Digital Transformation Trends for 2023

The arrival of the Coronavirus caused a seismic shift in the digital landscape and the demands on every industry’s digital capabilities as much of our lives shifted online. 

In terms of digitization, much like the pandemic, changes happened across the globe, impacting just about every industry. However, the shifts we saw do make it a bit easier for us to take a look at what we expect in 2023, in terms of trends, and how those trends will impact data centers.

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What is a Digital Transformation?

Digital transformation is the process of adopting new technologies to help grow, transform, or change your business or its services. Typically, this digitization includes the replacement of procedures or processes that, in the past, have been handled by team members or outdated technology that no longer meets the needs of the business or its customers.

Also Read: Data Center Migration Best Practices

5 Benefits of Digital Transformation

Obviously, dealing with outdated technology is no fun. Ask anyone who’s still got a VCR or maybe even a DVD player. More often than not, these technologies take up more space, require more resources, and more maintenance, and in general create issues you can avoid by updating your technology. That said, it’s important to outline other potential benefits of initiating a digital transformation at your organization.

1. Improved Data Collection

It’s no secret that big data, and data collection, are the coin of the kingdom these days. Updating the mechanisms and methods by which you collect data, and ensuring you’re collecting the right data, allows you to complete a more thorough analysis. With outdated data collection methods, your team may have to sift through a lot of database information that’s just not valuable and doesn’t drive your strategy forward.

2. Improved Customer Insight and Experience

In tandem with that improved data collection comes your ability to really analyze who your customers are, what they need, what they want, and how your business or service can fulfill those needs. That customer-centric approach improves your customer’s experience across all interactions with your organization, improving their satisfaction, and your efficiency. In fact, 70% of business leaders who participated in digital transformation initiatives reported increased customer satisfaction.

3. Improved Resource Management

Dealing with legacy systems and software is time-consuming as is dealing with outdated equipment. A digital transformation enables your team to spend less time developing strategies to integrate, or worse repair, outdated systems or technologies. Further, these updates will increase the speed and efficiency of software and applications improving your services externally. Internally, it means your team is free to work on other important business initiatives.

4. Improved Collaboration and Communication

With updated software and applications, your team is better able to communicate and collaborate. Whether that means new software or just updated hardware that increases the speed and efficiency of those communications, digital transformation can mean alignment on projects and more effective tracking of progress. In other words, digital transformation means improved productivity.
However, that communication goes well beyond your internal team. Digital transformation, especially in 2021, will improve the way you communicate with your customers as well.

5. Increased Profits

While many may look at the initial expenditure required for a digital transformation, it pays off in the end. 80% of organizations who initiated a digital transformation saw profits increase. 23% anticipate further growth. 85% say it has improved market share. The growth you’ll see won’t just be in productivity or communication, it’ll be in the bottom line as well. 

Best Practices for Achieving a Successful Digital Transformation

Digital transformation has the potential to change your organization internally and externally and comes with significant benefits. That said, there will also be challenges. Therefore, before initiating big changes, it’s important to consider an implementation strategy and how to make the transformation smooth and successful.

1. Get Buy-In

As mentioned, there’s a cost here, so buy-in from a C-Suite level executive, if you’re not one yourself, is key. It’s a huge initiative and one that could be transformative, but it will come with pushback and with individuals who will, likely, prefer to focus on the challenges. It’s not just a technology shift, it’s a shift in how your organization looks at its future. That’s a fairly sizable initiative and one that requires a champion.

Further, it’s not enough to get excitement from the top down. Some of the biggest changes in the world come from an exciting base and that’s your co-workers, colleagues, and the individuals who’ll be using that technology. For both your C-Suite executive and your colleagues, it’s worth noting that, in addition to the increased revenue, digital transformation also improves productivity. The increase in collaboration and communication will result in a more efficient work environment, creating the kind of team culture that keeps workers happy.

2. Establish Clear Goals

Obviously, you shouldn’t be leading the charge on this transformation only for the sake of keeping up with your industry’s version of the “Joneses,” though that may be one driver. It’s imperative that you establish, among your team, the goals of this project. Only through goal setting will you be able to identify milestones, measure both incremental and final successes, and determine whether there are additional areas where this type of initiative would be beneficial.

Further, you want to make sure the goals are clearly established and agreed upon. Alignment on this ensures progress can be made on multiple initiatives at the same time, each team working together, and moving without friction, to reach that endpoint.

3. Business Goals Come First

One of the primary reasons establishing goals is so essential is because it’s easy to get caught up in a wave of tech excitement, marveling at the potential and the possibilities. In fact, it’s so easy to get caught up in that moment that you overspend on the technology you won’t use fully or won’t use fully for years to come. As a result, you’ll reduce or, in some cases, eliminate the ROI.

While it’s a great idea to have some key IT leaders on any digital transformation initiatives team, it’s even more important to make sure those individuals are balanced with executive leaders whose eyes are also on the strategic and financial goals of the business.

4. Keep Everyone Apprised and Aligned

As one can imagine, a project like this will entail just about every department within your organization. For that reason, ensuring that everyone knows what’s happening and when it’s happening (and when it needs to be completed) is vital. In some cases, aspects of this project may require the same teams, and resources, and some may need to happen simultaneously. Keeping everyone aligned and informed will keep things running smoothly.

5. Enable Employees, Partners, and Customers to Evolve With You

Part of your strategy for #4 should absolutely include your customers, partners, and any employees who are not actively part of the project (though hopefully they’ll all be updated!). Perhaps one of the most important customer service elements many companies overlook is communication. Whether it’s a change in a service or a product, a failure to communicate may result in a long-lasting impact.

Obviously, the same is true for partners and employees, particularly when technological changes may directly impact their jobs, their processes, or the way they provide their services. This is even more of an issue if that partner is someone who provides you with tech services, be that an application or service.

You want to ensure the changes improve your business, streamline services, and accelerate productivity. The only way to do that is to launch a successful initiative and enable everyone involved to transition smoothly. Successfully communicating change is a fundamental part of any change management.

6. See Digital Transformation as a Marathon, Not a Sprint

Digital Transformation is not a one-time event. It’s a process. If you see it as a project with a completion date and not as an ongoing process that you’ll need to monitor, evaluate, and revisit, you may run into problems. Part of your process should include monitoring KPIs and ensuring alignment across the teams working on these initiatives. While some areas may be successful right from the start, others may need fine-tuning and tweaking to see the results you’re after.

Also Read: What Is Employer Branding?

Digital Transformation Trends in 2023

2023 may see some of the biggest leaps in the digital transformation we’ve seen in quite some time. While many industries were already looking at significant growth in this regard, the Coronavirus forced the hands of many who were, pardon the mixed metaphor, dragging their feet. In fact, one of the biggest challenges facing industries today has been the speed with which some of these transformations were needed.

1. The Rise of the Chatbot

As more conversations and customer service interactions were forced online, industries from healthcare to retail, some of whom were already using chatbots, quickly realized the value of this technology. By 2024, experts predict a 29.7% growth rate in the industry totaling $9.4 billion dollars. From marketing and customer service to payments and processing, chatbots can improve customer experience, cut costs, and provide 24/7 access to your company. 

2. Digitization of Supply Chain Tracking

There are few industries that remain untouched by the lessons of Covid-19, but one of the most profoundly impacted is the manufacturing industry. Prior to 2021, many businesses reliant on global supply chains were reluctant to make the shift to digitized tracking. However, the failures that saw empty shelves and product shortages mean more companies are willing to invest in more sophisticated inventory management and forecasting capabilities. As a result, you’ll see more businesses shift to digital technologies like barcoding and radio frequency identification (RFID) which enables track and tracing through the entire chain. 

3. Contactless and Virtual Interactions

Much like the chatbot, anticipate that across industries and marketplaces, the desire for contactless interactions will increase. In fact, Deloitte found that in early 2020, searches for “contactless” grew 7x and stocks for companies supplying those technologies were skyrocketing.

A great example of an industry experiencing an increased push for contactless interactions is healthcare. From payment processing and checking in, hospitals and doctor’s offices have enabled patients to use their own phones rather than high-touch kiosks. Further, expect growth in telemedicine as well as drive-thru care, prescriptions, and testing.

Further, a topic of much discussion across all business sectors is the drive for work-from-home or remote work options. In fact, it’s expected that more than 25% of workers will work from home in 2023, with an increase in that number of nearly 87% by 2025. With that growth will inevitably come greater access to digital tools and resources to improve the experience and security of doing so.

4. Expansion of 5G, Data Centers, and Cloud Technology

With the shift to digital experiences, workplaces, interactions, and communication, many businesses will need to upgrade their capabilities, scale existing infrastructure, and rely upon fast and reliable communication, the kind that only 5G will support.

A few years back, many cities were moving slowly on 5G implementation, but much of the digital transformation across cities and businesses will require an upgrade to handle the data.

Similarly, fast-forward digitization is expected to impact the data center industry as well. With more businesses relying on remote work, file sharing capabilities, on data security, the natural progression for many of them, in terms of cost and compliance, will be to turn to the cloud. In turn, data centers that can handle the reliability, response time, and scalability many will need, will benefit as well.

5. Increase in Omni-Channel Sales

Perhaps one of the biggest changes we’ll see in the retail sector is the alignment of online and brick-and-mortar sales/inventory. In the past, retail stores have struggled with inventory management and overselling items because the online channel was not connected to the same point-of-sale system. Failure to utilize a system that is inclusive of all sales channels creates a multitude of issues for retailers and wholesalers alike. However, in 2021, expect to see the digitization of inventory systems and enterprise resource planning solutions that capitalize on all of the technologies listed above like 5G, cloud, and edge computing.

Ruben Harutyunyan

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