By the end of this year, two-thirds of the Global 2000 CEOs will have digital transformation at the center of their corporate strategy.
Many companies understand that moving operations off of paper is a natural first step, but many fear selecting something too narrow or burdening the organization at large with some Stone Age product. With those two ends of the spectrum, what does it really mean for companies to embrace digital transformation?
Back in the '80s, the big buzzword was "paradigm." It meant completely changing the way you do things and, in turn, leading everyone else in your industry down a whole new path – ideally one far more intuitive, intelligent and efficient.
Now all the buzz is about digital transformation and what it means for the future of not only your company but the entire business economy.
Much like the "paradigm" movement of the '80s, embracing digital transformation means being willing to change things from the ground up and completely redefining how you go about getting work done, ideally in the name of something far better.
Leaving the bigger existential questions for another forum, let's take a look at the evolving trends of digital transformation as they relate to B2B companies in 2018.
1. Unlocking data silos
Digital transformation means using the data within your existing practices to find a better way to execute.
The issue of data silos has been around for as long as data has existed, but it's really been in the past two years that enterprises have finally woken up to the need to invest in technologies that form a connected enterprise – that is, one in which data from various touchpoints and sources is connected to make the data much deeper, richer, and much more easily mined for real-time insights.
In 2018, enterprises will continue to take steps to unsilo their data, which means discovering more efficient ways to deliver services, adjust to business needs as they emerge, provide better customer experiences and more.
2. Information on the go
According to a new report from the International Data Corporation, the number of mobile workers in the U.S. will rise from 96.2 million to 105.4 million over the next five years. By 2020, mobile workers will account for nearly three-quarters (72.3 percent) of the U.S. workforce.
Mobility has become synonymous with productivity, regardless of the workplace. Companies will see the rise of employee apps, making it possible for most employees to carry their work and information with them and link back to the corner office in meaningful ways (another big trend for 2018; more on that below).
3. Intelligent work processes
Intelligent work processes – the combined use of artificial intelligence and automation – will be put to much wider use in 2018 as industrial stalwarts come to understand the need for digital transformation and how digital transformation will help them create much safer and more efficient working environments.
Intelligence brings fundamental changes to how companies and individuals work via bridging data between physical and digital work actions. Machines have different strengths and capabilities that complement their human supervisors, and this living and evolving relationship will become the main driver of deep change and improvements in the industrial sector.
From energy to manufacturing to pharmaceuticals, the use of industrial software as a service (SaaS as both a complete solution and a robust platform) that leverages deep data and analytical capabilities with human wisdom and insights will see a significant uptick in 2018.
4. Cloud dominance vs. on-premises overhead
The power and role of the cloud in digital transformation cannot be understated. Used correctly, cloud-based systems bring efficiency, speed, cost reductions, transparency and, ultimately, significant bottom-line improvements.
Research company Vanson Bourne said that companies that adopt cloud services experience a 20.66 percent average improvement in time to market, an 18.80 percent average increase in process efficiency and a 15.07 percent reduction in IT spending.
Forrester expects the public cloud market to grow to $236 billion by 2020. Indeed, next year will undoubtedly see continued uptake of public, private and also hybrid cloud systems as stand-alone on-premises databases get discarded.
5. Connection of the front lines with the executive office
This, of course, intertwines with the trends outlined above. Via the cloud, intelligent work processes, the breaking down of data silos and the rise of the mobile workforce, 2018 will see an unprecedented increase in the use of applications designed to connect the field with the corner office.
This trend will be especially pronounced for industries, such as energy, that typically rely on large, scattered teams of remote workers. From auditing to checklists to inspections to quality and maintenance, finding the right industrial SaaS will be a key initiative for a multitude of big-industry enterprises looking to use the latest cloud-based technology to their advantage.
6. The millennial effect
If millennials and their input, knowledge, and expertise – both as employees and as customers/clients – were important for digital transformation initiatives in 2017, in 2018 they will be essential.
For millennials, it's a "digital-first" mentality. They expect to have the same digital capabilities and ease of use in the workplace as they have as customers. Also, consider that 71 percent of digitally maturing companies say their strong digital vision is what attracts new talent.
To embrace digital transformation in 2018, you can bet that companies will be courting millennial for their insights, and using their own digital transformation initiatives to do it.
Innovate or die
The reality is that digital transformation is no longer a luxury to be addressed when companies get around to improving – it's now an imperative for bottom-line growth. Research from McKinsey & Company finds, "Turning your company into a top quartile B2B digital player can increase revenue by 3.5%."
But digital transformation is more than just redefining how companies work; it's existential. General Electric is the only company listed in the Dow Jones Industrial Index today that was included in the original index in 1896. Over the past 15 years, another 52 percent of the Fortune 500 has disappeared.
This means that digital transformation is really a call to action. By connecting your enterprise, enabling data on the go, using intelligent work processes and the cloud, connecting frontlines with the exec office, and embracing the millennial effect, for most companies 2018 will be the year they look at and say, "That's when we made our transformation."