Digital transformation has become a bit of a catch-all phrase over the past few years, losing some of its meaning as it becomes used as more of a technology buzzword, than a defined corporate process.
So let’s be clear. Digital transformation refers to the cultural, operational, and organizational changes a company goes through when implementing the modern digital technologies, processes, and standards needed for successful modern business strategies. When a company engages in a digital transformation initiative, they attempt to modernize their technical infrastructure, business processes and core competencies to be more agile, data driven, and customer centric. In short, it’s a measurable and quantifiable business technology process.
And, digital transformation is big business. In 2022, the market size for digital transformation was estimated to be $731.13 billion. It is expected to grow at a CAGR of 26.7 percent until 2030.
The last few years have seen quite a few changes to people’s lives and business plans, and the general economic outlook remains mired in uncertainty. Business and technology leaders have been tasked with reducing costs and optimizing operations to accelerate their digital transformation.
So, how has the state of digital transformation changed in 2023, and what are the most important digital transformation trends for businesses to keep an eye on?
1. Managing the Data Sprawl
With consumers interacting with brands through more channels than ever before, and with the explosion of IoT devices, data is being created at an unprecedented rate. This data sprawl makes data harder to access, impacts employee’s ability to use it for business value, and has a negative impact on sustainability through data centers. The larger and more global the company, the more of an issue this becomes.
Many companies are deploying customer data platforms (CDPs) to manage data sprawl. CDPs are designed to ingest data from multiple, disparate sources through pre-built connectors and APIs. This centralized data foundation helps reduce the data sprawl by creating a single source of truth for customer data that can be used across the organization.
2. Data Privacy and Security
In addition to managing data sprawl, CDPs are ideal for staying in compliance with domestic and international data privacy laws. Many come with features designed to keep you on the right side of the law in regards to your customers’ private information.
Global companies must ensure they’re in compliance with international data privacy regulations to avoid costly fines. Penalties for companies not being compliant are significant and not to be taken lightly.
Organizations can use a CDP to set global data governance standards, in which brands can allow consent by creating data access policies, enable audit logs to ensure policy compliance, and identify any suspicious activity. Some enterprise-grade CDPs also have centralized compliance controls, or can integrate with a consent management platform. This allows organizations to have more visibility and control over how data is being handled, transported, stored, and accessed by different teams across the enterprise.
3. Migration to the Multi-Cloud
Forward-looking organizations have been moving more of their applications, infrastructure, and storage into public, private, or hybrid cloud environments for a variety of benefits, including: reduction of total cost of ownership, increased agility and flexibility, the ability to scale up or down when needed, improved consumption management, disaster recovery, and improved performance.
Migrating to the cloud puts a new level of exposure to valuable data. Organizations have to keep that data secure and in compliance regardless of where it goes. Some companies deploy data masking solutions to make data anonymous and protected, providing zero-trust security.
4. AI and Automation
Improvement in AI/ML technologies, either as standalone applications or integrated into a CDP, is driving a new round of automation efforts that is accelerates digital transformation.
With automation, knowledge workers can be redirected away from mundane tasks to focus on actions that will move the needle for the business and its customers. Cloud-based automation systems help companies increase their scalability and lower TCO.
According to Gartner, the market for software that enables hyperautomation will reach nearly $1.04 trillion by 2026. The movement towards hyperautomation is driven by a need to accelerate digital transformation due to talent shortages, challenging economic conditions, and increased competition.
5. Advanced Data Analytics
While marketers have been relying on analytics to make intelligent business decisions for some time, in order to move the needle on digital transformation initiatives, data-driven decisions made across the entire organization are key.
Advanced data analytics solutions, whether standalone or integrated into a CDP, should include an easy-to-use UI and advanced visualization capabilities. Modern data analytics applications are equipped with AI/ML capabilities that analyze data faster and more efficiently than employees can do manually.
Businesses that leverage advanced data analytics across the entire organization can more effectively increase revenue, improve operational efficiency, optimize marketing campaigns, and improve customer service response.
6. Making Data More Sustainable
In a recent Gartner survey, CEOs reported that sustainability is now a top three priority for investors, after profit and revenue. Companies need to look at integrating sustainable best practices and standards into their IT technology infrastructure and business operations.
“In 2023, delivering technology will not be enough. These themes are impacted by environmental, social and governance (ESG) expectations and regulations, which translate into the shared responsibility to apply sustainable technologies,” David Groombridge, distinguished VP analyst, Gartner, said. “Every technology investment will need to be set off against its impact on the environment, keeping future generations in mind.”
Companies need to look at integrating sustainable best practices and standards into their IT technology infrastructure and business operations. A centralized data foundation can help consolidate redundancies that lead to excess data storage, and streamline data processing efforts.
Digital Transformation and Innovation
Every company is engaged in a digital transformation, whether they know it or not. Digital transformation is a spectrum. As organizations modernize their operations, processes, and technology, it is only refined and improved over time.
For modern companies to stay competitive in an unpredictable world, they must make themselves adaptable to unforeseen circumstances and adapt to the evolving needs of their customers.
Centralized data management solutions are critical for companies who need to manage data sprawl, improve cost efficiencies, stay in compliance on data privacy regulations, automate their operations, and provide the type of advanced AI-powered analytics that will give actionable guidance for successful digital transformation initiatives.
