From being merely a boardroom buzzword, the term digital transformation is now a part – and priority – of every business strategy. But with digital transformation still developing and continuing to be a rather alien concept to many businesses, we’re looking at the top 10 digital transformation trends every business should know about. These trends will determine the future of digital transformation.
1. More investments will be made in Digital transformation
According to the IDC, the money spent on digital transformation globally will grow 17.1% per year and reach $2.3 trillion by 2023. The countries and continents investing most in digital transformation will be the US, Europe and China.
The financial sector, including banking, insurance, security and investment, is expected to make the most investments in digital transformation technology. However, the finance industry is closely followed by the robotic manufacturing industry, whose spending is meant to double over the next three years.
2. There’s expected to be a move from B2B to B2B2C
We’ll see a growing number of B2B organisations moving to a B2B2C model (Business-to-Business-to-Customer), offering clients customised experiences and specific products. Customers in the B2B environment will start to expect the same level of customer experience as in the B2C space. Through B2B2C sales B2B enterprises will be able to offer customer experiences that correspond to Amazon standards.
3. IoT will offer several opportunities
According to McKinsey, IoT-connected devices will increase by 43 billion by 2023. The increase being the result of lower sensor technology prices, offers a great opportunity for manufacturers as production flows, as well as supply chains and remote operations will see a boost.
4. The focus will be on people, not technology
You might think that technology is at the centre of digital transformation but it’s more about the people. However, that’s where the problem lies in itself as there is a lack of people with the right skill- and mindset to leverage the potential of digital transformation.
Gartner suggests that 64% of managers believe that the digital future will massively challenge their team. The lack of skills will be one of the main challenges that digital transformation poses to large enterprises.
5. AI will play an essential role in the manufacturing industry
Statistics show that AI and machine learning will play a significant role in the manufacturing industry. The Accenture report suggests that AI will help increase productivity within the manufacturing business by 40%. However, there’s a gap between reality and wishful thinking, with 92% of manufacturers assuming that smart factory technologies will allow them to enhance productivity, but only 12% of manufacturers actually using AI-empowered technology.
6. XaaS will continue to be the top in-house solution
Instead of investing in recruitment and training of current workforces, enterprises will try to use cloud-based applications and services from third-party providers to get jobs done. This approach, called XaaS (Everything as a Service) provides businesses with cost-effective, productivity-enhancing, highly secure, and more flexible and agile capabilities without having to manage on-premise solutions.
7. 5G will drive digital transformation
Although 5G isn’t available just yet, once it has been fully rolled out, it is expected to greatly impact digital transformation, empowering new technologies such as smart cities, vehicles, manufacturing and other internet-connected technology with its unprecedented high-speed connectivity.
8. AI will take over and solve the skill gap problem
According to a survey carried out in 2019, 40% of employers believe that artificial intelligence will be used to overcome the challenge of the lack in skillset. While the costs of a barista for Starbucks lie around $20,000, a robotic barista arm would cost them $25,000, without the need for sick or annual leave pay and the robot operating 24/7. This makes enterprises more likely to choose the robot over an actual barista.
One great example of AI replacing digital experts is Google Brain, an AI research team developing software that can again build machine learning software. Milestones like these take away the need of employing a large number of developers and recruit a smaller team that can primarily concentrate on essential strategic challenges instead of losing valuable time on coding.
9. Reputations will be at stake due to privacy concerns
Every enterprise trying to profit from digital transformation will have to deal with privacy concerns. And 5G and IoT devices will only add to those concerns, increasing the risk of data breaches.
Business of all size will be confronted by public privacy expectations at some point and walk away with their reputations damaged. Investing in cybersecurity as well as communicating the implemented security measures and privacy policies to customers will give businesses a competitive advantage.
10. Digital Transformation will follow a more pragmatic approach
Many enterprises believe that investing in hot new technology will make them more innovative. However, they don’t consider the implications this initiative – rather being a digital change than a digital transformation – can have on their bottom line and whether this money is actually well-invested.
That’s why CIOs go back to developing concepts and strategies that are based off strong foundations and focus on achieving business objectives rather than using fancy new technology.
Is your business keeping pace with digital transformation?
With brand-new technologies continuously emerging, it can be hard stay on top of things and keep a competitive edge. Intergence can help you take the first steps towards digital growth by staying up to date, forward-thinking and ready for anything. Get in touch today to speak to one of our digital transformation experts.