The term digital transformation has become so ubiquitous that some companies might no longer take it seriously. Making such a mistake can be costly. Deloitte conducted an analysis proving that Fortune 500 companies could unlock up to $1.25 trillion USD in additional market capitalization through the right digital transformation actions. However, the wrong combinations can lead to a loss of market value, putting more than $1.5 trillion USD at risk.
Without the right business mindset and a custom approach to technology solutions, a loss of market share due to a lack of a digital transformation is inevitable, but leaders need to undertake this journey, as the global digital transformation market size was evaluated by analysts at $731 billion USD in 2022 and is anticipated to witness a CAGR of 26.7% from 2023 to 2030.
Since it’s widely accepted that digital transformation services are crucial to maintaining a competitive edge and sustained revenue models for businesses, the main concern now is determining which technologies companies should prioritize in the coming years.
Digital transformation – six tech trends worth knowing
According to the GSMA Mobile Economy 2023 report, 5G technology will be the foundation for upcoming mobile developments and services. The usage of 5G is expected to increase to 17% by 2023 and reach 54% by 2030, which means there will be around 5.3 billion connections. Undoubtedly, 5G will play a significant part in manufacturing digitalization, the connected vehicle industry and the Internet of Things sector, but 5G plays an essential role in upgrading existing telecommunications solutions, offering speed, connectivity and reliability.
In the coming months, artificial intelligence (AI), machine learning (ML), and natural language processing (NLP) will be at the forefront of digital transformations. Generative AI solutions are becoming increasingly popular and are used to provide excellent customer service, analyze large datasets, and enhance development processes. Many innovative organizations already benefit from AI, which acts as a reliable digital assistant that supports further development and growth strategies, Implementing large language models as part of the digital transformation process will be an absolute necessity in many organizations in the next 2 to 3 years.
Data governance goes beyond simple compliance with regulatory requirements, as organizations need proper data governance to avoid encountering data integrity issues such as duplication and inconsistency. A digital transformation can harness the power of information that remains hidden somewhere in monolithic databases, excel spreadsheets, and even lab notebooks. AI assists in analyzing vast amounts of data and implementing suitable frameworks, which ensure data is reliable and usable. Organizations will achieve successful digital transformation outcomes by prioritizing data governance, which enables them to maximize the potential of AI-driven insights.
According to Check Point’s 2023 Cyber Security Report, global cyberattacks increased by 38% in 2022 compared to 2021. Along with taking advantage of exploits and ransomware attacks, there’s been a significant increase in the number of attacks on cloud-based networks per organization, which shot up by 48% from 2021 to 2022. Experts agree this is a concerning shift. Auditing existing cloud solutions and safeguarding microservices are necessary for any effective digital transformation.
A snowballing amount of data is creating challenges in data privacy, transmission costs, and computational resources. However, a new approach called federated learning can help address these challenges. Federated learning is a decentralized method that allows for model training on a local device, such as a mobile phone or IoT platform, using the data generated by that device. One of the main benefits of this approach is that it does not require raw data to be sent to a central server, which improves data privacy and reduces transmission costs.
Kubernetes and FinOps
While transitioning to the cloud is a concept introduced previously, it can be challenging to do so reliably and cost-effectively – without budgets spiraling out of control. Two trends that can significantly assist in this area are Kubernetes and FinOps. Using Kubernetes operators for cloud deployment and administration provides a standardized approach that reduces complexity and overheads. This leads to improved efficiency and cost savings for organizations. The second trend worth focusing on is FinOps. Integrating it into public cloud settings can cut costs and boost efficiency. By adopting FinOps principles, organizations better understand expenses, reduce costs and enhance financial performance. Using cloud resources productively improves reliability, which leads to increased business value delivery.
CIO – leading the digital change
Chief Information Officers (CIOs) play a critical role in leading and driving digital transformation within an organization. They serve as a strategic leader and enabler of digital transformations, driving innovation, enhancing operational efficiency, and ensuring the organization remains competitive in the digital era.
What are the main responsibilities of a CIO?
Planning digital transformation: Creating a roadmap for a digital transformation with input from business units to ensure technology investments align with an organization’s objectives.
Managing the necessary change: Driving change by ensuring that employees are involved, prepared, and trained to accept and implement new technologies.
Evaluating emerging technologies: Providing guidance on selecting technologies and tools, while identifying tech opportunities that align with an organization’s goals and targets.
Fostering a culture of innovation: Encouraging exploration of new technologies, advocating for collaborative efforts across different departments, and fostering relationships with external technology providers to promote innovation.
IT leaders expect CIOs to lead the way in their organization’s digital transformation. This was confirmed by the State of the CIO survey, which found that 84% of IT leaders believe that CIOs are taking a more active role in leading digital transformation initiatives than their business counterparts.
Digital transformation equals business transformation
“We don’t even use the term ‘digital transformation’, but rather, ‘business transformation,’” said senior Schneider Electric’s vice president and CIO Bobby Cain in an interview with CIO magazine. He added that “In order to transform how you work, the business has to lead the transformation.” which clearly indicates that a digital transformation is more than just about technology, as it requires a significant shift in a company’s mindset, which enables it to unlock the potential of technologies interconnected with a digital transformation. The right dedicated development team, with a proven track record of conducting such transformations, plays a crucial part in the digital journey.
If you want to integrate emerging technologies to boost your performance and modernize your systems to ensure your business stays ahead of the curve, fill out this contact form and contact one of our experts.
About the authorJacek Szmatka
Head of Digital Transformations and Software Consulting
An open-minded leader with over 20 years’ experience in the IT world, Jacek’s career has seen him evolve from a computer science graduate to software engineer to a co-founder and CTO of a tech start-up. Before joining Software Mind, Jacek was part of a team that developed a bioinformatics company and served as an executive board member. In his current role as Vice President of Business Development, Jacek helps leading American and European companies design and build innovative development teams from scratch. A true believer in the transformative power technology can have on our lives, Jacek maintains a keen interest in R & D, in particular with solutions that involve AI, IoT, life science and cloud technologies.