Change in business is inevitable but those who embrace it are far more likely to see the benefits. As digital technology continues to advance and infiltrate industry, businesses have had to adapt to new ways of doing things. As we move into a new decade, organisations cannot afford to ignore digital transformation trends.
According to a 2016 Harvard Business School Study, firms that embrace digital transformation saw an average of 55 per cent growth in gross margins over a three year period. A more recent study by DXC and The Economist found that 68 per cent of senior company executives have seen profitability increase over the past three years as a result of digital transformation. In addition to that, 74 per cent envisage a rise in profits because of their digital strategy. Digital transformation done well isn’t just digital transformation, it’s business transformation.
However, from artificial intelligence to the Internet of Things, new technologies are presenting both solutions and problems. New digital technologies can solve major issues for businesses – creating more efficient internal processes, eliminating infrastructure costs and improving customer experience are all big advantages of digital transformation – and give rise to new opportunities. But, if implemented incorrectly digital transformation strategies can cause larger problems than they solve. With this in mind, the idea is to assess the technologies available and keep an eye on current trends so that you can evaluate which your business will benefit from most.
Many businesses are being left behind when it comes to digital transformation. A survey by Ahead revealed that, although 93% of enterprises are undergoing some form of digital transformation, 42% are struggling to achieve success. That is why it’s becoming increasingly important for organisations to carefully consider their strategy before jumping onto the latest trend.
To help you determine areas of your business that might require change, here are the key digital transformation trends we see as important for 2020. Consider each trend carefully and how it may benefit your business before making any important decisions.
Multi-cloud technologies become dominant
An increasing number of organisations now run on multi-cloud technologies, which is where different cloud providers are used in tandem to meet various business requirements. For example, AWS is generally considered the most ‘mature’ provider and offers more bespoke elements, but Google Cloud is particularly suited to big-data analytics and applications of machine-learning.
However, it can be difficult to manage multiple cloud set ups and transfer information between them. In the future, we will likely see a greater focus on cloud integration, including the hiring of cloud architects who can oversee your overall cloud computing strategy across multiple platforms.
Data analytics is a competitive advantage
The key to successful digital transformation is understanding and utilising data. The amount of data currently available to businesses is phenomenal, and growing, but without the ability to properly understand and use it, it’s next to useless.
Businesses are increasingly using data analytics in all areas of their operations, from streamlining administrative processes to ensuring the best customer experience. A central aim of data analytics is to improve decision-making. A greater understanding of what is working and what isn’t, as well as more information on customer behaviour patterns, will help companies to evolve their practices and overtake their competitors.
The future of business lies in data. And as a growing number of organisations find their way with utilising data, those who refuse to adapt will find it harder to keep up.
AI and machine learning drive efficiency and strategy
Artificial intelligence is becoming more widely adopted by organisations for its automation and personalised customer experience abilities. In fact, research by MuleSoft anticipates a 95% growth projection in the adoption of AI technologies.
The most common uses of AI are customer service chatbots, virtual assistants and basic task automation. Many organisations are hoping that it will also help to reduce unconscious bias during hiring processes. There a numerous ways the technology is being used to enhance the interview process such as LinkedIn’s candidate feedback.
We mentioned the importance of data analytics as a competitive advantage and, in the future, we can expect to see AI take a more central role in this area. Machine learning technology will help organisations to collate data, analyse it and put it into context so that it can be used to formulate a long-term business strategy. Again, it’s important that once you have the data you are able to understand and use it to see real business results.
Blockchain finally has its moment
The potential for blockchain, a technology which allows digital transactions and data changes to be recorded across multiple ‘blocks’ so that it cannot be altered, is huge. However, the adoption of blockchain technology has been fairly conservative in comparison with other technologies.
So far, it has mostly been used for cryptocurrency and the perception of it has not always been positive. However, blockchain has a number of potential, meaningful uses for business, including securing information in a contract and carrying out secure and verifiable international transactions. With key players like Amazon Web Services (link to Intuition AWS page) now offering fully-managed and scalable blockchain technologies, it is likely to become more prominent in the business world. We are already seeing a lot of the big players investing time and resources into blockchain, what’s more, they’re also putting together real use cases to go along with the technology.
The Internet of Things enables growth
By 2025, it is estimated that there will be 38.6 billion IoT connected devices in use across the globe. Interconnectivity is only going to become more important as digital transformation continues to roll out in different areas, such as with AI, 5G and blockchain.
The IoT is important because it enables the continued transmission of data across an interconnected network of devices. This, in turn, helps businesses to carry out those important changes we’ve discussed, such as better understanding customer needs, tailoring the customer experience, and increasing business efficiency through automation.
Digital transformation is about people not technology
Business history is littered with casualties from jumping onto trends without proper consideration. Simply having the latest technology as fast as possible won’t make a difference to your organisation unless you have the right people to plan and implement it properly.
New strategies should be approached with caution and focus on achieving realistic goals. Your customer should still be at the forefront of your approach and it’s imperative that you have the right leadership, teams and culture in order to effective implement technology change.
Digital transformation will continue to be a top priority for business leaders
With all these major advancements, we are confident that digital transformation will continue to be a central priority for businesses. Business leaders across the globe will be looking to take full advantage of the technologies available to them in order to improve internal processes, customer experience and ultimately boost their bottom line.
Hopefully those who embark on a digital transformation project don’t find themselves among the 42% who struggle to achieve success. It’s important to understand the specific technologies and their potential in order to execute the best strategy possible.
For more information on how to navigate digital transformation in your organisation, you can take a look at our dedicated business transformation page.