Forrester predicts 80% of companies will fail to comply with GDPR in 2018
The research firm's latest "Predictions 2018: A Year of Reckoning" report outlines 13 business forecasts for the coming year.
Forrester has released a report outlining its 2018 predictions around the trends and technology that are most likely to impact businesses in the coming year. Among the forecasts listed in the “Predictions 2018: A Year of Reckoning” report, the research firm claims 80 percent of companies will not comply with the General Data Protection Regulation (GDPR).
The report says that 50 percent of the companies not complying will do so willingly after weighing the cost and risk benefits of meeting GDPR standards.
“Of those non-compliant firms, 50 percent will intentionally not comply — meaning they have weighed the cost and risk and are taking a path that presents the best position for their firms,” writes Forrester in the report.
Based on its collective research and data, Forrester’s report includes a total of 13 predictions that span various industry trends, from upcoming artificial intelligence (AI) and blockchain initiatives to GDPR, CX standards and digital transformation.
There are a number of predictions within the report that directly involve the need for greater adoption of marketing technology. For starters, Forrester says AI and blockchain will play a significant role in the year to come.
According to the report, current AI investments have been too narrow, focusing AI technology on augmented intelligence and conversational interfaces, as opposed to AI investments that are geared toward reinventing businesses and making it possible for companies to enter new markets or create new products or services.
Forrester predicts 75 percent of AI projects in 2018 will continue to produce “underwhelming” results, forcing business leaders to reconsider their AI investments.
By Forrester’s calculations, blockchain has an even bigger hill to climb — or better, the executives trying to use it to their advantage. The report claims that 80 percent of blockchain initiatives failed to meet expectations for the following three reasons: Marketers oversold the technology, blockchain testing was not comprehensive enough, and blockchain solutions were applied to problems that could have been solved with other solutions.
“In 2018, the combination of rhetoric and enthusiasm will continue to limit blockchain gains,” says Forrester. “However, 30 percent of proofs of concept will accelerate blockchain for those companies able to consider its operational impact.”
The report also confirms intelligent agents — platforms designed to collect consumer preferences, behaviors, transactions and emotions (think Alexa, Siri or chatbots) — will influence 10 percent of purchase decisions in the year to come. It also claims that 67 percent of retailers will not be equipped to take full advantage of these platforms.
“Lack of skills, quasi-differentiated brands, and aged operations are hurdles for traditional retailers, but the role of intelligent agents will be the thorniest issue in 2018,” writes Forrester.
Not only does Forrester predict retailers will be unable to utilize intelligent agents, it also forecasts that 25 percent of brands will not have employees in place who can interpret and influence AI-driven platforms. In fact, unaddressed talent needs are one of the report’s 13 predictions.
Forrester says that the problem isn’t a lack of digital talent, but a lack of specialized roles, including data scientists, information security analysts, high-end software developers and experience designers. The report claims that the companies defined as “digital leaders” have 90 percent of the talent they need, but those that define themselves as lagging on the digital front only have 19 percent of the talent they need.
The lack of experience designers will impact businesses on another front as well, as they are responsible for designing CX (customer experience) standards, and, according to Forrester, they are key stakeholders in a company’s digital transformation process. Pulling from its “2017 CX Index,” Forrester says CX has plateaued, or has been on the decline, for most industries and companies because “most CX initiatives had too little clout to force meaningful operational change.”
Without proper attention given to CX efforts, Forrester predicts that 30 percent of companies will see further declines in their CX quality and eventually will experience a net loss in terms of their growth potential.
Forrester claims 60 percent of executives currently believe they are failing when it comes to digital transformation and predicts 20 percent of CEOs will fail to fully embrace digital transformation — resulting in more companies being acquired or perishing.
“Lagging results have created a loss of confidence in the CIO, driving the number of chief digital officers and business units creating their own digital strategies,” says Forrester. The report goes on to say that digital transformation is ultimately the CEO’s responsibility.
“Digital transformation is expensive; CEOs can’t drive operational savings fast enough to fund it and are cautious about destroying margins.”
Looking at other trends with the potential to directly influence a company’s bottom line, Forrester says 10 percent of businesses will be able to turn security investments into company profits.
“Security and privacy teams need to know exactly who is accessing what and resolve identities across entry points,” says Forrester. “Marketing can use that same capability in the martech stack for personalization — transforming a security mandate into a CX enhancement.”
While not laid out in the report, the increased attention given to privacy measures and consumer identities will be mandated by GDPR as well, which has the potential to greatly impact a business’s profit margins should they be faced with penalty fees.
Forrester also predicts ad markets will be flat in 2018 as CMOs shift money from their traditional ad spend in the coming year and instead apply more of their budget to CX, loyalty programs and education around digital platform algorithms, as well as advancing their martech strategies.