Digital transformation is all the rage in the latest tech news and business owners live by it. However, ask 10 CIOs the definition of what exactly digital transformation is and you’d likely get 10 different answers. Here are a few obvious ones; Mobile. Cloud. Big Data. Difficult. Exciting. Scary. We’re behind. We’re getting there. What’s digital transformation?
The common understanding of digital transformation is, “a combination of technology projects, which focus on fostering business changes”. While this may be true to an extend, can digital transformation really be defined by just this?
What is Digital Transformation?
Digital transformation involves a radical rethinking of how an organization uses technology in pursuit of new revenue streams or new business models. And it also requires cross-departmental collaboration in pairing business-focused philosophies with rapid application development models. But for many organizations, digital transformation is really digital optimization in disguise, as new digital initiatives merely augment existing services.
Like many new additions to the never-ending strategies, many struggle to find what exactly digital transformation is, and in turn resort to the old-age, “they know if when they see it!”
The principal research scientist with MIT Sloan Initiative on the Digital Economy, George Westerman, is one of the few who actually know digital transformation when he sees it. “Digital transformation is when companies use technology to radically change the performance or reach of an enterprise,” says Westerman. The drivers tend to be disruption from market newcomers or innovation from rivals seizing the opportunity to win new customers.
“Customer expectations are far exceeding what you can really do,” says Westerman. “Boundaries between office and work and customer and supplier are also morphing. That means a fundamental rethinking about what we do with technology in organizations.”
Embracing that broad definition, CIOs can claim the creation of anything from corporate mobile applications that boost employee productivity to customer-facing tools such as chat-bots and e-commerce websites are part of a digital transformation.
But most CIOs have been doing some or even all of these projects for years. Isn’t digital transformation essentially the modern version of IT?
Yes, but with some modifications. Westerman says that CIOs once worked on one or two big revolutionary IT projects at a time. But CIOs are no longer bound to their corporate versions of Chutes and Ladders. Cloud and mobile technologies have helped them break free from the data center and desktops. The falling cost of compute, storage and bandwidth have also facilitated the rise of social, analytics, artificial intelligence and internet of things (IoT) technologies. CIOs today rarely worry about technology limitations; they worry about what to eliminate from their massive menus.
This, is a much more complicated problem to solve than grasping and utilizing the potential of digital transformation. CIOs are spoiled for choice and often want to implement everything, not realized how it could negatively impact their business.
Digital Transformation Around You
A recent Frost & Sullivan survey looking at end-user perspectives on navigating digital transformation globally, found that improving digital presence will be a top driver for IT investment over the next two years. Other broad goals respondents have for their organizations include reducing operational costs, improving the customer experience, and aligning IT with business strategy. These are just naming a few among the many upcoming trends, objectives and predictions.
Here are a couple of upcoming trends that are sure to climb the ladder and reign this year, and a few leading trends that have completed their tenure.
Digital Transformation Trends on the Rise
#1. Location Services
Predicted to be one of the top and most preferred digital transformations this year, location services help “remove friction” and engage with customers wherever they are. Which is of utmost important to Dr. Shez Partovi, Chief Digital Officer and Senior Vice President of digital transformation at Dignity Health.
Having launched its digital transformation in 2016, Dignity Health is probably one of the few who are using location services to its full potential. They have already started with ‘telehealth’ which allows users to find a physician, book an appointment and conduct ‘video visits’ via an app. For this year, they are set to launch pre-registering for check-in to a clinic or pre-admission hospital.
To solve the problem of patients and their families being unable to find parking spaces at clinics or hospitals, Partovi plans to create a mobile-based solution. “Geolocation (can) enhance the experience,” says Partovi, who explained how visitors’ phones can interact with beacons that are positioned in hospital car parks. When the patients arrive, the beacons send a notification to their phone that reveals the number and location of spare parking spaces.
Another leader in health care and digital transformation, Alpa Shah, Global Vice President of digital transformation at Frost & Sullivan says, “Reducing costs while improving customer care is critical; meeting customers when, where, and how they need it “may be the only way to keep healthcare organizations competitive in the near future. The ease of video conferencing, the ability to receive text message updates on appointments or medication reminders, and the growth of wearable devices all make healthcare a leading industry in digital transformation.”
#2. Block-Chain Technology
According to Forbes contributor Daniel Newman, blockchain technology “may finally find its place in 2018”. Newman cites the predictions of tech site Datamation that blockchain may underpin up to 20 percent of global trade finance by 2020. The trend is best illustrated by the payments company Ripple Inc. As Ripple continues to build relationships with major banks for handling cross-border payments, it is clear that many companies are eyeing blockchain technology with keen interest.
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In a recent CIO article, Chris Rothstein, CEO of sales platform company Groove was quoted as predicting that smart contracts “will gain in popularity in the coming years”. Rothstein cited smart contracts as a key driver of growth that he expects to continue in the foreseeable future. Although cryptocurrencies such as Ethereum and Bitcoin continue to grab most of the headlines, Fortune 5000 companies are showing a real interest in using smart contracts to help do business. As distributed ledger technology (DLT) offer immutability, it can reduce the complexity and cost of making cross-border payments.
In a recent interview, CIO contributor Esther Shien asked Bob Amareld, associate director of strategic operations and technology for global procurement at Biogen, about the potential of blockchain technology. According to Amareld, Biogen’s procurement group uses an ERP system that has up to 10 different data hubs. Unable to manually link this data, Amareld envisions blockchain as a way of simplifying this process.
As outlined by Amaerld, DLT-based solutions could help pick out data from various sources and help a procurement specialist to complete orders faster. Future start-ups could specialize in developing blockchain scripts that can compile information from a number of different hubs. This is one of the top digital transformation trends that Amaerld foresees happening over the next couple of years.
#3. Cloud Infrastructure with ‘Atomic Pricing’
Major cloud infrastructure provides such as Google and Microsoft Azure are racing towards atomic pricing, meaning that firms only pay for what they use. This is one of the top digital transformation trends in 2018, according to Digital Health’s CDO and Senior VP Shez Partovi. Whereas cloud storage firms previously had quite ridged pricing models, their new ‘atomic’ pricing structures are now flexible down to the second. Firms can rent storage and bandwidth according to their precise needs.
This pay-per-second basis is known as ‘atomic pricing’ and will undoubtedly fuel the ability of businesses to meet higher demands in the future. As reported by Esther Shien, Dignity Health’s cloud platform can automatically scale when it receives increased demand such as during flu season. Shien quoted Partovi as explaining that scalable cloud infrastructure means that ‘investment goes further’ due to atomic pricing models. Instead of purchasing legacy infrastructure, firms can free up capital and rent cloud infrastructure to meet their needs.
#4. Interactive Voice
Alexa, Amazon’s raving success, has proved that voice interaction is of great value. Moreover, other leaders, which include Apple, Microsoft and Google have competing voice technologies. An IVR system is perfect for businesses that deal with high call volumes. It is a good way to cut down costs and call processing time. It also improves the caller’s experience.
Because it patches into your databases, queries can be attended without human intervention. An example is when you call your credit card provider to inquire about your payment. Unless you have billing issues, basic queries can be handled by the IVR system.
The voice response system can also gather relevant information prior to call routing. Callers can be authenticated, their location identified and their calls segmented accordingly. This results in better-handled calls. Information is readily available to agents. Callers are classified according to their concerns; and their issues are handled by qualified agents.
#5. AI and Machine Learning
Both CIO contributor Esther Shien and Forbes contributor Daniel Newman identified 2018 as the year when artificial intelligence (AI) and machine learning (ML) will go mainstream. Newman points to the widespread adoption of AI-powered virtual assistants such as Alexia and Apple’s Siri as evidence that AI is helping to improve customer service. For example, IBM’s cloud streaming service uses IBM’s supercomputer Watson to automatically generate subtitles and captions for videos as they stream.
Shien interviewed SenecaGlobal’s CEO Ed Szofer about the impact that AI is having on the way that people interact with each other. Szofer identified the move “from large central processing” towards smaller, local devices that are part of the Internet of Things (IoT). AI can power a whole variety of tasks such as facial recognition and threat detection in a streamlined, efficient way.
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Digital Transformation Trends on the Fall
#1. Multiple Collaboration Tools
During a recent interview, Nintex’s VP of workflow technology Mike Fitzmaurice suggested that the trend of having multiple collaboration tools was cooling off. According to Fitzmaurice, the market has reached saturation point, with multiple services competing for the same customers. Any given office could have a wide range of tools, from Microsoft Teams, to LinkedIn communities and Slack groups. As outlined by Fitzmaurice, their days are numbered.
Fitzmaurice predicts that people will either abandon all of these services and return to email or that companies will pick the winners and invest in them heavily. The trend in having multiple collaboration tools will likely cool down in 2018 due to the rise of cloud-driven digital identities, as predicted by Digital Health’s Shez Partovi. Companies such as Google and Microsoft will invest in collaboration software and tools in order to attract people over to their platforms. Kyle Hutchins agrees with this assessment, confirming that there will be a “focus on consolidation, connectivity, and optimisation” instead of new technologies being developed.
#2. Cloud-first strategies
According to Bill Mayo, CIO of Broad Institute, the cloud-first strategy has “come and gone”. The approach of moving infrastructure and resources to the cloud doesn’t necessarily work for everyone. What was once a binary choice between on-premises or cloud-based environments is now significantly blurred. Opinions on the merits and disadvantages of cloud-based approaches are now far less polarized than they once were.
Mayo believes that there needs to be a balance between cost, speed, security and flexibility. He believes that cloud-first strategies are no longer appropriate and that both approaches should be considered, depending on the circumstances.
#3. In-House IoT Platforms
According to the Frost & Sullivan survey referenced earlier, successful implementation of the Internet of Things (IoT) is a “top priority” for all major industrial sectors. Matthew Mead, CTO of SPR, revealed during a recent interview that in-house IoT platforms are increasingly being replaced with ready-to-use IoT alternatives. These enable companies to push their solutions to the market quicker and more cheaply. Frost & Sullivan’s survey data indicates that over a third of respondents are embedding IoT into their core services or products. Therefore, developing in-house IoT solutions is a trend that is likely to cool down this year.
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