Trends and Predictions 2020: Digital Transformation

Stephen DeAngelis

January 08, 2020

For a number of years, business analysts have argued companies founded on and operating using Industrial Age principles and practices need to transform into enterprises better suited for the Digital Age. Although each company’s digital transformation journey will be unique, each must have a basic understanding of the Digital Age landscape. Analysts at Asti Infotech ask, “What are the digital transformation trends for the upcoming year?”[1] They observe, “There are plenty of digital trends to be taken into account, but a few main transformations are crystal clear. These digital trends are not only for large corporations or start-ups. It is the way of life for businesses to survive in the next decade.” Digital transformation involves more than buying digital technology. During a 2017 conference, Tricia Wang (@triciawang), a self-described Tech Ethnographer & Sociologist, told participants, “A lot of companies treat digital as if they are ‘doing digital’ — this is ‘digitization’ at its worst — as if it’s some checklist of things to do. It’s very transactional, and people are so busy doing digital they don’t even know WHY they are doing it in the first place! Whereas [some companies] embrace ‘being digital’ — this is ‘digital transformation’ at its best — it’s a total paradigm shift in the culture and operations — it’s not just about buying the latest digital tool, but about creating a new system, new cadence, new mindset.”[2]

Because it involves a “total paradigm shift,” digital transformation is more difficult than many business executives realize. Daryl Plummer, a fellow at Gartner, explains, “Through 2021, digital transformation initiatives will take large traditional enterprises on average twice as long and cost twice as much as anticipated.”[3] He adds, “Business leaders’ expectations for revenue growth are unlikely to be realized from digital optimization strategies, due to the cost of technology modernization and the unanticipated costs of simplifying operational interdependencies. Such operational complexity also impedes the pace of change along with the degree of innovation and adaptability required to operate as a digital business.” Although digital transformation often focuses on technology, Vala Afshar (@ValaAfshar), the Chief Digital Evangelist for Salesforce, asserts, “All digital business transformations must begin and end with improving the stakeholder experience in mind. Company stakeholders are employees, customers, partners, and the communities [they] serve.”[4]

Digital transformation trends

Improved customer experience. Digital enterprises are data- and demand-driven and focused on customer satisfaction. Afshar reports a MuleSoft survey concluded, “Organizations need to solve for increasing pressure on IT to open up bandwidth for delivering connected, personalized experiences for their consumers — from customers to partners to employees to developers. … Consumers expect consistent journeys across multiple channels including messaging services and mobile service portals. Omnichannel customers spend 10% more online than single-channel customers. A connected experience means removing friction in the customer journey, and being accessible anywhere, anytime.”

Integrated, data-driven processes. According to the MuleSoft survey, “Unlocking and analyzing data is at the heart of digital transformation. Businesses are putting their data to work to improve customer experiences, streamline operations, and quickly launch new products and services. Eighty-three percent of IT decision-makers report data silos create business challenges in their organization. The research shows that breaking down data silos is positively correlated with a company’s performance.”

Growing investment in artificial intelligence and machine learning. Afshar writes, “Organizations are increasingly investing in AI capabilities to expedite and personalize customer service, reduce human bias, and increase productivity. They are learning that the value of AI and machine learning tools are dependent upon the data they are fed.”

Multi-cloud environments. According to Afshar, “Most enterprises today run on multi-cloud environments, but managing multiple clouds is complicated, specifically when it comes to moving application workloads between cloud environments.”

Digital transformation predictions

5G will go mainstream. Fifth generation (5G) telecommunications technology holds great promise in many areas. Daniel Newman (@danielnewmanUV), a principal analyst at Futurum Research and CEO of Broadsuite Media Group, predicts, “2020 will be the year of 5G. … In addition to bringing us all faster broadband speeds and more reliable mobile networks, the proliferation of 5G will also accelerate advancements in smart city, smart vehicle, smart manufacturing, and scores of IoT-intensive technologies hungry for 5G.”[5]

The impact of the Internet of Things will continue to grow. Gartner predicts the Internet of Things (IoT) will have an “overwhelming impact.”[6] Asti Infotech analysts note, “The [IoT is the] smart technology that allows [companies] to collect and share the data in fraction of seconds. IoT has become a mainstream topic in the world of technology and holds the future of technology as well.”

Automation will continue to mature. According to Ross Winser, a Research Director in Gartner’s Infrastructure and Operations Leadership group, implementation of automated technologies has been too haphazard. He predicts, “By 2025, top performing leaders will have employed a dedicated role to steward automation forward and invest to build a proper automation strategy to get away from … ad hoc automation issues.”[7] According to Newman, robotic process automation (RPA) will catch “a second wind.” He explains, “Robotic Process Automation isn’t new, and is widely considered to be the lowest hanging fruit on the AI tree, but it is nevertheless a very hot topic. … 2020 will be a very big year for RPA.”

Advanced analytics become a corporate differentiator. Newman predicts, “Companies that still aren’t investing heavily in analytics by 2020 probably won’t be in business in 2021.” His prediction might be a bit harsh, but his prediction echoes the sentiment of many analysts who believe advanced analytics are required for companies to maintain a competitive advantage. Asti Infotech analysts agree. They write, “The demand for Big Data Analytics is growing tremendously. [Advanced analytics help] organizations to make informed and accurate business decisions with ease.”

AI and machine learning become ubiquitous. Newman asserts, “If you are going to invest in analytics, you also need to invest in AI and machine learning to be able to navigate the vast, churning seas of information and data you aim to put to good use. The value of AI and machine learning to data analytics can be distilled into three separate value propositions: speed, scale, and convenience.”

As-a-Service offerings expand. Companies are finding the best way to remain current and reduce costs is to subscribe to Software-as-a-Service and Solution-as-a-Service programs. These programs have become so popular the term Everything-as-a-Service (XaaS) is catching on. Newman predicts, “Everything-as-a-Service will gain even more momentum in 2020 than it did in 2019.” Asti Infotech analysts add, “Using XaaS organizations/companies can avoid bearing capital expenditures by renting computing services from a cloud provider.”

Edge computing increases in importance. Asti Infotech analysts predict, “Edge computing will be an exciting digital trend by 2020. The technology can be used in remote locations with no limit or connectivity to the centralized location which helps to access time-sensitive data with ease. Localizing data at the edge can significantly minimize the traffic latency and improve user experience without delays. [Edge computing] can increase the use of the Internet of things devices and become the mainstream of digital transformation in the upcoming years.”

We stand on the threshold of a connected world. The world is already highly connected, but Newman predicts, “Connected vehicles, autonomous drones and Smart Cities [will] become our new reality. … The combination of edge comput[ing] and 5G will bring us significantly closer to truly autonomous cars, drones, and smart(-ish/-er) cities in 2020.”

Concluding thoughts

Like any list of trends and predictions, this one is representative rather than exhaustive. The bottom line is that digital transformations will continue to occur (probably at an increased pace). Cognitive technologies will play a fundamental role in new and ongoing transformations. Business leaders will find corporate culture and human resistance the greatest challenges to digital transformation.

Footnotes
[1] Asti Infotech, “What are the top 10 digital transformation trends for 2020?Quora, 13 November 2019.
[2] Trevor Miles, “Let’s be clear: Digitization is not the same as Digital Transformation,” Kinaxis Blog, 8 December 2017.
[3] Michael J. Miller, “Gartner: Top 10 Strategic Predictions for 2020 and Beyond,” PC Magazine, 25 October 2019.
[4] Vala Afshar, “Top 7 digital transformation trends shaping 2020,” ZDNet, 29 October 2019.
[5] Daniel Newman, “Top 10 Digital Transformation Trends For 2020,” Forbes, 14 July 2019.
[6] David Weldon, “Gartner identifies 10 top trends impacting infrastructure and operations for 2020,” Information Management, 13 December 2019.
[7] Ibid.