7 Key Digital Transformation Trends: Understand What Your Business Needs Now and in the Future
Customer demands are growing, promoting global markets growth and rapid expansion of businesses. Digital transformation preserves company positions in highly competitive markets by helping to respond to customer needs faster than ever. The more you engage in digital transformation, the more you’ll satisfy clients’ demands, and the more enormous profits you’ll receive.
In this plain chain, the core value is awareness of what digital trends benefit your development and growth. You may invest in high-priced warehouse robots and perfect your order picking and packing, and still, if you belong to the small and medium business sector, it turns out to be more reasonable to automate your communications with existing clients rather than spending money for human labor replacement. The power is not only to know digital transformation trends but to learn how they can contribute to the success of your business. That is the reason to read this article and evaluate how to profit.
What Is Digital Transformation and Why Is It Important?
Statista calculated global spendings on digital transformation would reach $2.4 trillion in 2024. Its research stressed that most digitally competitive companies are in the US, and their top priority is increased operational efficiency.
Forbes paid great attention in its IT field review to COVID-19’s role in transforming businesses digitally: “device form factors become interesting again to keep contact with the customers stronger” as well as privacy and confidential computing priority.
Anna Choi, Head of Digitalization for Schindler, author of 16 successful digital strategies for the Asian Pacific region, in her TEDx talk, specified “connect with the focus on customer’s experience as the main factor of efficient digitalization.” She outlined the necessity not only to employ machine learning, IoT, or AI to automate business processes but to analyze every impact it gives for customer satisfaction during each development and growth stage. That is the reasonable focus not to go nowhere but to obtain larger revenue and stronger clients’ loyalty.
Digital transformation is an overall change in how the company delivers its value to customers. It involves the following stages:
- Digitizing – the basic business processes (converting documents into e-format, establishing electronic document flow inside the company, designing e-collaboration between business participants)
- Digitalizing – the fundamental shift in how the company interact and deliver its services (implementing SaaS or mobility as a service)
- Digital transformation – the cultural change in corporate culture and market presence, keeping sustainability under totally new working conditions
Despite the fact digital transformation is quite a complex and multi-layered process, its outcomes are worthy. Because, in the end, and after substantial investments and efforts, the company gains:
- improved operational efficiency;
- increased process visibility;
- easier auditing and business processes monitoring to get more valuable insights in decision-making;
- costs savings and revenue boost due to financial risks decrease;
- better employee engagement and fewer administrative expenditures;
- better supply chain management;
- more flexibility;
- quicker response to changing market trends; and
- efficient decision-making inside the company.
To get the full benefits of digital transformation, one should follow not only business processes conversion, but a deep cultural change. And as Andrew Annacone, Managing Partner at TechNexus, stated in his LinkedIn blog, “Transformation is not an objective itself, it’s just an efficient tool to deliver long-term value growth.”
Main Digital Transformation Trends
Deloitte uncovered the correlation between digital maturity and financial performance. The study outlined the following key digital factors generating more revenue: flexible, secure company infrastructure, digitally savvy, open talent networks, intelligent workflows, and digital business model adaptability.
McKinsey calculated 54% of digital revenue is generated by digital-native startups, and traditional organizations are in minority. That is why, in the blog, we presented an overview of the basic trends of digital transformation for a better understanding of where and how to go for successful digitalization.
5G Becoming a New Normal
Most modern digital trends are focused on telecommuting, security, mobility, and automation. Thus, 5G is becoming a new normal granting robust connectivity, the ability to stay online reliably, and being mobile and effective.
As Forbes reported, market leaders such as Samsung, Apple, or Xiaomi are already releasing 5G phones in collaboration with Qualcomm. The latest one enables 5G affordability for as many users as possible to strengthen and spread the network.
“Judge”, a business solutions blog, reported 5G as “the technology that will change business in 2021 and beyond.” They describe the technology as a tool bringing more speed, capacity, more efficiency to remote working, tracking, and monitoring. Once stakeholders can keep an eye on everything happening inside the company, it will contribute greatly to faster decision-making, more precise assets maintenance, and predictive data analytics because they can get supportive data quicker and safer via brand new connection type.
Customer Data Platforms Explosion
Agile and up-to-date connections with the clients are critical for every business to address the pains of the users, satisfy their needs, and make them loyal. Customer data platforms (CDP) target this need successfully. They pick, analyze, and store first-party data from one client interacting with a lot of devices. A person can order pizza from a home desktop computer, buy a smartphone from a laptop at work, or search a hotel using a smartphone. All the time they are generating first-party data valuable for marketing. CDP provides tools for making the entire portrait of the client and using it for customer retention.
Lizzy Foo Kune, the VP analyst for Gartner, shared on her Twitter some valuable insight concerning CDP utilization as an important digitalization trend. She named CDP “not a newly come trend, but a repacked tool of different ways to process first-party marketing data.” CDP enables:
- gathering data;
- uniting data around the client’s profile;
- segmentation of customer databases; and
- arrange communication between those segments.
To digitalize communication with the customers for stronger loyalty and more revenue, omnichannel marketing is essential. CDP implements scripts for web tracking, mobile SDK, and flexible API integrations.
Data Analytics for Better Customer Experience, Leading to More Profit
Once expanded bandwidth enables a company’s online presence, data analytics can become another effective step of going digital. The business obtains advanced opportunities to perfect customer experience and utilize data properly. It’s possible to streamline operations, and even arrange prescriptive shipping (selling the items the customer hasn’t ordered yet) to boost the profits.
Forbes identified several trends dominating data analytics:
- Increased demand for visualization: FortuneBusinessInsights counted that the market of visualization tools would expand from $8.85 billion in 2020 to $19.2 billion in 2027.
- On-demand data availability: if it takes five months to get data supporting urgent business decisions, the opportunity for development is lost. It’s important in the fast-changing global market to have access to the data demanded.
- AI-driven data interpretation and narration: it’s not enough just to pick data and process it, but it’s necessary to explain.
Mary E. Shacklett, the President of Transworld Dada, advised business owners to extend any app with an embedded analytical dashboard to learn more from the data processed.
AI and ML Influencing the Key Options of Successful Businesses
To analyze and explain data, AI-based solutions come in handy. This trend targets security risks elimination (AI enables suspicious behavior detection or identifying a client’s trustworthiness), and effective decision making. AI and ML are present everywhere under the necessity to pick, store, process, and analyze big data.
As Business2Community resource reports, AI reduced the shop’s overstock saving financial assets and enabling reasonable assets usage. AI and ML-based solutions can reduce refunds by 2,000,000 and improve shipping time for better customer satisfaction. These technologies bring more flexibility and a higher level of automation.
RPA to Perform More Agility
IDC predicted that in 2022, 75% of companies would have their own digital transformation roadmaps, where automation will become one of the key objectives. ERP (enterprise resource planning) is one example of how automated business processes (procurement, stock planning, or returns management) can serve the business for higher ROI and quicker growth. Gartner identifies automation as “not just one process of going digital but as a complex comprehensive digital architecture.” This means once a business develops one tech solution, it may need one more to synchronize the rest of the processes.
RPA makes your business more flexible and agile, bringing the following benefits:
- improved business outcomes
- easier decision-making process
- a decrease in data entry faults
- more varied scope for data collection;
- substantially reduced workload; and
- less expenditure for labor costs and administrative needs.
RPA “robots” imitate repetitive human actions, enabling business processes automation without a huge time consumption because they do not need existing IT systems renovation or updating.
Cybersecurity to Mitigate Risks and Decrease Financial Losses
The more technologies applied, the more important the cybersecurity issue becomes. TechieExpert outlines the following ways this trend is reflected on the market: AI and deep learning, cybersecurity via blockchain, and embedded hardware authentication. Hackers fully exploited the pandemic: a 238% rise in attacks on banks, and a 600% increase in attacks on cloud servers were detected in 2020. Hence, cybersecurity has become a vivid digital transformation trend in 2020 and 2021.
Confidential computing has gained momentum as an effective approach to shoring up cybersecurity, especially in communications and data privacy. Confidential Computing Consortium was founded as a project community striving for data security and accelerating the adoption of confidential computing around the Globe in cooperation with Google, Microsoft, IBM, Alibaba, and VMware. They deal with data protection by performing the computation in a hardware-based Trusted Execution Environment. CCC unites hardware vendors, cloud service providers, and software developers to fasten the adoption of TEE (Trusted Execution Environment) technologies and standards.
Trends of going digital are interconnected. And the key option of the 2021 digital environment is combining and uniting the existing tools (e.g., CCC for secure computing via hardware producers and cloud service providers cooperation, CDP as a set of tools to process first-party data). If you consider blockchain for cybersecurity, you see the necessity of AI-based solutions to mitigate malicious activities. If you implement RPA solutions, you observe the urgent need to stay online reliably 24/7, and here 5G becomes critical.
Digital Transformation Case Studies
Digital change roadmaps can vary. However, Jeff Bezos said that under extreme marketing volatility, every business owner has the only way to strengthen the competitive advantage of the business by going digital and supporting the agility of this movement.
Everest Research Group calculated 73% of the businesses didn’t get perks after investing heavily in the digital shift. However, there are many examples of successful digital change: cases where companies do not fail to get value from their digital change. Let’s outline some of them.
Innovecs digitilized communication between doctors and patients for Careology. We designed a telehealth platform from scratch, having performed outstanding social added value. After creating the prototype and MVP, Innovecs developed iOS, Android, and Web apps to deliver key functionality for patients with a cancer diagnosis:
- the monitoring system, where recognized symptoms are presented, ranged from 0 to 4. This gives the possibility of self-monitoring and synchronizing with Apple Watch or Google Fit;
- notes to enable patient’s personal clarifications;
- medication, an option to schedule taking prescribed medicines in various dosages;
- in-app calendar, where patients can find stored medications, symptoms, public, or private notes.
It’s a case where Innovecs’ skilled development team shared the Careology vision of the service, accompanying them on every stage of digitalization, and created an industry-leading product. After obtaining an efficient digital tool, Careology’s patients were able to increase the number of Up Days and manage their Down Days.
Netflix started its “pay-per-rental” business model in 1997. And the decision to leverage digital transformation and wish to innovate became the milestones, which saved the company in 2007. Netflix changed how we experience free time, having applied the following digital transformation trends:
- Technology and 4G (5G): availability of video content on any devices
- “On-demand” service type: watch whatever and wherever you want
- Data-driven content: utilize an option of content delivery based on personal users’ preferences
Adobe is another example of going global and sustainable as a result of the right digital transformation strategy. In the beginning, the company started as a license-based business model and sold photo, video, and vector editing software till the big 2008 recession. That year, stakeholders made a decisive move to shift from a licensed-based business model to a cloud-based one.
Today the company operates through three subscription-based models (Creative Cloud, Document Cloud, Marketing Cloud). And it reached groundbreaking annual revenue of $12.87 billion in the last fiscal year (2020), showing the outstanding 15% year-over-year growth. Isn’t it enough proof of digital change sustainability and positive influence on the whole company’s growth?
Any of the examples depicted above shows the fact every organization faces a period of choice either to go digital or extinct.
Overall Glimpses on How To Follow Digital Transformation Beneficially
To undergo transformational digital shifts successfully, stakeholders should pay attention to all the core elements of the process: understanding customer needs, a clear vision of transformational strategy, knowing the list of the processes demanding to digitize, and having tools for performance management.
To follow digital transformation with great performance, it’s critically important to develop the right digital strategy considering all your business needs, specify a step-by-step roadmap, and choose the proper solutions you’re going to utilize for substantial digital shifts. And only then are you able to experience the top benefits (in accordance with the McKinsey research) of adopting digital models like in the picture below.
All digital transformation trends (5G, data analytics, AI, automation, or cybersecurity) should be implemented via a precisely designed roadmap comprising:
- the vision of the company digital infrastructure;
- retraining and education of the staff;
- deep cross-organizational communication change; and
- shift to the agile manner of operations delivery.
Once you made a decision to go digital, you’re welcome to ask any questions about digital strategy design and custom solutions for its implementation addressing Innovecs’ expert team.