For decades now, businesses have been adopting digital technologies to improve operational efficiencies and to add value to their services. While changes have been incremental, more industries have slowly integrated digital solutions in various areas within their organizations.
However, the COVID-19 pandemic has thrusted virtually all industries into massive digital transformation. It created a sense of urgency for businesses to meet new consumer demands on digital channels and to enable remote collaboration in hybrid work environments.
How the Pandemic Accelerated Digital Transformation
IBM Institute for Business Value (IBV) surveys conducted from April to August 2020 shows that 59% of organizations accelerated their digital transformation during the height of the pandemic. While this was especially true for essential industries, including manufacturing, distribution, and transportation, retail industries also had to turbocharge their digital initiatives as consumers shifted to digital channels.
When cities worldwide were placed on lockdowns, workplaces closed, affecting business operations in all industries. Logistics also became more complex and caused disruptions in the supply chain. Fears of what lay ahead caused massive spikes in demand for commodities, some of which were in scant supply. Health restrictions limited mobility, which drove consumers to find online channels and alternatives for activities and transactions. All these highlighted the need for organizations to implement solutions for business agility in times of crisis.
Digital transformation was no longer just about streamlining processes and consolidating data within a single system. It was now about seamlessly connecting various systems across the organization, enabling efficient remote collaboration to empower teams, and creating more value for consumers.
A Year Rife with Challenges
Although advanced technologies are now widely available and affordable, many businesses still struggle with adopting and deploying digital strategies. Some are unable to loop solutions due to a disconnect between IT and business management. Some have the erroneous belief that large-scale solutions deliver monumental outcomes. Other factors that cause lags and failures in transformation are misplaced priorities, poor leadership, substandard operations, and lack of strategy.
The massive experimentation on digital transformation has taken a toll on many of the already burdened businesses. Still, modernizing and transforming business processes is crucial to resiliency. Businesses must continuously find ways to expand their tech stack, automate core internal operations, digitize customer services, and implement other digital solutions. This is the only way for them to thrive in an unpredictably evolving business landscape.
Technologies Companies are Using in Their Digital Transformation Strategy
According to an IBM report on digital acceleration, the top technologies driving growth today are mobile, artificial intelligence, and cloud. This is remarkably different from the technologies at the forefront of transformation pre-pandemic which were the internet of things (IoT), mobile, and advanced analytics. Although shifts in priorities changed key drivers, all of these technologies are still essential to digital transformation strategies.
With consumers now using multiple channels and devices to interact with businesses, mobile technologies will continue to be a primary driver for transformation in the next few years. AI technologies complemented by machine learning will be critical for big data governance and predictive analytics. They will be essential for building relationships with consumers. In fact, data shows that 6 out of 10 organizations are utilizing AI to enhance customer satisfaction and improve customer retention.
In 2020, the most significant change businesses made in response to the pandemic was to shift to cloud-based activities. At that time, 64 percent of organizations adopted cloud solutions. Moving forward, cloud technologies will continue to be a critical differentiator for business agility, process efficiency, heightened customer experience, supply chain operations, workforce management, and cybersecurity.
Robotic Process Automation (RPA) will continue to play a role in managing hybrid workforces. However, it is best integrated with Business Process Management (BPM) software for a more holistic approach to automating and optimizing business processes. Used together, the two technologies provide an end-to-end solution for more solid infrastructure.
IoT, edge, and blockchain technologies are emerging technologies that businesses are also exploring more. Some are already leveraging them for predictive sales, real-time insights and analytics, and digital identity management. IoT, in particular, is widely integrated into consumer products and electronics.
A Key Initiative for Business Resiliency
Digital transformation is no longer viewed as a disruption to traditional processes. It is now a fundamental change necessary for business resiliency and growth. As businesses strive to adapt to unpredictable changes in the business landscape, advanced technologies will be vital to developing economically viable business models. Thus, digitization must be a key strategic initiative in their immediate plans.
While it is difficult to foresee what the economic scenario will be post-COVID, successfully implementing digital transformation today can help cushion businesses from future crises. Mobile technology, AI, cloud-based solutions, and IoT connectivity will remain the key drivers for business growth. They will enable businesses to innovate, digitize processes, and make data-driven decisions.