Despite the fact that digitization is slowly becoming an integral part of any business, there are still companies that have yet to come up with a clear outline for digital strategy. According to research company Forrester, there are only more or less 27% of businesses with a good digital plan. However, technology researcher Gartner Inc. reported that over 120,000 large companies are set to launch their digital business initiatives soon.
Additionally, by the year 2020, an increase of almost 50% in the number of companies embracing digital transformation is expected. All these are indications that digitization is slowly but steadily changing the business landscape.
The Impact of Digital Transformation
The impact of digital transformation is strong, so much so that businesses that do not integrate digitization into their system will find it hard to be competitive in the next decade. Ultimately, tasks that were in-demand in 2015 and 2016 will no longer be needed. In 2025, telemarketers, private bankers, statisticians, lawyers, and even military personnel will all be replaced by their digitized versions.
Artificial intelligence or AI will take the place of telemarketers, statisticians and lawyers. Algorithms will replace private bankers, while robots will substitute military personnel. As a result, traditional businesses will have a difficult time adjusting, thus reducing their relevance in the new digitized industry.
Digital transformation is taking shape before our eyes. Alibaba and Uber are just two of the many digitized business models. A Chinese ride-sharing service, which is somewhat similar to Uber, is making waves in Beijing. Didi Kuaidi has grown from a company serving 3 million in July of 2015 to one that caters to 7 million riders at the end of 2015. It is now worth $16.5 billion.
This is why many of the companies currently aiming for a strong market presence are doing their best to understand digitization, so they can then develop strategies that can be used for digital transformation. Along with this, businesses are also formulating ways to transform their products and services to ensure that they adapt to the digitization of the industry. Digital service products are expected to rise in number several years from now. Even small and medium businesses and startups have embraced the digital platform business model.
Relevance of Digital Transformation in the Next Decade
By the year 2025, businesses will be affected by the constant increase of connected devices. This will affect the employers’ options in terms of hiring and other similar aspects. And, of course, this will likewise change the employee’s work choices. Some will prefer to work part-time, while others will want to work remotely, or on telecommute basis. People will be given the opportunity to work wherever, whenever they want to. Although this is already happening now, particularly in the BPO (Business Process Outsourcing) industry, it will become the new standard in the next decade.
In relation to this, hiring initiatives will also change. More companies will prefer to hire employees for software development, which by then will have a greater role to play in the overall operations of the business. Skills that are considered specialized nowadays will be the norm, with analytics and mobile app development on top of the list.
Before the year 2025 enters, IT investments will shift and the focus will be on digital transformation. Businesses will allot more or less 35% of their IT budget for this. This number will increase to 50% in two years’ time. As a result, greater concentration, in financial terms, will be given to security matters.
As previously stated, AI and other digital technologies will take the place of workers. Popular careers will include Artificial Intelligence technology and automation salesperson, robot and automation technology manufacturer, specialist programmers, virtual reality experience designer, technology-specific trainer, and engineering psychologists, among others. Other jobs, particularly the ones that require human interaction, will embrace digital mechanisms.
All these signify the value of digital transformation in the coming years, and more importantly, in the next decade. It is high time that businesses consider a new and solid digital platform if their intention is to stay in the race and become a significant presence.
Opportunities for Companies Adapting Digital Transformation
Several opportunities will open up once a company decides to embrace digital transformation:
- Productivity growth. One of the many results of digitization is increased efficiency. And once greater efficiency is achieved, productivity will improve. This will then result to more profit and a brighter future for the company.
- Optimized customer experience. Cognitive computing will help analyze data that can result to companies understanding their customers better. As a result, businesses will be able to formulate strategies that will optimize customer experience. This will likewise help drive an increase in productivity and profit. Additionally, services will be more personalized. This is possible because digital technology can cater to customers’ individualized needs. For example, a health company that uses a mobile app to gather data about their clients or patients can provide them the service or help they need. A perfect example of this is Ginger.io, which uses artificial intelligence in helping people with depression, anxiety, bipolar disorder, and schizophrenia, among others.
- Integration of services. A digitized business will be capable of integrating services that can be used to improve operations and offer the best services to customers. Most businesses will then be able to offer a comprehensive service package to their clienteles.
For a company to remain valuable in the next decade, it has to have a digital strategy with a strong and reliable digital workforce. At the rate things are going, digital transformation is not just a trend; it is a need. And the time to start the transformation is now, before everything becomes digitized.
To end, allow me to leave you with a quote from digitaltransformationbook.com: “Digital transformation is a journey for the entire company. It’s no longer just about marketing transformation, it’s about business transformation. We’re entering a new phase where all internal stakeholders are involved.”
Photo courtesy of Bryan Mathers.