WHAT IS DRIVING COMPANIES TOWARD DIGITAL TRANSFORMATION
Digital transformation is the single biggest trend in business today. Already, 80 per cent of companies have undertaken some form of digital transformation in the past five years (McKinsey) and this will continue in the months and years to come.
But what is driving this digitalization wave? What are companies seeking to achieve?
There are a number of forces behind this trend:
Innovation and disruption
We have seen many high-tech players enter all kinds of markets and completely revolutionize them: from TV on demand and music streaming to price comparison sites and even taxi travel.
Companies with an eye on innovation are investing in the latest technologies – the Internet of Things, artificial intelligence, automation and Blockchain – to drive the next revolution in their industry sector.
Yet according to our latest international survey which explored digital transformation in some depth, this is the driver behind just 7 per cent of transformation projects. This is partly because these innovations are often led by new, start-up companies, and partly because pursuing a new business direction can be expensive and risky.
Companies often initiate new projects and initiatives to respond to competitive activity. The rapid pace of change in business today means that organizations are very sensitive to being left behind.
So, a move from your key competitor will often inspire a rapid project to regain ground and avoid the loss of market share. It is important to plan the strategy carefully, however, with clear rationale and objectives. A knee-jerk implementation rarely delivers long-term gains.
Our survey revealed that this was the biggest driver of transformation, at 60 per cent of all respondents. Companies are seeking to exploit the latest technology to become the best they can in terms of operational performance.
This may involve automation or AI to manage basic decision making, freeing up staff to work on more complex operational issues. Blockchain is tipped to deliver efficient and transparent processing for all kinds of business operations. Meanwhile the internet of things offers enormous potential in understanding stock locations, customer behaviour and more.
We have all seen how technology simplifies our lives and speeds up all kinds of activity. There are many gains to be made in business.
Many analysts say that data is now more valuable than oil or gold. Most forward-thinking companies are now employing data scientists to ensure that they are generating and analysing the data that will deliver the best organizational advantages.
Data pervades every single organizational function – helping us understand performance trends among our employees, analysing the efficiency of buildings, machinery or processes, and giving us insights into how our customers choose, use and feel about our products.
Data processing capabilities are already prodigious and will only accelerate. Data is the core of future business success, and so many transformation initiatives are focused on harnessing this potential.
Ways of working
It’s surprising how many companies still rely on huge amounts of paperwork and manual processing. Even those that have adopted digital methods have found that different systems are unable to share information between them.
Tomorrow’s businesses are fully digitally enabled, with all systems integrated and working to common standards. For example, an engineer should be able share a digital design with an architect, contractor and government stakeholder instantly. But in many cases different systems don’t currently support this approach.
Increasingly, different types or organization need to collaborate, and must establish a clear approach to make this work efficiently. But first companies must establish effective internal approaches to create lean and effective ways of working.
X-PM enables organizations all over the globe to design and implement the right digital transformation initiatives. Contact us today to see how we can help.