Please Note: The original article was published in The Hindu Business Line
The bad news is that nobody expected 2020 to turn out this way, least of all – enterprises looking to successfully navigate through competitive business landscapes. But here’s the good news. Many had already started, albeit unknowingly, following the right map coordinates to the hallowed grounds of digital transformation.
A whopping 73 percent of enterprises failed to provide any business value whatsoever from their digital transformation efforts
– Everest Group
Obviously, it won’t be smooth-sailing for everyone.
Two examples of digital transformation done wrong:
Ford Smart Mobility: In 2014, Ford tried to leave new segment footprints by building digitally-enabled cars. Due to cross-function collaboration failures, the venture was unsuccessful – taking down stock prices and causing management restructuring in the process.
GE Digital: Between 2011 and 2015, GE’s tried to deliver an IoT platform and create a new business model for industrial products. Unfortunately, they were too focused on short-term earnings – and the unit ended up shutting shop.
It’s certainly far from being all gloom and doom too, considering how successfully some enterprises have been able to keep pace when it counted.
Two examples of digital transformation done right:
Beer Garage: Anheuser-Busch InBev built a tech innovation lab to digitally connect breweries that became a rousing success. Along with seamless automation of their supply chain journey, Beer Garage also ensured that each brew batch was closely monitored for achieving world-class quality.
Doctor on Demand: Despite a slew of new telemedicine players, Doctor on Demand manages to hold on to and grow their market share. From its early adoption of lab testing to digitally catering to Medicare Part B beneficiaries, they’ve been one of the innovators in this space. Recently, they’ve also raised a Series D funding round of $75 million led by a major private equity firm.
Of course, there’s also a matter of timing. Not many realize how important the right decision at the right time can be to ensure the success of digital businesses.
Two examples of how digital transformation saved the day:
Walmart: Just as the Amazons of the world were becoming popular, and other major retail brands continued to bet on brick-and-mortar stores, Walmart stepped up to the digital world. They hit the accelerator on digital retail innovation by diversifying its services and delivering memorable mobile experiences.
New York Times: With the digital world taking its toll on the media industry, many newspapers were forced to shut shop – and some continue to struggle. As for The New York Times, they embraced the world of digital style. Powered by their successful subscription model, they combined consistent content delivery with smart UX thinking to keep their readers from going elsewhere.
Today, with the pandemic taking root in cultural mindsets and shaping market expectations, the speed at which digital businesses will evolve has dramatically changed. Let’s look at five of their biggest challenges today.
- Difficulty in managing multi-cloud security and governance
- Siloed data sources across multiple touchpoints
- Unable to extract meaningful insights from unified data
- Low digital adoption by employees
- Legacy business models that refuse to go away
Of course, this acceleration towards digital transformation also means they can unearth more opportunities to capitalize upon. But before they embark on these bold journeys, it is crucial to know what lies ahead. So, here’s a sneak peek into how digital business will evolve in 2021.
1) AI-based recommendation engine – automatic for the people
Pandemic or not, personalization of experiences has ranked high on the priority lists of CXOs, product heads, and even IT leaders. The reason for this is rather simple – the user expects it. We live in an age where people get angry if their Netflix home screen displays movies that they have zero interest in watching. It isn’t just the OTT media service providers and retailers who are after AI-powered recommendation engines. From healthcare to banking, the number of use cases is still growing.
In 2020, having an AI-based recommendation engine to deliver proactive and intuitive user experiences wasn’t a luxury. With Machine Learning workflows that are becoming progressively more intelligent, there has been an increased need to combine both collaborative and content-based filtering to maximize the extent of personalization.
However, before the end of 2021, OEMs might go beyond the recommendation engines and develop fully-fledged AI modules that deliver “bespoke” personalized services.
- Deep learning integration to identify complex user data structures
- Rules-based, non-textual content preferences
- Truly omnichannel recommendations
2) Blockchain-based ERP – smooth sailing for supply chain journeys
Let’s face it – from the time you get a product order to the moment the invoice gets paid, there plenty of things that can go wrong – and some of these may prove to be extremely costly. At the front and center of it all lies enterprise resource planning (ERP) systems. But with the rise of blockchain technology, it became clear that storing immutable data blocks can secure, simplify, and accelerate the supply chain journey.
In 2021, blockchain will be one step closer to becoming the primary transaction management technology for future-proofed enterprises. Look at it this way. The backbone of efficient supply chain dynamics is the level of trust that gets established between people. And blockchain technology will further solve those trust issues by enhancing how it can validate transactions, verify users, prevent data leakage, and help maximize the ROI of ERP.
- Real-time traceability to the right stakeholders
- Increased scalability to support larger groups of users
- AI-enabled chatbots and AR-powered device upgrades
3) Hybrid cloud – getting the best of both worlds
The seemingly populist opinion that switching over to the cloud is the most cost-efficient way to do business is a myth – unless you started your company without investing in any on-premise technology infrastructure whatsoever. But if you are a large or mid-sized company, there’s no guarantee that cloud hosting is cheaper. What you need is a common ecosystem where multiple systems can interact, irrespective of where they’ve been hosted.
The year 2021 will see more enterprises realizing the value of the hybrid cloud. It may be the only way to be practical about how your technology goals stack up, literally, against your business goals. Hybrid clouds will not only offer more architectural flexibility by combining the best of both worlds, but also builds proactive security protocols, ensures compliance, without compromising on network security, and increases auditability.
In that sense, the new year will bring to light the fact that the SaaS-based model for managing applications is more expensive than the on-prem model in the long run! And OEMs will strongly consider leveraging on-premise servers to deploy products while increasing adaptability and sustenance. iPaaS providers like Dell Boomi, which allows both on-premise and cloud deployment, will emerge as game-changers for these enterprises.
- Sustainable automation-led multi-cloud environments (private/public/hybrid)
- Growing usage of containers to increase operational efficiency
- Enhanced end-point protection against data breaches
4) Autonomous applications – low on maintenance, high on performance
When people think “autonomous”, their first reaction is – “Bet it’s about self-driven cars.” If you’re in the logistics and shipping industry, you can probably visualize unmanned robots. But in the recent past, autonomous applications have been quietly building a culture of workforce optimization. In fact, the blockchain surge for ERP applications started as early as the 90s. But these days, AI-based ERPs are marking the dawn of a new era. They help critical business units like HR operations, finance operations, planning and procurement, and legal teams to become more organized. More importantly, they significantly improve their decision-making capabilities with deep-dive data insights.
Integrating large data sources of data while interpreting them into actionable insights that could potentially make or break businesses may not exactly sound new. But as 2021 starts to take shape, with more data-intensive applications coming to the fore, the pressure will be on functional teams to transform personalized information into measurable insights.
- Low-maintenance autonomous data warehouses
- Data parameters based on language technology and emotional intelligence of users
- Powerful auto-indexing and auto-scaling to accelerate application usage
4) Cybersecurity – Decentralization in the age of WFH
For a while, earlier this year, every IT staff’s imperative seemed to be connected to the COVID-19 situation, whether keeping legacy systems on talking terms with cloud applications or assisting employees with bridging work-from-home (WFH) connectivity gaps. Now, with enterprises having learned the hard way, cybersecurity has emerged as one of the biggest tasks for IT teams.
In 2021, cybersecurity will run into smarter problems because AI is becoming a part of the quintessential hacker toolkit. Given the change in tides brought by work-from-home policies, the decentralization of security controls will take prominence to keep remote issues under control. Furthermore, evolving data governance policies will require a closer look at automating breach notifications.
- Ransomware-driven exploits that affect legacy protocol services
- Growing need for cyber insurance policies
- End-to-end security for agile DevOps frameworks
In 2021, continuing to digitally transform your business or building a digital business – from the ground up – is bound to come with a new set of time and innovation-bound challenges. There’s no doubt that C-suite leaders will be under more pressure to seamlessly deliver digital initiatives without any hiccups.
I hope this sneak behind-the-curtains peek could help formulate your own perspective on what could mean good digital business for the coming year.
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