Worldwide Spending on Digital Transformation Will Reach $2.3 Trillion in 2023 (IDC)
You’ve heard the phrase digital transformation ad nauseum for the past few years, and though it has profoundly impacted consumers as well as companies in nearly every industry around the world, it may be surprising to learn that the term is still very much relevant today. Now considered essential to business success, digital transformations are redefining the business-IT relationship, reshaping technology portfolios, and revolutionizing how work gets done.
"In the current competitive business world, digital transformation is the topmost strategic priority for every organization. Digital transformation involves managing the existing business and building for the future at the same time, something like changing the engine of the plane while in flight," said Ashutosh Bisht, senior research manager for IDC’s Customer Insights & Analysis Group(IDC).
According to a 2016 Harvard Business School study, firms that embrace digital tech transformation saw an average 55% growth in gross margins over a three year period (growth that will echo down through earnings, net income and profits), while companies that weren’t sufficiently prepared to embrace digital tech had substantially lower margin growth, just 37%, during the same period. What’s more, a recent study by DXC and The Economist found that 68% of senior company executives have seen profitability increase over the past three years as a result of digital transformation, while 74% envisage a rise in profits because of their digital strategy.
Today, digital transformation means a variety of things — expanding usage of Office365, adapting networks for hybrid environments, integrating AI and blockchain to everyday process, utilizing Internet of Things (IoT), edge and cloud compute, impacting the overall business—for future-stage growth in the new decade.
Today, data is one of the main catalysts for digital transformation; companies are leveraging data to improve customer experiences, open new markets, make employees and processes more productive, and create new sources of competitive advantage – working toward the future of tomorrow.
In the coming year, new and evolving ways of wrangling data will take center stage in the enterprise, and innovations in artificial intelligence, edge computing and software robots will increasingly be leveraged for competitive advantage.
AI for example is helping companies attack daunting or near-to-impossible challenges for tech or business staff. AI has enabled employees to focus on higher-value tasks by tackling the following:
- Demand forecasting
- Personalized social media content/advertising
- Predictive maintenance on machinery/vehicles
- Competitive analysis
- Proactive/personalized customer service
- Inventory Planning
- Risk analysis
AI also plays an important role in defending organizations from security threats, a trend that Vinay Sridhara, CTO of Balbix, expects will continue to gain steam in the year ahead. “Enterprises are using AI to enable their cybersecurity teams to get an accurate idea of breach risk by analyzing up to several hundred billion time-varying signals across their network,” Sridhara says. “This enables chief information security officers to continuously analyze high-volume, high-velocity cybersecurity data and gain real-time visibility into their company’s breach risk. AI-powered platforms even provide prioritized steps to remediate issues to drive cyber-risk reduction throughout the enterprise, enabling them to better protect their customers’ information.”
Data provided by Blissfully 2019 SaaS Trends Report shows an average company 200-500 employees uses over 120 apps, but that same company shares an even more interesting number, about 2,700 app-to-person connections. Meaning these application and employee relationships produce data that needs to be analyzed, relationships that need tracking, management and security. That average company spends almost $900,000 a year on SaaS.
Datometry surveyed 166 IT leaders and found that cost cutting initiatives was the number one reason to migrate computing to the cloud. But as we look to the new decade and integrate more M2M, AI and IoT into the business, top cloud initiatives include: standing up hybrid environments, public cloud adoption to replace data centers or utilize data analytics. Companies will invest in business resiliency and continuity along with developing/utilizing APIs and interoperability to further stitching existing tools together that help with automation.
Productivity & Collaboration
Forbes reports that companies earning in excess of $1 billion in annual revenue see an average increase of $700 million over three years, simply by investing in customer experience.
It’s time to implement technology that can automatically identify, measure, and respond to shifts in consumer behavior—and in real-time. For example, in a call center environment, cloud-based communications platforms can identify potential problems such as longer than average hold times or an increased rate of abandoned calls, allowing these issues to be addressed swiftly and before they have a long-term, negative impact on customers.
The ability for call centers and marketing departments to use qualitative and quantitative feedback from customers via call transcripts, surveys, social media interactions, etc. gives valuable insights into customer sentiments and a better understanding of the customer journey.
The employee experience is also as a crucial factor for organizational success—not simply in terms of productivity but also as a fundamental attraction for highly sought-after talent and a way to get them in the door. In a survey of nearly 300 companies to determine what makes a great employee experience, researchers at MIT found a surprise at the top of the list: video. Investments in video technology lead to innovation, as well as improved collaboration and productivity, researchers found, thus solidifying how embracing digital transformation initiatives can benefit a company long-term.
Partners looking to be stay relevant must understand the nuances of digital transformation in 2020 and beyond. Being able to identify the various types of projects companies are working on such as integration with an ERP or leveraging CRM data to improve the customer experience. The last decade was about what to migrate, where and when. This next decade is about the change experience and how it affects the company, its network, its people and customers. The focus of digital transformation projects in the near-future won’t be to replace employees but to employ greater efficiencies so time can be spent focused on revenue-generating and/or mission-critical initiatives.
Partners should embrace the role of digital transformation guides, leveraging resources such as TBI's Cloud Journey Guide, which reviews various digital transformation scenarios and where the IT consultant fits in. The new decade is about scaling, and successful partners know how to prepare and position their customers for growth.
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As Marketing Communications Manager, Amanda is responsible for creating content and carrying out internal and external communications programs; she also develops educational materials to enable TBI’s partners to sell emerging solutions. Amanda also contributes to ensuring consistency with branding and ensuring TBI provides useful and relevant content to our partners. You can reach Amanda at email@example.com or connect with her on LinkedIn.