Companies had embarked on digital transformation long before COVID-19, but the global pandemic formed the ultimate imperative for them to reconfigure and transform operations. When everyone across every industry and vertical was forced inside, businesses around the world, albeit reluctantly in some cases, had to transition to new ways of working way faster than they thought possible, to accommodate the limitations of a digital environment.
In 2021, businesses are still being managed remotely and their workforce is still dispersed across locations, but with nearly 90% of operational costs reduced, organizations seem determined to redirect those cost savings approaching digital transformation more strategically and ensuring its sustainability over time.
Here are 6 digital transformation trends that may play a role in the decision-making for enterprises everywhere.
The future of work is hybrid
The workplace is no longer considered a location. Although remote work and digital nomadism were popular even before the pandemic, they were seen more as a luxury and less as a necessity, let alone a shared reality between businesses everywhere.
We already know that COVID-19 has fundamentally changed the world of work, but the Economist Impact's global survey (October 2021), commissioned by Google Workspace, emphasizes the scale, reach, and longevity of those changes. Given that 70% of respondents said they never worked remotely before the pandemic, over 75% of respondents believe that hybrid/flexible work will be the future for their organizations in the coming three years.
Additionally, ServiceNow research shows that nearly 90% of respondents found remote work to be an improvement. Harvard Business Review cites that in the short-term the lockdown helped employees to be more productive, as they were spending less time in large meetings, and allocating more resources to interacting with customers and partners. And McKinsey believes that more than 20% of the workforce – consisting mainly of those in high-skilled roles – could work away from the office without almost any impact on their productivity.
So it’s clear that hybrid has become the dominant model for work and that it’s here to stay. With that being said, this shift has also changed employee expectations, so leaders will have to find different ways to stay connected with team members, mitigating the effects of change and helping them go through a new set of challenges.
However, to build a hybrid workplace, where people do not notice any difference between being in the office or working from home, companies should stop thinking only about one-off investments in digital tools. Instead, they need to create a frictionless working environment enabled by an array of digital initiatives in which MuleSoft envisions automation and business technologists will play a crucial role.
"As many organizations shift to a long-term hybrid workforce model, cloud-based, personal and team productivity technologies, along with collaboration tools, will form the core of a series of new work hubs that meet the requirements of various remote and hybrid workers."
Christopher Trueman, Principal research analyst at Gartner.
Increased investment in machine learning and AI
Businesses produce an outstanding volume of data with a staggering daily velocity. A common claim is that, despite the various options they have for data analytics, over 90% of this data is left unstructured, and only between 1 and 3% is used. This poses a problem for sustaining the effects of digital transformation, as managing, regulating, and mining data for insights are intricate to making data-based decisions, overseeing challenges in advance, and efficiently solving business problems.
In a world of rapid change, a variety of factors, experiences, and biases can influence accurate decision-making – and CIOs no longer view AI as experimental. But according to Gartner, just the adoption of AI solutions within a company will not help, as organizations need to optimize AI to better encompass available data insights.
To standardize AI engineering practices that capture business value, companies are expected to continue investing in new Machine Learning (ML) and Artificial Intelligence (AI) technologies that would be seamlessly integrated into infrastructures, frameworks, applications, and services to supercharge and automate data processing and insights.
“Decision intelligence will improve organizational decision making by modeling decisions through a framework. Fusion teams can manage, evaluate, and improve decisions based on learnings and feedback. Integrating data, analytics and AI allows the creation of decision intelligence platforms to support, augment and automate decisions.”
Report: Gartner Top Strategic Technology Trends for 2022
Smarter chatbots are here
Chatbots have been a trend in digital experiences for a couple of years now. However, due to advancements in Machine Learning and AI, combined with companies’ investment focus in these areas, they are getting a lot smarter. With enhanced natural-language processing, chatbots are now becoming better at facilitating conversations, as well as generating better leads and social messaging. Their improved understanding of context and user feedback will allow them to add to customer experiences in various industries, including retail, banking, financial services.
Multi-cloud and Hybrid cloud solutions are on the rise
AI automation may sound great for teams where tedious information processing is present, but if your organization doesn't yet have a cloud storage solution, you may want to look in that direction first.
A fundamental part of creating seamless digital experiences for employees and customers alike is adopting a composable enterprise architecture, which allows businesses to access data, expand their digital capabilities, and ultimately drive innovation faster. So, in this sense, it is not surprising that cloud solutions are put at the forefront of establishing sustainable success in the post-COVID era.
Although both public and private clouds have their own advantages, 92% of companies already have a multi-cloud strategy in place to ensure disaster recovery and business continuity. One of the reasons behind the decision is that it provides companies with autonomy in their cloud processes, such as which applications run in certain cloud environments, which types of data get stored where, and how each of their clouds is secured.
Additionally, a digital transformation trend in the coming years will be the increased use of hybrid cloud solutions, which can blend two or more different types of clouds – be they public, or private, or both. Such deployment is becoming common due to its cost efficiency, scalability, agility, and security. Moreover, MarketsandMarkets estimates the hybrid cloud market will grow to $97.6 billion by 2023, as this type of cloud solution provides economies of scale while simultaneously delivering security to sensitive business information.
Blockchain sees wider use
As a distributed, encrypted database model with the potential to solve many problems around online trust and security, blockchain has been heavily influencing the business world for some time. Since it makes the history of any digital asset unalterable and fully transparent by using decentralization and cryptographic hashing, it creates unprecedented transparency, data security, cost efficiency, and personal privacy.
The term became mainstream as soon as Bitcoin hit the news and challenged the way we perceive money, but its use cases go far beyond cryptocurrencies. As a matter of fact, distributed ledger technology is becoming so influential that it drives digital transformation across whole industries, both private and public.
For instance, blockchain has started to invoke the digitalization and automation of various banking and financial services, by offering a more transparent, increasingly secure, and better open-data management system that can also ensure stakeholders’ confidentiality and secrecy where needed.
Its impact on cross-border payments where using cryptocurrency could bypass intermediaries that accumulate high transaction fees (usually up to 15%) and cause delivery delays (up to 7 business days) is just a small example. Apart from the immediate improvements, blockchain can also enable lower-cost regulation compliance by providing real-time information of unauthenticated data and transaction history.
However, in terms of providing fairness, transparency, and accountability to the public, there are higher expectations towards governments than any other organization. Blockchain technology can easily be applied in the public sector to enhance data transparency and ensure more streamlined and cost-effective operations. Additionally, citizens could benefit from digital-first on-demand services related to digital identity management, personalized healthcare, improved voting procedures, etc.
All in all, blockchain is expected to be a driving force for digital transformation in 2022 and beyond, with its effects felt across all industries and public sectors.
Expanded focus on cybersecurity
The 2020 pandemic catalyzed more than digital transformation. It also accelerated the move of digital assets outside the orthodox enterprise infrastructure. This created a whole new level of challenges, as companies see an increased number of security risks and breach attempts. Security and risk management has already become such a core challenge for both scaling organizations and mature businesses, that it is now a key factor in any strategic business decision. Thus, companies are in need of different security options that are more flexible, scalable, and composable and that will allow them to operate securely in the future.
“We need to make sure that we are evolving our thinking, our philosophy, our program and our architecture.”
Sam Olyaei, Director Analyst, Gartner
Currently, Gartner envisions a new set of cybersecurity predictions that, starting in 2022, will impact digital transformation trends and procedures over the following 3 to 5 years:
- Privacy laws will cover the personal information of 75% of the world’s population, which will push companies to automate their privacy management systems and standardize all security operations, so they can successfully manage multiple data protection requirements under various jurisdictions
- Using a cybersecurity mesh structure will provide a holistic security view of the organization, helping it reduce the financial impact of security incidents by an average of 90%
- Cybersecurity risks will determine business engagements and opportunity assessments for 60% of organizations
- Digital transformation will continue to add more complexity to risk management driving 40% of director boards to form dedicated and directly managed strategic cybersecurity teams
The effects of digital transformation need to be sustained and improved
In the last few years, we have been seeing the rippling effects of continuous change. After being caught off-guard, organizations are now trying to adapt further to current conditions without losing flexibility. Digital transformation has come to the forefront of enterprise success and although these trends will certainly impact organizational decisions, digital transformation can be influenced by so many more factors. You may be tempted to work the latest and greatest technologies into your change plan, but be cautious not to allocate resources to technology your business isn’t ready for, as you risk causing more tension and wasting time and energy on solutions that are not designed to optimize your work.
Do you need more information about navigating through times of change?
Check our Digital Transformation Executive Guide to prime yourself for success!