Your traditional business uses a model that’s worked well for many decades, but effectively competing in a rapidly changing business ecosystem requires digital transformation.
The business ecosystem is changing at a rapid pace, shifting the economics and practices of traditional business. Innovative infrastructures aren’t just for bleeding-edge tech companies anymore. Cloud computing, mobile technology, advanced data analytics and artificial intelligence are making their way into the mainstream.
IDC’s chief analyst Frank Gens says “Mainstream companies in every industry are realizing they’ll be disrupted if they don’t get moving now.” If you don’t have a digital transformation strategy in place for 2016, you’re going to lag behind your competitors. Here are the four key areas to address for your digital strategy:
New Technology Spending
Outdated hardware and software decrease operational efficiency, potentially increase IT security concerns, and are unable to adapt to changing workforce requirements. As the millennial and the following generation make their way into the workforce, they bring a high level of tech-savviness. These workers are accustomed to using technology and adapt quickly to digital heavy environments.
By 2017, more than 50 percent of IT spending will be focused on new technologies such as mobile, the cloud, big data, the Internet of Things and other innovations. Digital transformation consulting can help you identify how to adapt new technology into your traditional business infrastructure to improve everything from your productivity to your competitive positioning.
Line of Business Executives Increases Control of IT Spending
Technological innovations, particularly in the cloud, have streamlined the procurement and deployment process. Due to this shift, Line of Business executives have greater control over IT spending. Instead of relying on the IT department to handle everything relating to technology spending, LOB executives can do more on their own.
By 2018, 45 percent of global IT spending will be controlled by LOB executives, increasing to 60 percent when you look at the U.S. on its own. LOB executives gain a major benefit when they are empowered to handle their own technology needs without involving IT more than necessary. They choose solutions that solve the problems they’re having, instead of someone without intimate knowledge of their pain points and needs.
The IT department also benefits from digital transformation by avoiding lengthy, productivity-decreasing deployments. They can use the extra time to improve IT security and maintenance, and focus on other high value tasks.
IT Budgets Tied to Digital Transformation Initiatives
Digital transformation initiatives will be critically important to business success in the next few years. By 2020, almost 50 percent of IT budgets will be allocated into DX initiatives. This investment allows you to leverage new technology for your competitive advantage. These initiatives take on everything from your back-office operations to your customer touch points, changing your traditional business model into one that effectively uses digital strategy to create key differentiators.
Digital transformation lets you completely transform the user experience in traditional business. You change the way you build business relationships and create new products and services based on the technology you have on hand.
Lowering Cost of Digital Technologies
Digital transformation is also becoming more accessible for businesses due to the lowering cost of digital technologies. Instead of spending millions on an on-premises ERP system designed to last 10 years, but being functionally obsolete in half that time, you have access to cloud computing, mobile technology, data analytics and artificial intelligence at scalable costs. This flexibility makes it easier for you to find your footing as you transition from traditional business practices. A digital transformation agency can identify the right technology to include in a complete business transformation.
These projected 2016 digital trends boil down to one key fact: change is coming. If companies with traditional business models don’t jump on their digital strategy now, then it will be an uphill battle just to catch up with competitors. The good news is that, at the moment, it is more cost effective to incorporate tech innovations into your traditional business model than to keep status quo continuing. The time for change is now.