which are increasing daily. The need to be mobile has led to an increase in the number of telecommuting employees, and more than half of companies have experienced an increase in phishing attacks. In addition, the US-China trade war and U.K. exit from the E.U. are putting a damper on the I.T. industry’s growth. Data breaches have increased 50% in the last four years, with an average loss of $200,000 per breach.
Besides the global economic slowdown and the gender pay gap, other challenges to the I.T. industry include Brexit and the rise of nationalism. Companies need to retrain their employees to cope with the changing technological landscape. A new law enacted in the E.U., the GDPR, requires I.T. companies to adapt to the new regulations and technologies to stay ahead of the competition. While there are many challenges to the I.T. industry, there are also many opportunities for companies to keep up with these changes and remain competitive.
In addition to these challenges, the I.T. industry faces a growing number of technological advances that are affecting the way companies work. Cloud computing is one such innovation, which opens up new revenue channels, but it requires skilled professionals to capitalize on this opportunity. According to recent studies, over half of I.T. departments in North America and 155% globally are experiencing a skills gap. In addition to increased employee stress, these gaps can slow down development and deployment and increase operating costs.
Need to innovate quickly:
The automotive industry is led by innovative ideas and is poised for rapid transformation. The traditional waterfall software development process does not apply to this industry anymore. Cars will contain three times more software than they do today. With that, automakers need to be able to roll out digital products and services quickly and address customer demands. They need to embrace the two-speed approach to research and development to address this need.
As the automotive industry faces an increasingly competitive environment, companies need to embrace innovations and new technologies. The pace of modern production is staggering. For example, Asutosh Padhi, a senior partner at McKinsey, the automobile industry will undergo even more disruption over the next decade, including major changes to the car’s head unit, production process, and time to market.
There are numerous areas where processes can be automated and streamlined in both industries. The automotive industry is no different, and there are multiple areas where technology can increase the pace of innovation. Smart factories incorporating Industry 4.0 technologies help improve production, lower costs, and reduce waste. To ensure that these innovations are implemented smoothly, companies must invest in a robust transformation program. A clear roadmap, coupled with a systematic innovation program, is essential.
Author Bio: Miguel Gabriel is a research-based content writer. He has worked in various industries, including healthcare, technology, and finance. He is currently working as a writer in Research Prospect, famous for dissertation writing services and Report writing services. When Miguel is not writing or researching, he enjoys spending time with his family and friends. He also loves travelling and learning about new cultures.