In today’s digitally connected world, every part of the business is revolving around new expectations, competitors, channels, and opportunities. The plethora of innovation in technology has led organizations to adapt themselves with the changing environment to maintain their position in this highly competitive marketplace. In the past few years, the world has seen an emergence of a new breed of digital companies, making a new line of business.
Companies that quickly deliver digitally enabled products or services and those who garner data from market interactions and use insights to rapidly optimize their value chain are gaining more competitive advantage. But who hasn’t involved yet, need to embrace the world of digital by making their journey on a digital transformation path.
Digital transformation is nothing but the integration of digital technologies into all areas of business, redefining the way of how businesses operate and deliver value to customers.
Impact of Digital Transformation Across Businesses
Digitization has brought with it an adaptation of people to a more agile, convenient and connected world. It has enabled organizations to gain information in real-time, assess data and follow the customer along the entire value chain to keep them authentic and safe. In turn, it makes easier to coordinate decisions for the better running of a business.
In the business landscape, digital transformation varies between two variables. First, measure the revenue that contributes to each action in relation to competitors. And second, add value to clients by making use of technology. Both are making the customer experience accessible and controlling the whole supply chain.
Currently, digital transformation has become essential for businesses, giving decision-makers the opportunities to adapt their business operations in this fast-moving world. Companies that digitally transform will be able to connect and lure more customers, accelerate innovation and claim a greater share of profit in their industries.
However, adopting digital processes as tools to accomplish business goals requires multi-layered planning, method, and execution. It has become more of a cultural phenomenon in the realm of business rather than a mere strategy. And to do so, companies are looking at a digital-first strategy. But some of them are tentative to invest in digital transformation without knowing how the investment will pay off. But when performed strategically, it can enhance stock prices and revenue in the long run.
There are lots of brands that have developed a successful business by digitally transform their operations, making every purchase of the customer faster and instant. By leveraging GPS-driven drones, e-commerce giant Amazon, for instance, can deliver almost every single product directly to any place, but they are challenging in offline distribution. So, with the online platforms, it can become easier to access and convince targets, developing special actions or messages as per their emotions or steps on the purchase funnel.
Thus, digital transformation is having a wide-ranging impact on the business environment, creating both opportunities and challenges.
Why Digital Transformation is Essential for Business Growth
As technology advances, it optimizes and improves the relationship between brands and consumers, which assists in making better marketing decisions based on target reactions and enables to have all the supply chain under control. However, digital transformation is not just about technology disruption on the business, it is also about how these technological innovations are adopted and utilized.
According to a report, the global spending on technologies and services that drive digital transformation is anticipated to reach approximately US$1.97 trillion by 2022.
Here are some reasons why digital transformation is essential for businesses seeking to grow and remaining competitive in this digitally connected world.
Supremacy of Data and Analysis
Interactions with customers digitally produce and rely on an increasing volume of data. Afterward, that data feeds the analytic functions, giving digitally transformed organizations the insights they need to reinforce the continuous cycle of satisfying customers’ needs and expectations. A successful digital transformation majorly based on the capabilities of big data. So, without making the transformation that puts data and analytics at the core of a business’s operations, that business will be left behind in the competition where their peers have made the shift.
Digital transformation is forcing organizations to alter their business models and adapt to the new market reality. Today, as customers expect germane content regarding what they are doing anytime, anywhere and in the format and on the device of their choosing, this can be challenging for businesses. Thus, it is essential to embrace technology in order to deliver a unique customer experience. Most companies even put the customer at the center of their business strategy. For a digitally transformed business, each customer interaction is a gold-mining opportunity to collect information about what is working and what is not.
Employers these days are looking for new ways to enhance business productivity, making workforce engagement a strategic tool for it. Digital technology here is playing a pivotal role in helping employees to become effective in their primary roles. Moreover, digital transformation offers a valuable opportunity for core business functions like finance and human resource. That is enabling to move away from manual processes to automating key areas such as payroll, giving the ability to leaders to focus on wider business opportunities.
Power of AI
Artificial intelligence will be a game-changer beyond the analytic power derived from big data. Nowadays, an increasing number of mundane and tedious tasks are already being automated, freeing up employees or human workers to focus on performing other tasks and addressing customer issues. However, this automation will deliver more problem-solving capabilities that emerge through AI in years to come. Also, with advanced learning, machines will be able to work collaboratively with humans to solve compound commercial issues. So, as with big data, businesses capable of taking the lead on AI developments will garner a massive competitive advantage.
Migration to cloud infrastructure, at the core of the digital transformation processes, is inevitable. Cloud is a significant component of digital transformation as it offers the agility organizations need to measure their data requirements. By leveraging a cloud platform along with a focus on data-driven innovation, an organization does not have to worry about the limitations of its digital infrastructure and just to focus on growth through customer insights.
Understanding the Essential Pillars of Digital Transformation
There is no doubt that digital transformation has made its way into almost every industry and organizations seek to stay competitive have to keep pace with ongoing innovation and transition. It means businesses just need to upgrade their IT models and announcing strategy. Thus, in order to make the transformation successfully from traditional to digital, organizations must consider essential pillars of digital transformation beyond technology.
So, let’s have a look at these essential pillars of digital transformation.
In order to drive digital transformation initiatives within an organization, it is significant to consider the customer journey, behaviors and expectations. Creating a consistent, connected experience for customers, citizens, employees and partners is the most vital factor in satisfying peoples’ digital expectations. Customer expectations are the foundation of any investment, but asking customers to change to fit new processes, perhaps losing them altogether in the process.
Digital Supply Chain
Web-enabled connections between people, systems and devices can transform business models and produce better outcomes. However, most businesses miss the central role of end-to-end connectivity in this process, and are just focusing on the digital front-end. Simply creating pixel thin solutions through new apps also fails to address the underlying process and integration changes that are necessary to optimize digital experiences, just creating more complexity over existing silos. Thus, creating a truly digital business requires the development of end-to-end process flows that can optimize the fulfillment of connected experiences.
To transform business processes from traditional to digital must require innovation. It can be defined as a sudden spark of creativity that paves ways to the creation of something, which transforms the face of businesses. Sometimes, these innovations are massive and completely disruptive of business models, while they can also make a small and meaningful difference that improves customer satisfaction or distinguishes an offering in the market. For any innovation, be it transformation or creating new products, there must be a space for open communication, collaboration and freedom to the creation of something different.
Leadership within an organization can come in many forms, but when it comes to transformation, it must lead by top management. Leaders should be proactive and always be ready to make strategic business decisions and take effective actions. As the landscape of technology is moving rapidly, leaders also need to move with that change, keeping their organization stays updated and competitive. They also must carefully examine all options while investing in and leveraging advanced and emerging technologies.
Adoption of Modern Software
Making use of modern software development tools and processes, such as cloud-enabled tools and architecture, along with agile, DevOps, CI/CD and automation processes, are fundamental for digital transformation. These development tools and processes are aimed at augmenting the pace of code changes and making it simpler to manage increasingly compound applications across the board.
Thus, considering these essential pillars businesses can drive digital transformation effectively and efficiently, assisting in getting ahead of the competition.
Top Trends Defining Digital transformation in 2020 and Beyond
These days almost every CIO is actively involved in digital transformation initiatives, leveraging a combination of cutting-edge technologies to modernize legacy business operations and recognize and implement new business model opportunities. However, when it comes to the scope of digital transformation with the changing technological landscape, there are questions raised about how it will be in the future? and what will be the near- and long-term business benefits of it?
Here we have accumulated some top digital transformation trends to watch in 2020 and beyond.
With the predictions of 75 billion IoT devices by 2025, the increased use of the internet of things will go beyond the technological advancements. As this large number of devices will produce the flood of data, companies need to embrace analytics systems, powered by AI and machine learning, that can create actionable insights from the troves of data. IoT assists in building smart connected products to provide new functionality, enhanced reliability and great product utilization. The technology also helps in opening up new business opportunities, delivering meaningful, tailored customer experience, lowering operating costs, enhancing employee productivity, bolstering business efficiency and more.
Finding out and assessing data is at the core of digital transformation. And a journey towards it moves an organization from a process-defined business to a data-driven business. Most businesses nowadays are putting their data to work in order to enhance customer experiences, optimize operations, and bring new products and services to the real world. As data emerge at an unprecedented rate and the ability to link that data with indicators or issues, it enables companies to not just become more efficient but also change what it does.
Moving to Multi-Cloud Environment with APIs
The majority of large enterprises today run on multi-cloud environments. However, managing it is complicated, particularly when it comes to migrating application workloads between cloud infrastructure. Thus, API-led application development and containerization will ease these challenges. APIs (Application Programming Interfaces) help in unlocking the data and unique functionalities of applications residing in multiple cloud environments.
Investing in Data Analytics
Companies that are not pouring capital heavily in analytics probably left behind in years to come. Investing in analytics software will continue to increase in importance as there is far too much valuable customer data to be collected, and will require to be processed and turn into insights to remain competitive. Major large enterprises see data as a commodity, which defines how this became a major area of technology investment across several industries. The collection and analysis of data is a common aspect that is often combined with other digital transformation components, such as cloud computing and IoT. Typically, data analytics is the driving force for those organizations embarking on a digital transformation.
Value of AI and Machine Learning
Businesses are increasingly investing in AI-driven technologies to accelerate and personalize customer services, minimize human bias, and improve productivity. As more companies adopt AI, more tasks will be automated. There are a wide range of areas AI has made an impact, including fraud detection, investing services, and loan approval. In the retail sector, this is leveraged for personalized offers and promotions, giving customers a convenient way to engage with a brand, and increasing customer experience for businesses. In healthcare, organizations utilize machine learning to improve disease detection. Thus, to maximize the value of AI and machine learning, companies must begin with effective data governance.
Despite storing centrally, blockchain is a virtual database that is stored in a network where each user within the network has a local copy of the database. This decentralized structure combined with the use of cryptographic procedures ensures that no information in the database can be secretly compromised by a user. Its decentralized nature creates maximum transparency in every transaction in the supply chain, from the procurement of raw materials and production to distribution and the sale of the end product. Blockchain can also become an essential building block when it comes to setting businesses apart from competitors in the coming years.