In the relentless race for innovation and sustainable growth, organizations have always looked to technology to be the catalyst for driving business results. Whether the objective was focused on getting data as the single source of truth to determine analytics capabilities for decision making, reducing costs through process optimization, or driving business continuity for economic survival in a competitive environment, technology has fueled value creation through business transformation.
Let us look at the broader definition of business transformation. A business transformation is all about making fundamental changes to operations and models, creating digital business models to realize significant gains in value. It is about aligning decision-making, operations and data to anticipate and respond to disruptions, changing customer needs and new market opportunities. Business transformation tools in a digital era include a clear digital transformation strategy, hybrid cloud architecture, deep analytics and a suite of advanced technologies: artificial intelligence (AI), blockchain, automation, edge computing and the Internet of Things (IoT).
The past two years have accelerated the rate of change digital transformation clients are experiencing and executing. We are seeing patterns of technology makeovers, or “digital transformation,” in three core areas. Digital transformation is the adoption of digital-first customer, business partner and employee experiences. In other words, these patterns have emerged as strategic drivers of technology-led business transformation, and these are aligned based on:
Domain or functional needs
Let’s deep drive into each of the drivers:
Digital transformation driven by industry needs
The industry of a business will define the need and type of transformation and technology needed to drive value creation. An organization’s need for various types of datasets that they want to harvest, curate, orchestrate and guide in the types of AI/analytics models is highly dependent on the industry they operate in.
For example, the pandemic has upended manufacturing industries. There have been significant shifts in supply chains, workforce availability, and sustainability goals. Companies are rethinking their supply chains and operations to accelerate their digital transformation.
One such company, Reckitt, is one of the world’s most renowned and trusted consumer brands in hygiene, health and nutrition through their brands Lysol, Air Wick, Calgon and others. Reckitt partnered with IBM to deploy advanced technologies to connect and digitize their factories for Industry 4.0. The goal was to provide their workers the information they need to anticipate, predict and improve overall equipment effectiveness (OEE), energy efficiency and factory maintenance. These efforts, largely driven by industry trends, are helping Reckitt build resilience and agility to support evolving market demands for its products.
Digital transformation driven by enterprise functional needs
Transformation is not always driven by outside forces. Many businesses look at functions such as customer processes, talent, or finance and supply chain operations, and reimagine them for efficiency, process optimization and cost management. A recent Gartner study reports that 82% of CFOs are accelerating their digital transformation to make their business more competitive.
The growing trend is all about deploying intelligent workflows, achieved through digitizing and automating workflows fueled by data. To accelerate these workflows and their outcomes, companies will need to embed technologies like automation, blockchain, AI and edge throughout, with data as the backbone. The benefits of activating intelligent workflows are significant. In a recent IBV report on the virtual enterprise, business leaders say AI-powered and automated workflows improve customer experience, efficiency and decision making.
IBM is deploying intelligent workflows to transform its own internal processes. IBM was able to save 4 million work hours by infusing automation and AI into 65% of workflows. This improved efficiency and decision making across finance, supply chain and customer processes.
Transformation driven by line-of-business (LOB) leaders’ needs
We are seeing a major shift in technology purchasing power from IT to LOBs. In fact, according to IDC, the business-funded technology spend will surpass that funded by IT leaders by 2023. As LOB leaders are more involved in decision making, customer transformation and operations transformation, we are witnessing LOBs require curated data to support their analytics and insights. This makes it even more important to include technologies such as analytics and AI in overall business strategy underpinned by data. With both the IT and LOB stakeholders involved from the beginning, businesses will save time and money when designing a growth strategy.
CaixaBank, a major banking group in Spain and Portugal serves a 70.6% digital customer base. The company has focused on digital transformation to transition into a digital bank. Caixa partnered with IBM to deploy a Salesforce platform that helped efficiently manage the contact center, unify customer service channels and unify their technology platform — all with a focus on improving user experience for customers and agents. As the world is becoming hyper-digital, such customer transformation are increasingly being owned by LOB leaders.
Rapidly evolving technology makes it challenging for businesses to determine where to start and what role that technology should play in their growth strategy. In the race to innovate and drive sustainable growth, organizations must focus on leveraging technology within the context of industry, domain and role.
They must shift from deploying technology for technology’s sake, but rather make technology part of their overall business strategy within these three contexts. Businesses must structure their IT to move from a focus on cost cutting to a strategy around growth and value creation. In this new world, companies will come to rely not only on their IT departments, but on a new breed of strategic ecosystem technology partners to help them navigate new imperatives. These strategic partners can support the synthesis of strategy enabled by analytics, data, complex technology integration and business-transformation capabilities to drive industry-transforming human experiences.