Technological change now dominates business thinking in all industries. This is because it’s about survival of the fittest – customer expectations have evolved so much that businesses need every edge to secure growth, improve products and services, and increase efficiency.
Virtually every business in every industry is feeling the effects of digital transformation. Even if a business doesn’t have its own initiative, its competition likely does. Digital transformation is a complete reimagining of how businesses work, enabled by the transformative technology of today, such the cloud, mobile, and big data.
According to a 2017 study from Forrester, 38% of business and IT decision-makers believe that technological change such as digital transformation would have the greatest effect on their business decisions over the next 12 months. Digital transformation can provide an opportunity to rewrite the rules of business.
Digital transformation is happening. Last year’s BT Software Survey said that 83% of companies were making back-office technology investments a high or moderate priority.
Digital allows your business to shorten the distance between what your company wants and what it gets.
Business should invest in systems of insight
Many businesses are drowning in data and starving for insight. Leaders need to make sure their businesses are:
- Discovering the insights that matter most;
- Embedding them into the software customers and employees use to engage; and
- Continuously learning and measuring through results.
Forrester calls what’s needed to power digital businesses ‘systems of insight’. This is equal parts people, process, and technology.
- Small, cross-functional insights teams. These will need to be sponsored by a leader with accountability for a business income. They will combine business domain expertise, data science skills, engineering insights, and software development knowhow, all with the aim of finding, testing, and implementing insights.
- Repeatable insight-to-execution processes. This means an integration of data science, collaboration, governance, and agile implementation methods. Without a repeatable process, it’s not a system, but rather a time-consuming search for minimal insights.
- A digital insights architecture. Big data management and agile business intelligence systems include insight delivery engines and data feed management capabilities, providing insight discovery, collaboration and governance tools.
Predictive analytics will power the insights to drive businesses forward. According to last year’s PwC Global Data and Analytics survey, 81% of businesses use or are building predictive systems today or plan to in the next 12 months (22%)Benefits for businesses include:
- Improved customer experience,
- Increased revenue,
- Reduced operational costs,
- Increased business agility,
- Better-informed business decisions,
- Deeper insights from existing data, and
- An ability to drive new revenue streams with data and intelligence services.
Artificial intelligence in the enterprise
Demand by businesses for productivity-boosting technology is pushing enterprise software vendors to introduce AI into their products. Gartner analysts believe that, by 2020, AI technology will be pervasive in every new product and service.Artificial intelligence will ignite the insights and actions of the future. PwC said last year that 71% of businesses use AI today (51%) or plan to in the next 12 months (20%). Businesses said they were currently using AI to:
- Mitigate security risks,
- Improve business automation,
- Gain better customer insight,
- Improve efficiency in business operations, and
- Create and deliver better customer experiences.
Digital transformation requires business ecosystems
One of the most important steps in the digital transformation strategy of any business is to establish a digital ecosystem. This will help them interact and share standardised digital platforms and benefits, with goals being commercial gain and innovation. Digital ecosystems allow businesses to interact with customers, partners and even competition in different industries. Finding digital transformation leaders can be a great way for businesses to collaborate, find co-innovation partners and create a digital strategy that meets their needs. They might also find that customers want to partner as well as buy from them, bringing their own needs to the table and creating chances to fast-track the innovation process and create solutions for their industry.
But there are challenges, including:
A lack of executive understanding
Digital transformation requires a top-down approach, driven by leadership that has created a framework for success. This needs commitment, and an understanding of how technology can improve the business. Whether this is data, artificial intelligence or automation, businesses must seek out training or new technical blood to fill the knowledge gap.
Data without context
A lack of ownership for customer outcomes
A multi-pronged approach to digital transformation
For successful digital transformation, businesses must take a multi-pronged approach:
Assess digital maturity and identify gaps
Build the relationship between business and IT to focus on customer outcomes
Plot a two-path roadmap – quick wins and platform investments
Invest in core systems with a clear ROI
OnDemand Forrester Webinar – Digital rewrites the rules of business
Understand the new rules of business, explore how insights fuel agility and see the impact of digital in your industry. Get valuable advice from our webinar.