With digital transformation becoming the watchword of the first half of the 21st century, what is the outlook on this trending topic now and in the future?
Indeed, if your business is not going through some form of digital transformation, you may be left behind by your competitors.
Keeping the digital transformation train running needs good intelligence. But what are the drivers, trends, and risks like in 2019 when you decide to transform your business processes?
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One of the key benefits of a digitally transformed business process is revenue enhancement.
In a book on digital transformation by Westerman and Bonnet “Leading Digital: Turning Technology into Business Transformation”, the authors identify certain organizations as “masters” of digital. When looking at how digital transformation plays out under the control of such masters, they found that those companies were “26 percent more profitable than their average industry competitors.”
However, even with such statistics, digital transformation is still a challenge. A survey by McKinsey found that only 12 percent of respondents considered IT “very effective” at leading digital transformations across their business. Conversely, analysts at the research institute IDC are predicting spend on digital transformation to be $1.2 trillion by the end of 2019.
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Deciding to digitize a process requires a deep understanding of the process itself as well as of the available technologies. New technology candidates and methodologies come on-board regularly, and decision makers need to keep abreast of these.
There are several areas that are being applied to optimize and streamline business processes in 2019.
.1. Blockchain
Blockchain is one of the most disruptive technologies to have appeared since the advent of the internet.
Blockchain is predicted by IDC to be one of the key transformative technologies in the next few years.
One of the areas of focus for blockchain is in supply chain management. IDC has predicted cost reductions when using blockchain-enabled supply chains, in the region of 35 percent.
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Out of the distributed ledger technology of the blockchain come smart contracts.
A smart contract is a program that executes when a condition is met, for example if payment is moved from A to B, then ownership of C is transferred and recorded.
The Institute of Civil Engineers (ICE) has looked at the use of smart contracts in the construction industry. They recognize the benefits of smart contract use across several areas including accuracy in contractual collaboration, compliance, and risk management.
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The discipline which combines development and operations is the lubricant of digital transformation. This collaboration between the two, normally distinct, business areas, is allowing for a more seamless transformation of processes.
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The cloud continues to grow and is being driven by an increasingly remote workforce. This, in turn, drives a need for more online collaboration tools and facilitation of a more flexible working life.
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5. Artificial Intelligence
New transforming technologies create data… a lot of data.
And this data contains the information needed to drive the transformative nature of new technologies. Artificial Intelligence and its subsets, Machine Learning and Deep Learning, are being used to automate business tasks and work with human beings to improve efficiencies.
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In today’s digitally transformed world, companies need to protect their critical data against data breaches and cyberattacks, all while keeping privacy considerations in mind.
Privacy obligations such as GDPR, CCPA and PIPEDA have required organizations to step up their privacy game to demonstrate compliance with mandatory privacy breach notification, reporting and record-keeping.
When keeping up with the rapidly evolving concept of digital transformation, organization will need to be keep the principles of “privacy by design” and “security by design” in mind.
Related Post: 9 Reasons for Data Privacy
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The digitally transformative nature of these new technologies brings opportunities not just for business but for cybercriminals, too.
New tools equal new threats and vulnerabilities that target within a transformed landscape. These threats have serious implications for the stability of our digitally transformed businesses. The threats that could hamper our digital transformation are both cybersecurity and socio-technical in nature.
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1. Data Breaches
There has been a 54% increase in data breaches in the first half of 2019. As business infrastructure becomes increasingly open to allow for online collaboration, vulnerabilities, and gaps likewise open-up.
Many of the latest data breaches, such as the Capital One breach, have been caused by cloud storage misconfiguration. As we transform our working conditions, opening up our organization to cloud apps and freeing up data flow, we must lock down our systems tightly.
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Data is a crucial part of the digital transformation of our businesses. Often these data are highly sensitive and personal. Consumers and legislation like GDPR are pushing back on data privacy violations.
In addition to locking down our systems and infrastructure, we need to be cognizant of consumer expectations and legislative imperatives. If not, major fines and lost consumer trust follow.
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Critical infrastructures, like energy and water, are also being digitally transformed. Systems that were once closed are now hyper-connected.
Critical infrastructures also include the very connectivity that digital business relies upon. Distributed Denial of Service (DDoS) attacks are on the increase; DDoS attacks were up 200 percent in Q1 2019 compared to Q1 2018.
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Digital transformation of business working practices involves the use of online apps such as collaboration portals. An International Data Group (IDG) survey found that 73 percent of companies have at least one cloud app. Over one-third of organizations are under pressure to migrate fully to the cloud.
Cost-reductions, efficiencies of operation, remote access and inter-company collaboration are fueling this move. The downside is that cloud apps increase the attack surface. In a 2019 Thales survey, 49 percent of respondents felt that cloud apps posed the biggest threat of a cyber-attack.
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The digital transformation train has hit the tracks and is steaming along. Missing that train puts a company at risk of falling behind the competition, amongst other things.
Digital transformation of business processes offers improved efficiencies, more cost-effective ways to use technology, better customer engagement, and can even offer your employees better working conditions. However, it also opens up new channels for cyber-attacks. When we decide to take on a new technology to change the way we work, we must stay aware of the security implications and the risk of using new ways of working.
Change is never easy, and digital transformation brings with it both risk and reward. Managing those risks is part of the digital transformation process as much as bringing on-board new technologies themselves.
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