The absence of a strategic vision is one among the major challenges preventing companies from implementing digital transformation (DX) goals, says Frost & Sullivan in its latest report on DX in Pharma industry.
While implementing the technologies, CIOs at companies tend to focus on near-term goals. Given that the returns from tech investments grow exponentially over time due to macro-environment changes, these firms need to focus on creating a long-term strategic vision across multiple functional areas, says Frost & Sullivan.
Meanwhile a recent Deloitte report found that businesses plan to invest heavily in digital transformation, but their efforts are hampered by strategic and operational paradoxes. Specifically, there are disconnects between organizations’ plans and actions in four areas: strategy, supply chain transformation, talent readiness, and drivers for investment.
One of the problems associated with this paradox is that organizations mainly view DX as a “defensive” investment to protect, rather than grow their business. Hence, their investments are primarily driven by productivity improvement and operational goals and are not necessarily associated with revenue growth resulting from the product/business innovations.
“Digital transformation is not a one-size-fits-all process. Organizations are striving for balance between improving current operations and unleashing the transformative capabilities afforded by Industry 4.0,” says Mark Cotteleer, managing director of Deloitte’s Center for Integrated Research.
“To successfully align planning and investment with action, digital transformation should be baked into an organization’s strategic outlook and operational framework. Those best equipped for Industry 4.0 will fully embrace the transformative potential of technology at every level of the organization,” Cotteleer added.
Digital transformation, in essence, is not the end goal. It is a continuous journey where technology plays a significant role in enhancing the business values in the following ways:
# Boost productivity through innovation
# Improve operations
# Enhance customer experience
# Reduce Capex / Opex
# Address security risks / frauds
All of these outcomes contribute directly to boost ROI and improve bottom line.
Major technologies that impact the DX in organizations include Artificial Intelligence (AI), Big Data Analytics, IoT, Blockchain, Cloud and Virtualization.
The DX efforts in the coming days, should therefore, focus on how to integrate these technologies to improve the overall business value chain. The strategy should revolve around the Golden Triangle – People, Process and Technology.
Organizations today leverage big data analytics and AI to predict customer behavior and campaign outcome (based on a historic/current trend), so they can improvise their strategies to target the untapped segment and improve on the existing ones. As organizations strive to become data-driven, the scope of these technologies is set to rise further.
AI-based tools can be used to detect fraudulent behavior in different types of transactions. The intelligent algorithms are capable of detecting even the new type of frauds as they emerge, eliminating the concerns faced by BPOs, telecom operators and big enterprises about the unanticipated frauds.
AI can improve supply chain process by reducing the time to market. For example, in Pharma industry, AI, in combination with augmented/virtual reality (AR/VR), is assisting the drug discovery and development. With smart algorithms that can predict the outcomes faster and with more accuracy, the drug discovery process becomes faster and more efficient. In fact, the drug discovery time can be reduced from several years to a few months.
The developments in IoT are likely to impact the way data is governed and managed. With IoT, organizations can capture high-quality data in greater volume quickly and thus accelerate decision making. With greater security controls, IoT will also ensure integrity to the data.
Cloud is the key enabler of digital transformation in small and mid-size organizations. The attractive opex-based proposition still makes Cloud a top technology driver in most organizations enabling them to develop, deploy and scale several advanced technology components within their minimal budget.
Blockchain, the emerging component in the DX mission, is impacting almost all the industries. Thanks to the cryptographic digital identity, blockchain technology can ensure transparency across transactions of any size and volume, so it can be used across a wide range of applications that demand security and integrity of data.
Since the challenges in DX are likely to continue and reappear in new forms, organizations need to devise a strategy that suits their specific requirements. In general, the DX strategy should address all aspects of the business: Product, Customer, Operations, Risk and Revenue.
More importantly, it should engage all stakeholders – not just the CIO, but the CEO, COO, CMO, CDO and CSO. Last, but not the least, it should be capable of building a transparent and democratized information access system across all departments. In other words, the technology that is implemented should be simple and accessible across all levels of workforce.