Digital transformation is the buzzword that we humans have been hearing for a long time now. It is just not a trend anymore, but as become a necessity in this tech-driven world. Those who are not adapting to this digital world, are being left behind. With a rich past, a thriving present, and a promising time ahead, the future of digital transformation is worth discussing.
What is Digital Transformation though?
It simply means the adoption and implementation of digital technology by companies or organizations. It is done to streamline operations or create modern products and services.
Starting with the importance, we will talk about the future of digital transformation followed by some of its future trends.
So, fasten your seatbelts as this plane of digital transformation would take a steep flight!
Table of Contents
Importance of Digital Transformation
Digital transformation is not a new concept. It has its roots in Claude E. Shannon’s seminal paper ‘A Mathematical Theory of Communication’, written in 1948. This paper paved the way for digitization as well as digital discoveries.
Businesses ever since have welcomed digital transformation, in the early years as an experiment and later, as a means to thrive. Those who have been lazy or apprehensive about adopting digitalization have paid hefty amounts for it. Some dying silent deaths or vanishing into thin air.
Blockbuster, once a popular video rental store offering VHS tapes or DVDs in the 1990s and early 2000s, was taken over by Netflix, back then a young startup, due to multiple reasons. One of the evident reasons was its inability to pivot quickly in a digital world.
Due to skepticism, Blockbuster did not offer its customers the option to access their favorite movies or games from online platforms as Netflix did. The latter sent the DVDs to its customers via mail, allowing them to receive them with just a few clicks.
It took 6 long years for Blockbuster to realize the power of offering services through digital platforms and launch one of its own. However, till then Netflix had gained a massive number of subscribers. Moreover, when Netflix switched to streaming services in 2007, Blockbuster was again late to the party. And this was the last nail in the coffin.
Blockbuster moved too slowly and as a result, had to exit from the market. Netflix, on the other hand, embraced digitalization. As a result, it is one of the biggest and most lucrative streaming companies in today’s time.
Embracing digital transformation is thus, more a survival practice than a choice, more so after the pandemic.
Some businesses completely shut down their operations during the global pandemic. However, some embraced digital transformation to tackle supply chain disruptions, growing time-to-market pressures, and rapidly changing customer behaviors and expectations.
Benefits of Digital Transformation
Digital transformation allows businesses to streamline internal operations, and better manage external operations. Additionally, it automates labor-intensive and time-consuming tasks, saving time and human resources.
Through digitalization, businesses efficiently manage and track operational progress and offer their customers more timely services and modern goods. It opens up new business opportunities while helping companies maintain their competitive edge and sustained revenue models.
Digital technologies facilitate speed-building, innovation, and agility across operations and processes.
Future of Digital Transformation
Kodak, a pioneer in the field of photography and one of the largest companies, failed due to reluctance to innovate. The company failed to adapt to evolving technologies and market dynamics as digital photography started to dominate in the late 1990s. This ultimately led to its decline from one of the strongest and deep-pocketed brands to merely a surviving company.
Kodak feared that digital photography would cannibalize its existing film business. The mental barriers thus hinder growth, in business and life in general.
To undergo digital transformation, a company must change its mindset first that chooses traditional, legacy systems, manual processes, and management over digital tools and technologies.
Thankfully, a growing number of contemporary as well as traditional businesses are adopting this mentality due to high competition in the marketplace and the myriad of benefits offered by digitalization.
Companies and businesses, irrespective of their size and nature of dealing, are adopting technology and digital solutions for business innovation and growth.
From the use of AR/VR to enhance customer sensory experience, leveraging AI for data analytics, to connecting multiple systems, equipment, and machinery for better coordination across the organization, digital technology solutions have been changing the business landscape.
Thus, more and more businesses are undergoing digital transformation in order to enhance their operations and services. The future would witness a steep increase in this trend and for the good.
Trends of Digital Transformation
Following are the most popular digital transformation trends for the year 2023:
No-code/ low-code is a software development type that has minimal to no code requirements. It aims to reduce the time, effort, and skills required to develop software. Apps could be built using intuitive UI elements instead of manually typing the code.
Its development requires very little technical or coding knowledge and skills. Even with limited training, anyone would be able to develop a software with low probability of errors as these platforms provide some automation features to streamline the process.
No-code/ Low code platforms would thus facilitate custom software development for internal and external business use. The businesses would have a better say and control over their software development process. The platforms would further help fill digital skill gaps that are being felt and reported worldwide.
However, these platforms do put some limitations on the user, especially when one has to develop software with advanced features.
Nonetheless, these platforms still stand a good chance of being increasingly adopted by businesses to fasten their software development process, with less effort and lower costs.
2. Migration To Cloud
Cloud services have seen rapid growth in the past few years, and as a growing number of businesses learn about its benefits, migration to the cloud would be one of the digital transformation trends this year too. Cloud inevitably is a part of the future of digital transformation.
Further, in the near future, the world would be introduced to multi-cloud solutions. It is the approach of utilizing cloud services from different vendors. A business, say, could be using software-as-a-service (SaaS) from two different companies.
This is done to avoid the reliance of a business on one cloud server or provider to eliminate external risks such as overnight price increases, service failure, etc.
For large companies, these solutions refer to running enterprise-grade apps on infrastructure-as-a-service (IaaS) or platform-as-a-service (PaaS) solutions from multiple cloud service providers.
Multi-cloud solutions offer the following benefits:
Mitigation of vendor lock-in; helps with the situation where a company is stuck with an original vendor due to high switching costs
Scalability and flexibility to add resources for specific data segments
Most suitable cloud services for multiple different business requirements
Although cloud services are quite popular in today’s time, the vendor should be meticulously chosen for optimized cloud migration. Additionally, experts should be involved at every step as cloud migration is an investment and delicate process.
3. Artificial Intelligence (AI) and Machine Learning (ML)
AI/ML have a booming industry. Their increased usage has made them become one of the digital transformation trends in 2023. In fact, a BuissnessWire report predicts that the AI market will witness a growth of 52% between 2017 and 2025.
Multiple businesses across various industries are leveraging AI/ML for the collection and storage of customer data, improving the quality of customer services, customer insights, and data analytics to create effective operational, marketing, and revenue strategies, etc.
AI/ML offers organizational efficiency to businesses as well as optimizes workflows while offering 24*7 personalized and reliable customer services. These cost-effective technologies help a business reduce its resource requirements, and expenses. Moreover, the existing labor/employees would have more time to focus on the crucial aspects of the business.
The manufacturing industry, in particular, could witness the growing role of AI/ML in their operations as the same Accenture report predicts that AI-powered technologies have the potential to increase productivity in the manufacturing industry by almost 40% by 2035.
AI/ML support as well as reinforce digital transformation process and practices and thus, play an important role in the future of digital transformation. The time ahead could also witness the introduction and rapid usage of AIoT, that is Artificial Intelligence of Things, an advanced hybrid of AI and the Internet of Things (IoT) technologies.
Cybersecurity is and has been one of the most important and worrisome aspects of digital transformation. As digitalization takes over the world and the complexity of modern IT architecture and cloud dependency increases, so do the hacking incidents as well as cybersecurity breaches.
Businesses have to bear huge losses in cases of data leaks and cyber-attacks. Thus, cybersecurity continues to be the topmost priority of companies adopting digitalization. Therefore, businesses must involve cybersecurity professionals or experts at every digital touchpoint in 2023.
This is especially important while adding new apps or software to the existing business system or IT infrastructure. Latest monitoring systems such as security information and event management (SIEM) and user and entity behavior analytics (UEBA), can support a company’s cybersecurity efforts and create a safe digital environment.
5. Software 2.0
Software 2.0 is a concept that allows developers to create source code automatically from a requirements document. This saves them the time and effort that has gone into creating comprehensive project documentation.
Although this concept is yet to be finalized and come in its application phase, it has the potential, even in its nascent stage, to change how smaller organizations can approach the digitalization process with limited IT and other resources.
The current limitations of high data quality and advanced data analytics requirements are expected to be soon worked out as technology becomes more sophisticated. This is because Software 2 can make digital transformation more accessible, feasible, and attractive for organizations with limited resources.
Blockchain technology is being increasingly utilized by businesses to initiate as well as facilitate their digital transformation journey. In fact, 81 of the top 100 companies are leveraging blockchain for digitalization.
Cryptocurrency, which is a digital currency, has been a buzzword word for quite some time now. This digital currency uses blockchain as a ledger for storing records of crypto transactions. That’s just one popular use of this technology.
Furthermore, allowing businesses to securely collect and store their records, blockchain ensures businesses’ data security and transparency across the company/ organization. Mostly used by financial institutions, blockchain increases the overall trust and accountability in peer-to-peer as well as financial transactions without a middleman required to back it up.
Businesses use this technology to overcome some major workflow hiccups, such as Know Your Customer (KYC), credit reporting, source of funds and ACH transactions, etc., supporting the digitalisation of multiple processes.
Online to offline commerce or O2O commerce has been trending for quite some time now. It is a business model that encourages potential customers to shop or make purchases from offline or physical stores.
Customers are lured through online channels or platforms. Besides making purchases from physical stores, the O2O model also includes the following:
In-store pickup of items purchased online; the big and global fashion brand Zara offers this option
Return of items purchased online at physical stores
Placing online orders while being at a physical store
Amazon purchased Whole Foods Markets in 2017 to leverage the benefits of the physical space business. It even lets customers even let you pay through their Amazon Prime credit card and earn 5% rewards, offering the same benefits as using the card online.
Acquiring companies with an already established customer base is a prominent O2O move or strategy that helps businesses access a wider and loyal audience.
Another strategy is an expansion of services to include home grocery delivery and curbside pickup. This allows retailers to offer comfort and timely services to customers and gain their trust and business. Zomato and Swiggy are some popular examples of this kind of service.
8. Quick Commerce
Quick commerce or q-commerce or the 10-minute delivery model is trending due to its lightning-fast speed of delivery and increased user convenience of grocery, wellness items, and medicine shopping. More and more eCommerce businesses and startups are investing in this model to reap its benefits and capitalize on is rising popularity.
For example, Blinkit and Zepto, both offer quick-commerce services. They claim to deliver groceries and other necessities within 10 minutes of a customer’s order.
This model involves mini-warehouses and limited inventory to ensure fast deliveries. Furthermore, automation facilitates quick commerce.
Intelligent auto allocation delegates delivery tasks to drivers automatically. This delegation is done by factoring in delivery type, rider current order volume, store and customer in the vicinity, and other parameters. Additionally, it also helps companies to scale deliveries by partnering with multiple logistics providers after considering cost, historical data, and other factors.
Further, smart logistics management tools help with driver management and track the progress of their KPIs.
PropTech or property technology refers to all the tools and technologies used in the real estate industry to streamline and optimize the way people deal with property. It transforms the way people research, buy, sell, market, and manage real estate or property.
PropTech is increasingly being adopted by real-estate businesses for its capabilities to help the stakeholders or parties involved manage and enhance real estate transactions from start to finish.
Investment platforms, for example, have been simplifying the matching process of retail or commercial real estate investors and assets. Additionally, property management platforms have been running residential, office, and retail properties.
Similarly, the AR/VR technology in Proptech is used to offer virtual tours, bike rides, staging, etc. AR is further used for real estate marketing, among other things.
BigOhTech helped a client, a leading company in the real-estate business, build its AR/VR- enabled app that allowed homeowners to discover the renovators and get the quote, all on the same platform, streamlining the real-estate businesses processes and deals.
Airbnb is the most popular and lucrative example of a Proptech company that embraced technology and transformed the way people book properties for multiple purposes.
10. AR/VR in Edtech
Augmented Reality (AR) and Virtual Reality (VR) are being increasingly used in the education sector to offer learners an immersive and interactive learning experience. This has helped them visualize concepts that are abstract and understand subjects like never before.
EdTech and especially the AR/VR technology used for educating and training, transforms the way students/learners engage with the content. Edtech makes learning and training more collaborative, targeted, comprehensive, and adaptive.
AI/ML technology in education is helping the sector transform learning and teaching ways and bring a positive impact.
11. Automating Document Verification
Data-rich and document-reliant industries are increasingly using automation to verify crucial documents within seconds and with greater efficiency to enhance customer experience and save vital resources.
Document verification APIs like PAN verification API and the Aadhaar XML generation API facilitate data verification from the uploaded or scanned document. This is done post image data extraction. This is the stage when the request to verify the document’s details is passed.
There are multiple APIs that can be used for document verification. One of the most popular technologies is OCR or optical character recognition which simplifies and fastens the document verification process.
This technology is included as a part of Intelligent Document Processing (IDP), along with other tools and technologies such as ML, NLP (natural language processing), etc. It provides services such as identity verification, data extraction, and entry and facilities efficiency and reduction in verification errors, enhancing the end-user experience.
The future of digital transformation hence has multiple revolutionary technologies and concepts that would facilitate high-quality business. Furthermore, digitalization would ease the business workflows and make products and services offered by it, more personalized and sophisticated.
The digital transformation trends would further allow businesses to achieve efficiency and ease of software development and must be taken seriously by every growing business today.
Because not being able to adapt means lagging behind and eventually vanishing in an ever-evolving business landscape!
Are you feeling stuck or lost in your digital transformation vision or journey? You are certainly not alone!
We come across many businesses and clients who face difficulties while walking the digital transformation road. But that’s what we are here for – to assist you with your digital transformation vision to execution journey.
BigOhTech is a well-known name in the IT and tech industry. We have helped multiple clients such asJio Money, FnP, etc., to develop products that have helped them achieve their digitalization goals.
We also take organizations closer to their digital goals with our staff augmentation, cloud architecture and optimization, and IT consultation services. Our dedicated development team assists clients to offer their customers the best quality software and apps.
So, move fast, move right! Begin your digital transformation journey with BigOh today!