Digital transformation was one of the most talked about – one might even say overused – terms of 2017, but it would be a mistake to dismiss the concept as just another buzzword. The potential benefits of digital transformation are very real for organizations that can leverage the power of the host of new technologies to redefine their own processes and their customer relationships.
Digital transformation is being enabled by a combination of five major technology trends.
Big data and analytics makes it possible for organizations to better understand their business environment, their customers and their own operations by making large volumes of data understandable and actionable.
Mobility provides a new way to deliver the results of these insights to customers, employees and business partners, whenever and wherever they need.
Social media makes it simple and inexpensive to publish information globally and to engage with business constituents in real-time conversations.
The internet of things (IoT) captures and transmits data from devices without the need for human attendants. Analytics tools can be applied to turn this raw data into insights about everything from the health of factory equipment to developing traffic jams on the highway. .
Cloud computing is the connective tissue of digital transformation. Cloud infrastructure combines affordable and infinite scalability with access to world-class computing resources. Cloud applications and data services make capabilities and information that were once the realm of the world’s largest enterprises accessible to anybody on a low-cost subscription basis.
Each of these innovations is revolutionary in its own right, but the power of digital transformation comes when they’re combined. Consider Waze, Google’s enormously popular navigation app. It uses a combination of all of these breakthrough technologies to get users to their destinations faster, warn them of delays or obstructions and connect them with others on the road. Waze is revolutionizing how we get from here to there, creating a new business model in the process.
Digital transformation is about finding opportunity through the use of data. This can take the form of new lines of business or better operational efficiency. In many cases, the data has always been there, but cloud and mobility create new ways to use and deliver it.
One way digital transformation creates value is by exposing useful information and services to customers. For example, owners of truck fleets can use IoT sensors to track the vehicles that they lease to their customers and apply analytics to suggest more optimal routes. Banks can easily integrate services from third parties into their web and mobile applications to offer customers features like credit card tracking or crowdsourced funding. Retailers can notify customers of sales on products that they’ve purchased in the past and dispense digital coupons to their mobile devices. Businesses may either charge for these services or deliver them as an added value to enhance customer relationships.
Another form of digital transformation is internal performance improvement. For example, sales people on the road can pull custom reports and contracts for their customers on the spot from a cloud service. Sensors in a building can automatically adjust lighting and temperature based upon actual usage. Businesses with large mobile service operations can dynamically update and reroute technicians while they’re on the road.
As cloud computing matures and becomes more fluid, organizations will mix public, private and hybrid clouds to better control and manage the information they expose and to seamlessly migrate workloads between cloud platforms. Best-in-class organizations will adopt all three cloud models to make their IT operations virtual and able to follow the sun.
Personalize and Modernize
Here are some guidelines to keep in mind as you embark.
Digital transformation isn’t a technology strategy. It begins with people and processes. Think of the areas of your business where lack of information inhibits your decision-making or challenges your efficiency. Consider how new sources of data might be applied to help. This information may be available from the cloud, IoT devices or mobile apps. It may even be within your own four walls, waiting to be unlocked through analytics.
Think about the edge. The greatest opportunities for change often come from empowering customers or individual employees. What information would help field sales representatives to close deals more quickly? What information could be provided to customers on a self-serve basis? How could call center representatives provide a more personalized experience to customers? Those are your areas of greatest leverage.
Get everyone involved. Leadership support is essential, but the people who are best equipped to identify areas for improvement are often those on the front lines. Provide digital transformation workshops and set up working groups focused on different functional and customer-facing operations. Employees will enjoy the ideation process and take ownership more willingly if they’re part of the process.
Modernize infrastructure. Agile development based upon microservices, containers and DevOps is revolutionizing the way organizations build and deploy applications. Development life cycles are being cut from months to days, and more-frequent release cycles enable continuous delivery of new innovations. Most legacy infrastructure is ill-suited for this highly virtualized and flexible paradigm. Organizations need to move to software defined infrastructure to take full advantage of the new platforms that underlie digital transformation.
A KPMG study of 400 CEOs reported that “rapidly evolving technology, and the speed of transformation it unleashes, are making the next three years more critical for their industry than the previous 50.” Digital transformation needs to be on your radar. An experienced partner can help you find your way.