Throughout 2018, strategic digital transformation has become more widespread in different business environments, from affecting only the IT department to impacting the competitiveness of the entire company. This has caused disruptive technologies to expand.
On the other hand, the responsibility for carrying out this transformation is moving to the C-Suit and to collaborative and multifunctional groups, which continue to have the consumer experience as the leading area within the investments in transformation Digital.
Employee experience and organizational culture are also increasing in importance in empowering and accelerating change, as is growth and innovation.
It is clear that digital transformation is maturing into a business movement. While modernizing the way companies work and compete, helping to adapt and grow effectively in an ever-evolving digital economy.
However, it also makes it clear that there is still a lot of work to be done. Companies are generally prioritizing technology over understanding disruptive trends that are influencing markets and, more specifically, customers and employee behavior and expectations.
The ultimate goal
The main purpose that all organizations with digital transformation should seek should focus not on the adoption of digital, but on creating a culture of cooperation and innovation, supported by the use of digital tools.
Change and digital innovations go beyond IT, it’s about constantly pursuit of innovative and agile businesses and operating models (powered by evolving technologies, processes, analytics, and talent capabilities) to create new values and experiences for customers, employees and stakeholders.
As a result, 85% of the companies that have started a digital transformation process have expanded beyond IT. This is a promising percentage, which is clear, as automation is getting closer and closer to all companies regardless of the field in which they move.
In addition 90% of the companies that have started this process agree that digitization will transform the way they work, particularly as they change the way they communicate with customers and the way collaboration occurs, it is not surprising that nearly three-quarters agree that those who do not take digital forms of work will be left behind.
Four key sectors for the globalization of digitization are worth noting: construction, data centers, industry and infrastructure.
Construction
In construction, the business value of digital transformation lies in the use of lower energy use, greater occupant comfort, and in the simplification of operations. In terms of energy, buildings gather 36% of all global energy use and generate 39% carbon emissions.
However, thanks to automation the buildings generate more energy than they use, generating 100% more of the energy they need, as a result of the combination between power management, automation and IoT connectivity.
It is this same IoT connectivity that enables application-based environmental control over lighting and temperature, thus driving the comfort of building dwellers.
Data centers
As mentioned above, the IT infrastructure takes a large portion of the budget for the digital transformation of companies, for example, cooling devices can amount to 40 of the total costs.
By 2025, the consumption of the information and electricity area of the communications technology industry is expected to soar by 20.9% and therefore account for 5.5% of total greenhouse gas emissions.
In contrast to these projections, success is emerging in digitally transformed data centers around the world. This new generation of data center can run 20% faster with modular infrastructure. This ability to do more computing at a lower cost is possible through an integration of monitoring software, cloud analytics, and expert support.
Industry
The same promise to do more with less applies to the industrial sector. The Industrial Internet of Things (IIoT) connects inventory to smart sensors through the supply chain, making it easier than ever to bring products to market faster and with lower production costs.
In addition, digitally boosting plants, with their continuous registration and real-time monitoring, facilitates regulatory compliance and mitigates environmental impacts.
However, despite this potential, only 7% of the C-suite’s decision makers reported a complete IIoT strategy. However, companies that do enact a comprehensive strategy are seeing very positive results, increasing the overall efficiency of companies from 45% to 65% in two years, as well as reducing equipment downtime by more than 50% years.
Infrastructure
Infrastructure, whether public or private, will be tested in the coming decades. Expanding populations, especially in new economies, will continue to emphasize systems that move people, products and energy around the world. In addition, the urgency of globalization and climate change will require infrastructure to meet this capacity for growth while reducing gas emissions. This energetic paradox must, and will, be solved through digital transformation.
The electric power industry has incorporated into digital transformation, the smart grid, which houses billions of components (e.g. electric meters, transformers, capacitors, phasor units of measurement, and lines of energy) that are now under the control of a centralized digital architectural system.
CIOs and executives have a broad organizational vision
As a successful digital transformation requires a cross-cutting and functional effort across the enterprise, it is increasingly necessary for executives to have a broader organizational field.
CIOs stand out as the official “owners” of digitizing initiatives with a 28%. Followed by CEOs, who are also taking an important role. However, the participation of executive chairmans and boards so far is low.
The CEO’s role as executive sponsor of digital transformation is also on the rise, reaching 23%. Currently, both the Director of Innovation and the Digital Director have a strong focus on transformative strategies, indicating that roles are combined over time as digital becomes the new norm and as innovation becomes makes it a priority in the transformation of the business.
In the case of CMOs they are focused on the automation of the marketing area, along with new devices, applications and services on demand to drive new behaviors and customer expectations.
The biggest challenges business leaders face
Despite the benefits of digital transformation, business leaders who decide to adopt a digitizing strategy are not exempt from facing a variety of challenges. It is therefore necessary to anticipate and address all these “problems” sequentially.
- The lack of clear data on the ROI makes digital transformation is perceived to as a cost center And s and not as a successful bet:
The main challenge reported by executives is lack of data or ROI to justify the value digital transformation (29%). Followed by the 28% business leaders who cite the budget and the perception of digital transformation as a cost center, not as an investment to improve performance and growth.
These two challenges are intertwined. When it comes to digital transformation and innovation, many executives, managers or shareholders often find themselves “contacting” the factors driving the evolution of the market and disruptions.
While they often perceive digital transformation as a resource that moves away from shareholder value and quarterly performance, the reality is that it is an investment in competitiveness and short- and long-term value creation.
Without clear data showing how digital transformation positively affects the bottom line, digital transformers or agents of change, they must continue to struggle to obtain the resources they they need to succeed.
- Resistance to change and organizational culture continue to pose significant barriers to transformation:
The third most difficult challenge that companies experienced is resistance to changing human dynamics.
This indicates that transformation evolves beyond IT and marketing, there is a greater need for leadership and human resources to unite and engage the workforce around these issues.
Previously the third most important challenge in digital transformation was the company’s culture, however, it has now dropped to fifth place. Corporate cultures are often rigid And old-fashioned, as it is developed for a different type of work done under different aspects circumstances.
That’s why business culture and strategies that encompass the customer experience must undergo significant evolution to accelerate change from the inside out.
- Companies prioritize updating customer contact points, however, they have not yet modernized the customer’s journey:
Most companies say that modernizing the customer experience is an ntro priority of digital transformation, and in addition, most companies are researching how to improve the journey of digital transformation customers.
This presents a significant opportunity for companies looking to advance their digital transformation efforts through customer experiences, physical, digital or mobile.
This is an encouraging fact as it demonstrates an increasing level of maturity (the “elite”) among companies that are making progress in digital transformation, for example, 35%organizations has defined completely the customer’s journey in the last year and have used that data to prioritize their digital transformation roadmap. And an additional 24 is actively studying the mobile customer journey in real time.
At the same time, the maturity spectrum of the customer’s journey also includes companies that are operating without the benefit of customer information. There is a percentage remarkable business (41%) who have recently started to investigate the behaviour of their customers and others are waiting for results (27%).
The annual tradition of investing in digital and CX transformation without studying l travel and customer data are coming to an end. As customers become more and more digital, they generate more and more data and, in an era of where the most innovative technologies such as machine learning are the order of the day, companies have a unique opportunity to convert this data in valuable information, in order to improve the xexperience, the performance and the business growth.
Conclusions
The goal for most companies and organizations now is to go beyond the considerations of the initial potential of digital transformation. Some of the reasons to drive business digitization are summarized in:
- Customer Travel Study: Understanding how customer intents, behaviors, and preferences are evolving makes sense of CX strategies. These ideas help the steering committee that brings digital transformation to ensure consistency, keep the C-Suite informed, and ultimately gain top-down support.
- Making data the center of decisions: Major organizations are building centralized data infrastructures to better inform and support multifunctional efforts. Doing so promotes collaboration and integration, as well as the unification of digital transformation around data-supported efforts.
- Align digital transformation investments with business objectives: The growing role of CEOs overseeing digital transformation is encouraging. At the same time, many of the digital transformation and innovation efforts are still often seen as cost centers That is why the need to base investments through previously extracted metrics is more important than ever.
- Prioritize the culture of transformation and innovation: progressive companies are prioritizing investments in organizational culture to make them more iterative, adaptable and innovative. Continue to focus on creating an organizational culture of innovation, and introduce EX programs that will cultivate a workforce with greater digital capacity.
