"Digital Transformation" (DX) is quickly becoming one of the most overused terms in business--for good reason. The influence of cloud, mobile, analytics and social media technologies are changing the way modern organizations do business and throwing seasoned executives and newbies alike for a loop. As a result, a slew of studies, surveys, webinars and thought leadership is available with tips, tricks, stats and notable facts to help us navigate the DX. Read on for six recent takeaways.
Let’s start things off by giving some jaw-dropping context. IDC recently updated its forecast for worldwide spending on DX technologies. In its Worldwide Digital Transformation Spending Guide, the analyst firm projects that we’ll spend more than $1.2 trillion on the tech this year, a 17.8 percent increase over 2016. IDC says we’ll maintain that pace over the next several years, reaching a $2 trillion spend in 2020.
As for the specific areas that will benefit most? Over the five-year forecast, IDC says that the fastest growing tech categories are cloud infrastructure (29.4% CAGR), business services (22.0% CAGR), and applications (21.8% CAGR). Also notable is that AD&D spending will overtake IT services as the second largest DX tech category in the next three years.
The U.S. is far from the only country determined to lead the pack in DX technology. Around the world, governments and businesses are investing heavily to increase their national pace of transformation. Singapore recently committed more than $56.4 million USD in helping its small and mid-size enterprise (SME) market along its transformational journey, placing emphases on cybersecurity and data analytics. Part of the country’s SMEs Go Digital program, the funds will also establish the SME Technology Hub to advise businesses on pre-approved technology systems eligible for support and connect them with solution providers, consultants and vendors.
And watch out for our neighbors to the north. While a 2016 IDC report showed that 63 percent of Canadian enterprises are lagging behind in DX technology, a new Canadian DX consortium is determined to change that. Ten organizations including Deloitte, SAP, AWS and Intel, among others, have launched DXagents to help Canadian companies become more globally competitive.
“It seems some inertia has set in at many Canadian organizations, and it’s preventing them from adopting new digital technologies,” said Michael Conway, President and CEO of FEI Canada, Canada’s leading association for CFOs and other senior financial executives. “I’m hoping this consortium can be a launch pad for changing attitudes across Canadian business.”
Not since the dawn of the internet have hackers had access to such a playground of opportunity. Sixty percent of digital businesses will suffer major service failures because their IT security teams won’t be up to the task of managing risk, according to Gartner. But never fear. The analyst firm has six cybersecurity tips to help businesses—and partners—get prepared:
According to a new survey of 255 technology professionals from NuoDB, "Benchmarking Strategic Technology Initiatives with Software Companies," the key to navigating the Digital Transformation is having a solid handle on database technology and agile methodologies. Software is transitioning from on-prem to SaaS-based more every day, and businesses should integrate the best of modern infrastructure with traditional SQL capabilities.
"The ability to swiftly respond to changing customer demands is no longer a nice to have, but a necessity for business survival. Our findings underscore that developing a modern infrastructure to support digital transformation initiatives is not just a C-suite concern, but rather it is an imperative for line of business and technical professionals alike," said Jeff Boehm, chief marketing officer at NuoDB. "As the analysis shows, the database is critical to the success of those initiatives and provides the flexible, scalable foundation organizations required to quickly deliver products and services in the face of today's ever-evolving customer expectations."
DX technologies will be felt by line of business (LOB) leaders everywhere, giving partners greenfield opportunities. One area the channel should pay particular attention to, according to a new webinar from The Hackett Group, is procurement. Eighty-four percent of respondents in Hackett’s 2017 Key Issues Study thought that digital transformation will offer step change performance improvement of the procurement function and change the way procurement services are delivered over the next three to five years.
“Digital transformation is poised to fundamentally change procurement,” said Amy Fong, a principal at The Hackett Group. She explained that there are four main areas of opportunity:
A new report from McKinsey & Company warns business leaders that DX technologies and methodologies won’t work unless they’re applied to the core business model. They require big, bold commitments, which can be difficult to make during times of uncertainty—which, of course, is exactly what the Digital Transformation is.
Unless businesses are willing to transform the things that makeup the essence of the company like value propositions, people, processes and technology, the legacy organization will almost invariably “exert a gravitational pull that drives a reversion to established practices.” CEOs must make a series of tough decisions that occur within the four phases of a successful digital transformation:
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