There may be no hotter topic in the business world than the idea of digital transformation. We are awash in stories of 5G, AI, machine learning, the cloud and the hybrid cloud, and how this digital revolution is transforming consumer behaviors, businesses and governments. Most of the discussion tends to be forward looking, so let’s take a look at the state of digital transformation today.

What is Digital Transformation?

Digital transformation is the adoption of digital technologies designed to fundamentally change or create new processes, deliver value to customers, improve efficiencies, and drive innovation. Digital transformation is also marked by a cultural change within an organization that fosters experimentation, a comfort level with failure and a predisposition to constantly questioning the status quo.

How Digital Transformation is Playing Out

Unquestionably, the coronavirus pandemic sped the pace of digital adoption as businesses, large and small, struggled to adapt to a radically altered environment. The share of companies that had mature digital plans, investments and innovations in place soared from 23% in 2018 to 39% in 2020, while the proportion of companies with very few investments or tentative plans fell from 30% in 2018 to 13% in 2020, according to a survey by Dell Technologies.¹

This same survey found that 80% of businesses fast-tracked at least some digital transformation initiatives in 2020, though a smaller share (41%) accelerated all or most of their programs.²

The top five programs that were expedited were:

1. Strengthening cybersecurity defenses
2. Introducing broader working-from-home or remote-working capabilities
3. Revamping the digital experience for customers and employees
4. Using data in new and different ways
5. Changing services and consumption models

Examples of Digital Transformation in Action

Few may see Domino’s pizza as a digital leader, but this company has developed technology that allows customers to order pizza on multiple devices and track the progress of their online order, as well as employs AI and machine learning to improve product quality and support its store and online operations. It has also started using drones and autonomous vehicles to deliver pizzas.

Another example is Estonia, which revamped its family benefit service, eliminating the need for parents to apply for benefits upon the birth of a child. Estonia’s Social Insurance Board now completes applications and calculates benefit amounts automatically by obtaining data directly from sister agencies related to new births and their parents. This process then requires a parent to confirm the information’s accuracy; once done, the benefit payments are transferred immediately to the parents’ bank account, reducing a two-hour process to 30 seconds.

Digital transformation is still only just beginning. While many strides have been made the last two years of the coronavirus pandemic, there’s much more in store going into the future.

Sources:

1. https://www.delltechnologies.com/en-us/perspectives/digital-transformation-index.htm#pdf-overlay=//www.delltechnologies.com/asset/en-us/solutions/business-solutions/briefs-summaries/dt-index-2020-executive-summary.pdf
2. IBID

Please reference disclosures: https://blog-dev.americanportfolios.com/disclosures/