The need for digital transformation in business skyrocketed within weeks of the world experiencing one of the most unprecedented health crises earlier this year. The COVID-19 pandemic propelled some of the emerging digital technologies predicted for 2020 into a business necessity as businesses re-strategized and underwent a hard reset and finally upgraded legacy software.
And as we near the end of a long, eventful year, an important question being discussed is: what’s in store for 2021?
Here is a quick look at 6 digital transformation trends that we believe will make their presence felt in the coming year:
I. Everything-as-a-Service (XaaS)
Today, it is believed that everything is serviceable through the internet, where companies are no longer selling products but the outputs of their products. Internet of Things (IoT) and Artificial Intelligence (AI), among others, will play a pivotal role in developing these services, or augmenting existing services to achieve the digital-native status quo. Through cloudification of everything,XaaS can increase financial efficiencies by reducing investment costs in multiple software programs as well as setting up and operating expensive on-premise server and storage equipment. With pay-per-use price models, it offers scalability to businesses in customizing their technology environments as per the rapid changes in their employee and customer needs. Research shows that the global market size for XaaS was valued at $117.25 billion in 2019 and is expected to grow at a CAGR of 25% to reach $72.46 billion by 2027[1].
II. Redefining Customer Experience (CX)
Customer Experience has risen among the ranks as a critical parameter of business success. Thus, there is a growing need for digital transformation in this space. Companies are therefore investing in modern applications, mobile apps with improved UX, AI-based chatbots, wearables, and immersive experiences that leverage augmented reality. Recent research[2] shows that organizations earning $1 billion annually can potentially earn, on average, an additional $700 million within 3 years of investing in customer experience.
III. Cybersecurity
Technologies comes with loopholes that need to be identified and eliminated to ensure that the integration within the business framework is secure. The initial four months of 2020 saw an alarming increase in cyber-attacks, with a 238% rise in attacks on banks, and a 600% increase on cloud servers[3]. With fewer employees working onsite on secure corporate network, it is vital that companies reinforce their networks, upgrade their cybersecurity strategies, as well as expand them to personal networks and mobile work-from-home devices. Additionally, as more and more transactions occur online, higher are the risks of identity and information theft. Securing online payment gateways, customers’ personal and confidential data, and organizations’ internal communications, among others, need to be safeguarded with appropriate data protection strategies.
IV. Smart Work-from-Home (WFH) strategies
While the WFH transition was an immediate response to the pandemic induced lockdowns, businesses soon realized the need for a connected and engaged workforce. This became especially critical for businesses that had a geographically diverse workforce. This is why businesses are seeing the need to strategize and invest in collaboration software and ensure secure connectivity. WFH as a part of business norm is here to stay, and going forward it is likely to become a key part of the people management practices of organizations big and small. A recent survey by Atlanta Federal Reserve and the University of Chicago indicated that the number of working days spent working from home is expected to increase 4X from pre-COVID levels, ie., from 5% to 20%[4].
V. Hybrid Cloud
Cloud computing is revolutionizing everything from remote working, virtual learning, telemedicine, and more in the current data-driven technology landscape. A hybrid cloud model enables an organization to leverage both public and private clouds to create a flexible and cost-effective computing environment. As businesses realize the need for a combination of different platforms to meet a variety of business needs, hybrid cloud will play a critical role in computing going forward. This is why recent research has pegged that the hybrid cloud market growth will more than double in the next 5 years to reach USD 128.01 billion by 2025[5].
VI. Customer Data Platforms (CDP)
An interesting statistic[6] disclosed that every individual will generate 1.7 megabytes of data every second, and Internet users generate about 2.5 quintillion bytes of data each day in 2020. Today, not a single business, big or small, can deny the fact that the customer data offers massive competitive advantage over its peers. A Marketsandmarkets research[7] shows that the global CDP market is expected to expand from $2.4 billion this year to $10.3 billion by 2025, registering a CAGR of 34%. To fully tap into the true potential of this vast and invaluable data, companies are adopting Customer Data Platforms (CDPs), a unified, single database that houses consolidated and integrated customer data from all the available sources, and is usable by anyone who needs access to it.
Way forward…
With 2020 accelerating digital transformation in unexpected ways, there is need to recalibrate and prepare for what lies ahead. The need of the hour is for the business ecosystems to have a strong scaffolding of digital frameworks and be future-ready. We believe that these new trends in digital transformation will help safeguard and simplify businesses, augment operational efficiencies and enhance productivity.
[1] https://www.reportsanddata.com/report-detail/anything-as-a-service-market
[2] https://www.superoffice.com/blog/customer-experience-statistics/
[4] https://news.stanford.edu/2020/06/29/snapshot-new-working-home-economy/
[5] https://www.mordorintelligence.com/industry-reports/hybrid-cloud-market
