Why your company must be thinking about digital technologies?

Digital leaders
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One of the most common question that we have received when we try to sell any digital product or service, especially in with SMEs is: Why we should spend (in my opinion is better to consider an investment) this budget in digital technologies, if we our business sector isn’t highly dependent of the current techs. Build a consolidate to digital roadmap is key to succeed in the following years. Xymbot has more than 25 years of experience support customers to reach this goal.

In many cases, executive or decision-makers don’t see a short-term return in their inversions on digital solutions, for many reasons: cost/value relation, short-term return of the investment, added value to the current practices, among others. So, are they completed wrong? The honest answer is “NO” in some cases, but what about the future?

In order to answer this question, we have reviewed a several survey in order to collect what the CEOs and global tech leaders are thinking about:

A 2020 Deloitte [1] Tech Trends report about the finance and future of the IT solutions describes that going forward, risk like finance and other enterprise functions should become enablers of innovation rather than impediments to it. One approach involves thinking about potential risks that could arise in a long-term vision, rather than basing risk assessments on current or past activities. Viewing innovation through a backward-facing lens whether for purposes of funding or assessing risk not only places limitations on innovation’s potential but may ultimately undermine competitiveness at a time when speed-to-market is more important than ever. Moreover, as traditional boundaries separating the business from IT disappear, leaders are making increasingly complex technical innovation decisions. As such, organizations should work to find the right combination of CFO, CIO, or other CXOs to govern decisions.

EY’s Global Telecommunications Sector [2] report emphasis how Telco industry spend reflects the fact that such investment remains critical to supporting digital growth, with quality of experience and reduced costs at the heart of operators’ strategic agenda. While budget constraints in developed markets are dis-incentivizing large-scale transformation programs, emerging markets will continue to drive IT spending growth through 2020. In particular, 5G campaigns are still in the marketing phase. There is a lot of demos around mobile phone industry, but it will be 5G only a better version of 4G in terms of data, speed, latency, reliability, etc. or it will be a disruptive paradigm especially for the Industrial IoT. In combination, these factors are projected to see global telco IT investment reach US$85b in 2020, with 74% of this total being spent with external providers rather than internally.

A 2019 MIT Sloan survey [3] shows that: seven out of 10 companies surveyed report minimal or no impact from AI so far. Among the 90% of companies that have made some investment in AI, fewer than 2 out of 5 report business gains from AI in the past three years. This number improves to 3 out of 5 when we include companies that have made significant investments in AI. Even so, this means 40% of organizations making significant investments in AI do not report business gains from AI.

survey
US workplace happiness survey in 2019 (source: SurveyMonkey)

The Terminator movie franchise is back, and the idea that robots and artificial intelligence are coming for us — specifically, our jobs — is a big part of the present. Around a quarter (27%) of all workers say they are worried that the job they have now will be eliminated within the next five years as a result of new technology, robots or artificial intelligence, according to CNBC/SurveyMonkey Workplace Happiness survey. Nevertheless, the survey results show it may be only a matter of time: Fears about automation and jobs run higher among the youngest workers. The survey found that 37% of workers between the ages of 18 and 24 are worried about new technology eliminating their jobs. That’s nearly 10% higher than any other demographic as it was appreciated the previous figure.

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Expected digital transformation by sectors in private  business and public institution in the following years (source: Gartner)

On the other hand, a survey conducted by Gartner with 2600 CIOs reported that they directed 18% of their annual budget on digital transformation and in this same study, the trend was that until the last year this number increased to 28%. The following Gartner survey shows the expected digital transformation by sectors in private business and public institution in the following year. As it can be appreciated, cybersecurity, advanced analytics, Internet of Things (IoT) and business intelligence are some of the key factors to take into account in your company own investments.

In order to recapitulate, let’s go to the basis of the digital transformation concept. What was the main ambition when this concept was introduced?

Digital transformation has become a very popular term in the last decade. The concept has been evolving during the years. George Westerman [5], MIT principal research scientist and author of Leading Digital: Turning Technology into Business Transformation said: “Digital transformation marks a radical rethinking of how an organization uses technology, people and processes to fundamentally change business performance”. In other words, Digital transformation is a cultural, organizational and operational improvement in industry and society through a smart integration of digital technologies, processes and competencies across all levels and functions in a staged way.

Based on the formal definition, Digital design thinking (rethinking), performance-based investment and a new cultural background for owners and employees are the foundations to succeed in the adopting of digital solutions in your business or company.

First, companies and decision makers need to understand how is changing the environment around your business; to be open to adopt a new way to do things no matter what kind of business you are managing, no matter how small/big is your company, even as a self-employee businessperson, add new digital value to your business and to motivate your team to adopt it must be your priority.

Secondly, the adoption of new technologies in your daily activities transform the way to run your business, your employees and customers relation. This transformation improves your operational mode, accelerates your time-to-market and provides customer-centered services experience.

Finally, you should focus on innovation and creativity as key value proposition with the adoption of new digital technologies to beat your competition. Once arriving to this point, we hope that you agree with us that digital transformation will be impacting your world, no matter what your business sectors is. Everything is moving to digital, your working activities, the way to reach your customers, the method to measure and improve your figure of merit, etc.

In future posts, we will be continue writing about technology and business trends for enterprises. Furthermore, we recommend consulting the following literature to continue your digital transformation journey:

The objective of this blog is to provide a personal vision of how digital transformation trends will be impacting in our daily activities, businesses and lifestyle.

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[1] https://www2.deloitte.com/content/dam/Deloitte/pt/Documents/tech-trends/TechTrends2020.pdf

[2] https://www.ey.com/Publication/vwLUAssets/ey-digital-transformation-for-2020-and-beyond/$FILE/ey-digital-transformation-for-2020-and-beyond.pdf

[3] https://sloanreview.mit.edu/projects/winning-with-ai/

[4]https://www.cnbc.com/2019/11/04/this-is-the-industry-that-has-some-of-the-happiness-workers-in-america.html

[5] https://amzn.to/2XwMXLI

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