There's no denying that technology has drastically changed the way we live. Ideas that were once unfathomable are now a reality. Just look around: Drones are becoming important emergency-response tools amid natural disasters, driverless cars are hitting the roads, and 3D-printed houses are on the market.

Even tech for comparatively minor applications is inspiring notable change. More households have started using app-based grocery delivery services, and online shoppers are using augmented-reality features to visualize what products will look like in real life (turns out, the couch you've been eyeballing will, in fact, fit in your space, and it looks perfect with your coffee table — add it to your cart and complete your purchase). 

As technology shapes customer habits, entire industries, and society at large, digital transformation has become a critical priority for every company.

Its impact on the business world is profound. A February report from Deloitte found effective digital transformation initiatives could increase market capitalization by a staggering $1.25 trillion. But done wrong, they could result in $1.5 trillion of lost value.

From artificial intelligence to extended reality, a variety of technologies are shaping digital transformation strategies. And they're helping companies across all industries streamline and optimize business models, improve processes, enter new markets by embracing domain changes, and reshape how their employees work. 

 

 

Unlocking new business models

The rapid advancement of technology has led to major shifts in customer experiences and habits over the past decade or so. To survive the winds of digital change, many businesses have had to radically readjust their business models.

Perhaps most notably, Netflix started off as a DVD-by-mail business. But the rise of the internet led it to transition to a business model of online media streaming. This shift has made Netflix the world's biggest streaming service, with over 230 million subscribers. Meanwhile, Blockbuster's failure to change with the times and acquire Netflix ultimately led to its downfall.

"While business leaders understand the need to transform technologically, the greater challenge has been how to navigate the accelerating rate of change," said Nigel Vaz, the CEO of Publicis Sapient, a consultancy for digital business management and transformation. "It's not just technology that's changing but business models, societal expectations, and customers themselves."

Adopting a technology-driven business model can help companies save money, launch products and services quicker, and improve operational efficiencies, Vaz told Insider. He said he expected industries with "significant human implications," such as healthcare and space exploration, to benefit the most from digital transformation.

For instance, implantable brain-computer interfaces could treat neurological disorders, and sending digital technologies to space could aid the climate crisis by monitoring Earth's emissions, Vaz explained.

Technologies such as artificial intelligence, combined with open-source datasets and computing, would also accelerate innovation and aid business progress, Vaz said.

"For example, in financial services, and similarly across most industries, companies will develop AI applications that can deliver personalized experiences to users, create customer service that is more intuitive, optimize portfolios, analyze the market faster, and forecast more accurately," he added.

Additionally, Vaz said, cloud computing, 5G, and smaller sensors could unlock value for businesses across all sectors: "Cloud computing is helping organizations analyze massive amounts of data in real time, 5G networks are connecting a vast number of end points to the cloud with near-zero latency, and the miniaturization of sensors is enabling the collection of precision data."

 

 

Taking business processes to new heights with AI

AI is also helping businesses improve internal processes to meet their objectives more effectively. "While not a new technology, AI is now more advanced and democratized in the hands of the everyday user," said Jean Pelletier, the vice president of digital talent transformation at Schneider Electric. This progress, she explained, is prompting businesses to think differently about their value chain and how they can use AI to "bring a high-tech, high-speed approach" to business activities.

Despite the increasing demand for AI applications, Pelletier said vendors are "still catching up" as they scale AI-driven software and implement the "right vision" into their road maps. As a result, customers must wait to reap the benefits. 

With this in mind, Pelletier said Schneider Electric has to continuously make a decision: Should the company create internal processes with their team or wait for software partners to deliver new features? The answer is that it depends. 

When it comes to using tech for talent acquisition, such as AI-driven candidate matching, the company has no qualms about taking the reins. But gaining insights into the "brand-to-hire funnel" — i.e. how companies attract talent through their brand presence — comes with a unique set of challenges, meaning Schneider Electric must decide if it should license outside tools to get the job done or "consider taking on the challenge within our own AI hub," Pelletier added.

Beth Johnson, the chief experience officer of Citizens Bank, also sees the benefits of using AI solutions to transform business processes, particularly when it comes to improving productivity for knowledge workers. "It can get us more of the information we need faster, enabling us to work more efficiently and create a better experience for customers," she said. 

By viewing AI as a tool set rather than a single innovation and coupling it with data, Citizens Bank has created more-personalized experiences for customers and increased the efficiency of its processes. "Because we have thought differently about how we leverage our data environments, we're able to take advantage of innovative tools," Johnson said. "This is especially important given that banks are data-rich organizations."

 

 

Wielding the power of cloud tech to break into new markets

Advances in cloud-computing technology are helping companies enter entirely new markets — such as Amazon branching out into media streaming with Amazon Prime Video and cloud computing with Amazon Web Services.

But how do businesses achieve cloud-domain transformation? Tom Fairbairn, a supply-chain expert and distinguished engineer at Solace, said businesses must be able to "work across existing domains" if they wanted to "forge new business capabilities in adjacent activities."

Fairbairn told Insider that speed and agility were prerequisites for successful domain transformation. "We've all seen the frantic scramble for takeaway-delivery market share as incumbents in the ride-sharing space attempt to pivot while new entrants build from scratch," he said.

This is where Solace uses event-driven architecture, known as EDA, to help. It's a software-architecture model for quickly gauging and detecting business "events" — a change of state, such as with consumer activity, at an organization.

For example, e-commerce businesses can use EDA to detect when an online shopper purchases a certain product. The software will then send that information back to the retailer, almost in real time, providing data insights on customer behavior and interests.

Consequently, this tech can help companies understand what's affecting their business and find new ways to strengthen relationships with partner organizations.

When looking to optimize digital tech to enable domain transformation, Johnson believes that businesses also must consider the way in which consumers acquire information, she said. 

Company leaders should ask questions like: In what ways does information consumption affect where customers bring their patronage? How does this affect the company's approach to using technical infrastructure to support, attract, and retain customers, especially as the business moves into a new market? How is the company leveraging AI as it digests and delivers information to a new set of customers?

At Citizens Bank, Johnson said: "We want to be positioned to respond to these advances so we can meet our customers where they are and in the channel of their choice."

Johnson acknowledged that there's no silver-bullet approach to transforming businesses' entry into new markets through domain evolution: "What really matters is that whatever technology you're integrating into your business needs to work in tandem with everything else to create a smooth, fast, and personalized experience for your customers in the new market."

 

 

Inspiring a tech-minded culture within business organizations 

From working remotely to using AI, technology is also changing how people work — and, as a result, transforming the internal cultures of organizations. 

"When we talk about culture/organization digital transformation, I immediately think of the implications technology has on talent holistically," Johnson said. "Not only is technology helping enhance productivity, it is changing the types of roles we need to fill over time, and it is changing how we train for those roles."

Duncan Roberts, a senior manager in the research department at Cognizant — a consultancy that helps businesses modernize their technology and processes — expects generative AI to result in major changes to company structures and cultures over the next few years. This technology will increasingly automate "repetitive, task-based work" and could replace siloed departments such as operations and legal, he said. "The focus will shift from input-based roles to outcome-based roles," he added.

Therefore, many people must acquire new skills to retain or seek employment as employer expectations change. Companies will increasingly look to hire people who can use AI tools to deliver business value. This, Roberts said, requires ideation and innovation skills. 

"For example, if a retailer is using gen-AI tools to create marketing copy, there's only so much data that larger language models can train themselves on," Roberts said. "Companies need to ensure they can differentiate their copy to remain competitive. Human talent that can use these AI tools in an effective and unique way will be essential."

Extended reality — a combination of virtual reality, augmented reality, and mixed reality often called "XR" — is another technology that could revolutionize organizational cultures. Vaz said: "XR is finding applications in employee training, remote collaboration, product visualization, and experiential marketing."

Prime example: In 2022, trainee medics at Imperial College London started using virtual reality headsets that immersed them in a simulated medical emergency such as a patient having a heart attack.

 

Digital transformation is the way of the future

Businesses clearly can't ignore the importance of digital transformation — otherwise, they run the risk of losing competitive advantage, upsetting loyal customers, and alienating their own staff.

An effective digital transformation strategy, using a variety of technologies and focusing on all areas of an organization, can ensure that businesses of any size and in any industry are future-proof and deliver value for all stakeholders.

LeackStat 2023