As evidence of the direction being taken by businesses worldwide, there are three key trends in strategy and three basic technologies that will propel digital transformation in the next four years.
The nature of technological evolution makes it difficult to foresee the next phases before they appear. At any given moment, it’s easy to feel that you’re at the pinnacle of technology: You have responded to the successive waves of advice about connected marketing, and now you’re ready to sit back and let your business run. The fact is, however, that we are still deep inside an ongoing digital transformation, and it’s necessary to keep looking ahead for the next set of changes just over the horizon. While businesses have always needed stability in order to succeed, the current environment requires stability in motion — the balance of a moving bicycle rather than the static structure of a building. This agility is driven by the need to respond to digitally savvy consumers.
Digital Transformation is Gaining Momentum
Initiating innovation within a large enterprise is like changing the direction of a giant ocean liner: you can do it, but it takes a surprising amount of time. Agility is at a premium, and it doesn’t necessarily come easily to complex organizations. The statistics tell this story: As of 2016, Forrester reports that only 27 percent of businesses currently have an explicit strategy in place for how they will adapt to the digital marketplace. However, CEOs do recognize the enormous revenue potential of going digital, and they expect their digital revenue to increase 80 percent by 2020. As evidence of the direction being taken by businesses worldwide, there are three key trends in strategy and three basic technologies that will propel digital transformation in the next four years. These are outlined below.
Strategy Initiatives Front and Center During This Decade
A coherent digital strategy will need to take the following three trends into account:
1. Digital Transformation Will be Central Strategy for CEOs
CEOs are increasingly recognizing the urgency of applying strategic intent to their company’s digital policy. IDC notes that among CEOs of G2000 companies, 67 percent identify digital transformation as the central core of their corporate strategy. Although B2C companies are leading this transformation, B2B companies will be closing the gap that has existed, because they are also guided by customer expectations.
2. Digital Functions Will be Unified
As enterprises compete to implement digital transformation, they are gathering together the related functions previously scattered across different departments. IDC’s report estimates that by 2017, 60 percent of companies with a digital transformation strategy will assign implementation of all aspects of that strategy to one single corporate executive. In this way, appropriate software and hardware decisions can be aligned to serve multiple needs. This type of integration between disparate departments such as marketing, sales, finance, development and others can save time and money throughout the entire organization.
3. Digital Skills Will be in High Demand
A robust digital transformation requires teams of skilled IT workers and digital development experts. In coming seasons, more resources will be directed toward hiring top talent in such disciplines as mobile app development, analytics and design. Your ability to hire the best people in these fields will be the way that your company can distinguish itself from competitors. After all, you can have the greatest digital strategy in the world, but it won’t be executable unless you have the staff and consultants to carry it out. Digital strategy consultants are an essential resource with which to supplement your in-house skill set.
The following three areas in technology will be expanding rapidly to accommodate the demands of implementing digital transformation strategies:
1. Big Data Analytics
An unsorted sea of digital information only provides your company with a medium in which to drown; To make data usable, you have to have the tools and know-how to sort out the information into actionable conclusions. Companies that get it right are able to harness the power of big data to deliver personalized experiences to their customers and develop new ways of monetizing them. Real-time data analysis provided by mobile apps are essential to a variety of automated actions.
2. The Internet of Things (IoT)
Introducing secondary devices into the relationship between consumer and digital provider, the Internet of Things is still in its very early phase. This barely-tapped frontier will soon become a vast territory in the digital transformation, and your company can stake a good-sized claim to it if you move promptly. The statistics are somewhat stunning: It’s estimated that during every day of 2016, over 5 million new IoT devices get connected, and by 2020 there will already be 20.8 billion such devices in operation. By 2025, the total worldwide value of IoT technology could exceed 6.2 trillion dollars, from “smart dust” to robotic manufacturing equipment to wearable health technology. New businesses are starting up every day, eager to participate in this exploding market.
Artificial Intelligence (AI)
The last item in the triad of technologies behind the digital transformation, AI is creating new algorithms for shaping and working with data. More and more workers will make decisions based on conclusions provided by AI technology, decreasing the cost of production. Automated assistance technologies will factor into digital transformation by providing options within a company as well as between the company and its clients or consumers.
It’s inevitable that your business will undergo a digital transformation, and the sooner you move forward with your own planning and initiative, the better position you can claim in your industry. Digital strategy consulting can help you determine the order and priorities that form the most effective pathway for your organization.