The future of digital transformation
Digital transformation has been gaining traction because it adds value to interactions with customers
Over the past few years, digital transformation has evolved from a buzzword that was only used in boardrooms into something that has become critical for most companies. But what exactly is ‘digital transformation’ and how does it benefit an organisation?
What is digital transformation?
Digital transformation refers to the process of integrating technology into all aspects of a business, thus changing customer experiences and how the business operates and meets its market requirements. This change enables businesses to experiment, challenge the status quo and defy convention. In a nutshell, digital transformation is the recreation of a business in the digital age.
You might be forgiven for thinking that this transformation begins with traditional business roles like marketing, advertising and sales, but that is not necessarily the case. Instead, digital transformation starts with how a business thinks and interacts with its customers.
Digital transformation has been gaining traction because it adds value to interactions with customers. Thanks to digital transformation, organisations are actually taking a step back and contemplating how they are running their business.
Since we are truly in the digital age, businesses are coming up with innovative and clever methods of leveraging technology – Netflix being one such company. It began as a mail order service and has continuously evolved with the times since. It is currently taking on traditional broadcasting by offering a huge variety of content with competitive pricing. Digital transformation gave Netflix the capability to provide video streaming to its customers, but it also gave a sneak-peek into the preferences and habits of viewers. Netflix utilised data and digital transformation technologies to improve its user interface, user experience and, ultimately, the creation of its in-house movies and shows. This is a great example of digital transformation: making use of existing technologies to improve the running of a business.
Digital transformation provides organisations with a variety of advantages, including:
- Improving overall customer experience;
- Leading to better insights with the help of digital analytics;
- Encouraging departments to collaborate;
- Improving innovation, speed and data security and transparency;
- Improving the knowledge and skillset of employees.
According to a survey conducted by Altimeter, organisations that are looking to digitise themselves can make use of the following digital transformation roadmap:
- Improve procedures to accelerate the digital switch;
- Update e-commerce programmes and websites to make them mobile friendly;
- Incorporate e-commerce, mobile, web, social and service efforts to provide customers with a smooth experience;
- Design a comprehensive social media plan;
- Redesign the entire customer service process to meet and eventually exceed the expectations of customers.
However, in order to achieve these objectives, organisations might face digital transformation challenges in the form of:
- Alteration of organisational structure;
- Thinking from the perspective of a campaign mentality during the transformation efforts;
- Cooperation and coordination between team silos and departments;
- Budget and resource allocation;
- Full backing of the leadership team;
- Regulatory and legal compliance.
…an estimated 70% of IT managers are of the opinion that big data plays a key role in revenue growth
Forecasts about the future of digital transformation
- Increase in implementation of digital transformation strategies: organisations are digitalising themselves to avoid falling to the bottom of the pack. According to the State of Digital Business Transformation 2018 survey conducted by IDG, 89% of organisations have either implemented or are in the process of implementing digital business strategies. The technologies that are already implemented include mobile technologies (59%), public cloud (45%), private cloud (53%), analytics/ big data (58%) and APIs (40%).
- Greater investment in IT and requirement of new skills: according to a joint survey conducted by Gartner, Forrester and IDC, digital transformation initiatives are constantly increasing, thus resulting in the devotion of 50% of IT budgets in organisations by 2020. In addition, organisations who have digitalised themselves will focus on hiring people who specialise in digital skills like analytics, mobile app development and design thinking.
- Big data analytics — the base of digital transformation? It should come as no surprise to see organisations employing data analytics as the cornerstone of their digital initiatives. This is because data analytics have the potential to raise $60+ billion in yearly savings by 2020. Big data gives organisations data to provide them with new opportunities, resulting in an increase in employee productivity, efficient operations, effectiveness of processes and higher profits. In fact, as per the IDG survey, an estimated 70% of IT managers are of the opinion that big data plays a key role in revenue growth.
- Importance of Internet of Things (IoT) in the digital business strategies of organisations: as of 2018, there were 22 billion IoT devices in the world that have resulted in the creation of approximately 200,000 new IoT services and apps. IoT devices are beginning to have a great impact on how organisations conduct their business. According to IDG, 61% of organisations declared that IoT plays a key role in their digital transformation strategies. IoT is being used by organisations to monitor equipment (53%), collect product or customer data (41%), manage compliance, security, performance and risk of IT assets (57%). In addition, 73% of the manufacturing industry have employed IoT in their digitalisation process, with 69% stating that they use it to monitor machinery and equipment.
- Artificial intelligence (AI) comes into prominence: for those who are familiar with Amazon’s Alexa, Google Assistant, Microsoft’s Cortana and Apple’s Siri, AI is nothing new. However, in the fields of marketing, customer service and analytics, AI is slowly gaining prominence. Organisations are utilising AI to communicate with their customers, which is proving to be cheaper, smarter and faster. AI is the way forward with software companies like Salesforce Einstein, IBM Watson and SAP Leonardo embedding it in their websites, platforms and processes.