For years, business experts have encouraged companies to transform into digital enterprises. Technology writer Kaiti Norton (@KitKatKaiti) explains, “Digital transformation (DX) has been a buzz word in IT circles for years, and it’s expected to play an even bigger role in enterprise planning in 2022 than ever before. It’s easy to understand why — enterprises on the digital transformation journey generally experience better efficiency, more productivity, and reduced operating costs aside from other benefits.”[1] A nationally-focused study published by SAP Canada and IDC Canada concluded, “Digital transformation will be the most valuable business investment Canadian companies can make as they enter 2022.”[2] Many business experts have concluded this is true for companies around the globe. And, according to the staff at MHI, “Digital technologies and tools are table stakes. … The days of siloed technologies are over; value will come from applying and integrating multiple sets of solutions.”[3] Below are some of the digital enterprise trends organizations can expect to see in 2022.
Digital Enterprise Trends
Change Managers Become Essential. The MHI staff notes, “While it can be unsettling and difficult to enact, change also delivers opportunity. Companies that adopt this new digital course will be best positioned to take advantage of the coming opportunities.” Change has never been easy. Centuries ago, Niccolo Machiavelli, in his classic The Prince, wrote, “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.” Someone needs to lead the charge; nevertheless, change managers will have their hands full when they embark on a digitalization journey.
Digital Transformation Investments Will Pay-off. Technology journalist Charles McLellan (@charlesmclellan) writes, “After years of being promoted, piloted and implemented with varying degrees of urgency and success in organizations, [during the pandemic,] digital transformation enabled a rapid pivot to remote working and put the digitization of business processes, including customer and employee experience (CX and EX), to a serious stress test.”[4] Did digitization pass the stress test? McLellan reports, “Market research firm Computer Economics described technology’s role in the rapid recovery from the pandemic as ‘nothing short of a miracle’.” As a result of this success, IDC predicts, “Direct digital transformation investments [will] accelerate to a 16.5 percent CAGR in 2022-2024, up from a 15.4 percent CAGR in 2019-2024, becoming 55 percent of all ICT investment by the end of 2024.”[5]
Hybrid Work Becomes Permanent. Businesses capable of adopting a hybrid work model during the pandemic often fared better than those that couldn’t. As a result, IDC analysts predict, “By 2023, 90 percent of organizations worldwide will prioritize investments in digital tools to augment physical spaces and assets with digital experiences.” Vala Afshar (@ValaAfshar), the Chief Digital Evangelist for Salesforce, predicts, “The future of work will be built on connected, hybrid experiences. The workplace has rapidly evolved, and with it, employee expectations — forcing organizations to deliver digital‑first and connected experiences to drive productivity and retain talent.”[6]
Agile Businesses Gain a Competitive Edge. Companies capable of pivoting during the pandemic found themselves better able to adapt to challenges and take advantage of emerging opportunities. IDC analysts predict, “By 2025, 60 percent of organizations will capitalize on disruption with an enterprise- and ecosystem-wide approach to automation, leveraging model-based enterprise concepts, centers of excellence (COEs), and low-code/no-code platforms.” Afshar adds, “As the pressure to innovate faster continues to rise, organizations will seek even greater agility, leading to an increased drive to composable and event‑driven architectures.”
Intelligent Automation Goes Mainstream. Norton writes, “Analytics have powered much of the innovation of the last decade. It tells us what happened, explains why it happened, and predicts what will happen in the future. When combined with automation, we can move past descriptive and predictive analytics toward prescriptive guidance.” Ashley Kramer (@ashleyekramer), chief product officer and chief marketing officer at Sisense, told Norton, “Artificial intelligence combined with automation will finally make [prescriptive activities] possible by dynamically combining relevant data and alerting knowledge workers to take action, in advance, before an event occurs.”
Digital Twins Become More Common. Business leaders would love to have a crystal ball informing them about what the future holds. Since no such device exists, many business leaders are turning to the next best thing: creating a digital twin for their business. The staff at Analytics Insight note, “The digital twin is a digital representation of any physical object, product, process or service in the physical world. Industries can use the digital twin to replicate processes and research to collect real-time data from trial-and-error methods. It is a computer program that can integrate IoT, Artificial Intelligence as well as software analytics to improve the outcome.”[7] Digital twins allow companies to leverage “try it before you buy it” decision-making strategies.
Resiliency Becomes a Top Priority. The pandemic underscored how important resiliency is for any organization. IDC analysts predict, “By 2022, 55 percent of organizations will have expanded resiliency plans to future-proof their business, improving profitability, innovation rates, and cost efficiencies by more than 20 percent compared to their peers.” For many organizations, better resiliency means more automation. Afshar predicts, “Hyperautomation will unlock productivity, accelerate time‑to‑market, and transform employee and customer experiences.” Afshar realizes, however, that digitization brings with it inherent cybersecurity risks. As a result, he notes, “Security‑by‑default will become a need‑to‑have as organizations increasingly realize their applications and automations are only as secure as the composable blocks on which they are built.”
Digital Products and Services Increase Revenues. According to IDC analysts, “By 2023, 1 in 2 companies will generate more than 40 percent of their revenues from digital products and services, as compared to 1 in 3 in 2020.” During the pandemic, lockdowns and fears of contracting COVID-19 meant that many consumers went online to make their purchases. Omnichannel strategies became essential for retailers. Norton notes, “Customers effectively want the same experience when interacting with a business whether they choose to do so online or in person. To meet this demand, organizations should have a clearly defined omnichannel strategy and a consolidated, streamlined view of their customer data.”
Concluding Thoughts
The sine qua non for digital transformation is data. In a separate, future article, I will discuss big data trends. However, when it comes to understanding digital transformation, business executives need to understand their focus should be more on “transformation” than on digital. Tricia Wang (@triciawang), a self-described Tech Ethnographer & Sociologist, explains, “A lot of companies treat digital as if they are ‘doing digital’ — this is ‘digitization’ at its worst — as if it’s some checklist of things to do. It’s very transactional, and people are so busy doing digital they don’t even know WHY they are doing it in the first place! Whereas [some companies] embrace ‘being digital’ — this is ‘digital transformation’ at its best — it’s a total paradigm shift in the culture and operations — it’s not just about buying the latest digital tool, but about creating a new system, new cadence, new mindset.”[8] I agree with the analysts from SAP Canada and IDC Canada that the most important investment companies can make in 2022 is in digital transformation. And those investments must address people, processes, and technology.
Footnotes
[1] Kaiti Norton, “Top 6 Trends Shaping Digital Transformation in 2022,” IT Business Edge, 17 December 2021.
[2] SAP Canada, “Digital Transformation will be the Most Valuable Business Investment for 2022,” Cision, 7 December 2021.
[3] Staff, “5 Findings in the Transformation Age: Shaping Your Future Roadmap that Will Surprise You,” MHI Blog, July 2021.
[4] Charles McLellan, “Digital transformation is changing. Here’s what comes next,” ZDNet, 1 October 2021.
[5] Staff, “IDC’s digital transformation predictions that will impact ICT spending,” Infotechlead, 31 October 2021.
[6] Vala Afshar, “Top 7 trends shaping digital transformation in 2022,” ZDNet, 3 November 2021.
[7] Staff, “Top 5 Trends of Digital Twin That are Transforming the Industry,” Analytics Insight, 2 December 2021.
[8] Trevor Miles, “Let’s be clear: Digitization is not the same as Digital Transformation,” Kinaxis Blog, 8 December 2017.
