How is digital transformation taking place across sectors?
- The global digital transformation market size is expected to hit US$1009.8 billion by 2025
- Innovation is spurred by the need to overcome pandemic-induced challenges and increase efficiency in operations
Digital transformation may be a buzz word in the tech realm, but it’s unique and personal for each organization. The concept differs from one company to another. Regardless of the similarities that each organization shares, innovation brings a different meaning to each one individually, and its implementation is — by default — unique in every instance.
The global coronavirus outbreak has certainly pushed organizations to adjust and revamp their digital road maps. A majority of enterprises were driven to find ways to smoothen out and transition to employee teleworking, as stay-at-home mandates came into full force.
Microsoft’s CEO, Satya Nadella, has nicely summed up this phenomenon: “We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning to sales and customer service to critical cloud infrastructure and security — we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything.”
In April, the tech giant saw “more than 200 million Microsoft Teams meeting participants in a single day, generating more than 4.1 billion meeting minutes.” This is just one example of the scale of adoption of cloud-based collaboration and videoconferencing tools amid the pandemic.
The global digital transformation market size is expected to grow from US$469.8 billion in 2020 to US$1009.8 billion (or more than US$1 trillion) by 2025. That’s just five years.
Without a doubt, companies are recognizing that they need to innovate and innovate rapidly in light of the disruption caused by the global pandemic. Deloitte found that C-suite members talked a lot about innovation in the early months of the coronavirus outbreak, with half of earning calls including the mention of the term “innovation.”
The Big Four accounting firm also found that the focus of companies’ innovation efforts led by the pandemic varied across industries. The industrial landscape echoes ongoing trends, new challenges, consumer demand, and future needs.
Research from Deloitte found that consumer-facing companies are drawing their attention to e-commerce more often, providing a boon to online commerce as social distancing becomes the new norm. A report by C+R Research revealed that more than half (60%) of US shoppers are afraid of shopping in grocery stores due to the pandemic, and 73% are shopping less in person.
The changing landscape saw brick-and-mortar shops with shut shutters and retailers scrambling to migrate their storefronts to the clouds. Forrester estimates that the US retail sector will experience a loss of US$321 billion this year as compared to gross sales from 2019.
Global supply chains also recently received a massive blow when the once interconnected routes across oceans were widely disrupted with borders closing and opening simultaneously, and movements severely regulated. Disconnected supply chains have led to companies moving manufacturing and production back on-shore. However, the cracks of once globally connected supply chains have encouraged enterprises to seek tech-inspired solutions.
Quantum computing is one solution that promises to strengthen supply chain management. The technology poses new capabilities that can power real-time traffic simulations and enhance logistics route planning and scheduling. AI and blockchain are also on board to remove blind spots in supply chains and utilize predictive models to help manufacturers and suppliers mitigate unprecedented events such as a pandemic.
The consulting firm Deloitte also noted that financial services and insurance companies were mentioning risk management more often. The finance industry is set to capitalize on emerging technologies such as AI to various aspects, including cost reduction, revenue generation, customer service, and risk management.
The World Economic Forum (WEF) and Cambridge Centre for Alternative Finance (CCAF) found that 64% of financial services leaders expect to adopt AI massively within the next two years, outgrowing the 16% doing so today. With the support of AI in number crunching and data analysis, finance leaders can advance from possessing the knowledge and numbers to taking actions.