With various global industries spending the past two and a half years navigating the disruption left in the wake of COVID-19, 2022 has seen sectors worldwide face additional challenges with the uncertainty brought about by the Russian invasion of Ukraine.
Despite economic and social uncertainty, organizations must continually innovate and demonstrate business agility by keeping an eye on the latest digital transformations (DX). This includes exploring the four main areas of digital transformation in-depth and understanding how to leverage the total value of your digital technologies.
Gartner forecasts worldwide IT Spending will grow at a rate of 5.1% in 2022 and reach a market value of 4.6 trillion U.S dollars by 2023. The global digital transformation market is projected to be worth 3810.05 billion U.S dollars by 2030, growing at a compound annual growth rate (CAGR) of 23.1% between the 2022-2030 forecast period.
As new technologies emerge, markets fluctuate, and customer needs evolve, digital transformation (DX) initiatives must continually overhaul and modernize business applications to stay resilient. This includes integrating a digital adoption strategy to help organizations remain competitive and agile throughout cycles of transformation.
Artificial intelligence (AI), cloud transformation, and blockchain technology are firmly in the purview of IT executives. Our research consistently shows that these trends innovate business IT processes when deployed. However, what’s most interesting is how these technologies are set to fundamentally impact business in the future.
What Is Digital Transformation?
Digital transformation is the organizational-wide adoption of new technologies—or the improvement of existing ones—to enhance business models and processes. It can be further described as restructuring non-digitized operations by deploying information technologies.
Gartner describes the digital transformation process as “anything from IT modernization (for example, cloud computing), to digital optimization, to the invention of new digital business models. The term is widely used in public-sector organizations to refer to modest initiatives such as putting services online or legacy modernization.”
Amit Zavery, the VP/GM and Head of Platform for Google Cloud, said it best. “Think of digital transformation less as a technology project to be finished than a state of perpetual agility, always ready to evolve for whatever customer wants next, and you’ll be pointed down the right path.”
Whether investing in new digital technologies or developing a digital-first mindset within the organization, businesses embracing a digital transformation will be well-positioned for success in the years ahead.
The Value of Digital Transformation For Businesses
The value of digital transformation is realized through the many applications that contemporary digital technologies offer businesses, some of which include:
- Increased efficiency
- Greater business agility
- Increased productivity
- Higher customer engagement
- Higher revenue and market share
Digital transformation is key for value-creation across industries, its innovative potential serving as a bedrock for many modern business strategies.
Statista reports that global digital transformation spending in 2022 is projected to reach 1.8 trillion U.S dollars and rise to 2.8 trillion U.S dollars by 2025.
Without a strategic shift towards DX, organizations will be left behind as their competitors forge ahead and take advantage of its many applications.
New digital technology is generating business transformation, and industry leaders understand that exploiting these technologies as part of their digital-first approach means keeping an eye on top digital transformation trends.
12 Digital Transformation Trends for 2022 and Beyond
Here are 12 digital transformation trends imperative for future business success in 2022 and beyond:
- Enhanced Cloud Solutions
The increased adoption of cloud technologies and digital platforms has seen organizations turn to cloud solutions as a key tool for improving their digital capabilities and keeping pace with changing market conditions.
Enhanced cloud solutions help facilitate business IT operations by deploying on-demand computational services hosted on remote cloud infrastructure. Cloud solutions eliminate the need for on-site systems by providing storage, computational, network, and software resources accessed via the internet.
This improves operational efficiency by enabling faster and more accurate analytical insights, the ability to scale applications, and better data security. Still, it also helps improve customer engagement through digital marketing tools such as predictive analytics and machine learning.
In 2022, however, the distributed cloud is enabling more efficient business cloud processing power by placing public cloud infrastructure hubs in close proximity to strategic geographic locations.
According to Gartner: “Distributed cloud is the distribution of public cloud services to different physical locations, while the operation, governance, updates, and evolution of the services are the responsibility of the originating public cloud provider.”
Distributed clouds give businesses increased efficiency over their hybrid-cloud applications by bringing storage and processing capabilities closer to data sources. This has helped businesses whose operations require improved location-based services, edge deployment, increased response time, and compliance solutions for legal stipulations such as data localization laws.
The scalability and flexibility afforded by cloud solutions have seen the trend of businesses double down on their cloud adoption efforts by transitioning to cloud-native systems.
According to WalkMe, cloud-native “refers to the idea and application of building and operating systems that take advantage of the distributed computing offered by the cloud delivery model.”
Businesses recognize that cloud solutions are integral for maintaining agile digital transformation. With feverish interest in both cloud-native and distributed cloud models rising, enhanced cloud solutions are now a mainstay in 2022.
- 5G Technology
The fifth generation (5G) of mobile networks will set a new standard as a faster, more stable, and more reliable form of connectivity for the globalized world. 5G has the potential to deliver download speeds of up to 10 gigabits-per-second (Gbps), far outpacing the capabilities of 4G LTE networks one hundredfold.
Gartner forecasted 5G network infrastructure revenue worldwide to grow 39% in 2021. This suggests that 5G will be instrumental in helping accelerate digital transformation initiatives for an array of sectors in the years ahead. making it a key DX trend businesses should watch for in 2022 and beyond.
A few of 5G’s robust capabilities will include faster transmission speeds, lower latency, and increased device density to support large clusters on the network. As it becomes more readily available, 5G will give businesses increased operational capacity while supporting faster data transfers, user-end speeds, and remote workloads.
With the IoT continuing to expand, digital technologies like artificial Intelligence (AI) and robotic process automation underpin it are set to benefit from the increased connectivity 5G offers. Businesses with IoT networks will see a dramatic increase in transmission speeds as 5G will enable communications for up to a million devices per square kilometer.
Investing in systems compatible with 5G technology, businesses can harness its immense power to accelerate business transformation, fastrack efficiency, and increase opportunities for growth.
IT leaders should identify operational pain points that could benefit from 5G solutions while ensuring to launch of a multi-pronged strategy that assesses all verticals in which the technology may drive value.
5G is creating a space for innovation, with new prospective products and services able to actualize due to its low latency and high capacity capabilities. And so, industry leaders must figure out the best strategy for leveraging the volume and speed 5G provides.
More than 90% of surveyed enterprise leaders regard advanced wireless technologies — namely 5G and Wi-Fi 6 — as either “very important” or “critically important” to their business’s success, according to Deloitte’s 2020 Study of Advanced Wireless Adoption.
- Automation & Hyperautomation
Automation is a technique in which system processes are taught to execute commands independently with minimal human input.
Automation allows businesses to streamline operational efficiency and has long been a staple digital transformation trend—impacting industries far and wide long before the renewed interest in modern iterations.
Improvements to automation have come a long way, so much so that the rise of new and improved hyper-automated processes are now making their way onto the radar of IT executives, and our list of DX 2022 trends.
Hyperautomation (digital process automation) can be categorized as a subset of automation—its sophisticated methodology allows organizations to configure, vet and automate IT processes, differentiating it from former frameworks. The term ‘hyperautomation’ was first coined by Gartner in 2019.
Implementing hyperautomation can help businesses optimize processes, and boost organizational efficiency and productivity by completing menial tasks and deploying workloads with minimal risk of human error.
Hyperautomation isn’t a singular technology but a collection of resources that combine robotic process automation (RPA), artificial intelligence (AI), machine learning (ML), and intelligent business process management (iBPMS) systems to deliver complex mechanisms.
Automation and hyperautomation are crucial digital transformation trends to watch in the coming years as businesses look for new ways to take advantage of digital technologies that do all the legwork.
Anything-as-a-Service (XaaS) is a term to describe the delivery of a wide range of services and products, typically by cloud vendors to users over the internet.
XaaS can include software-as-a-service (SaaS), platform-as-a-service (PaaS), infrastructure-as-a-service (IaaS), database-as-a-service (DbaaS), and more.
XaaS cloud services offer businesses storage, security, analytics, and backup and use various products, tools, and dependent technologies to facilitate its delivery.
In addition, XaaS allows businesses to deploy applications faster, scale up or down as needed, and avoid vendor lock-ins that require long-term commitments. This makes it especially well-suited for businesses that have fluctuations in resources and require flexible purchasing options.
As more companies adopt XaaS, we are seeing an increase in competition between vendors. This is leading to rapid innovation as companies differentiate themselves from their competitors and attract new customers. To stay relevant, businesses must clearly understand what XaaS can offer and how to best leverage this technology to improve business outcomes.
Additionally, XaaS can help organizations achieve greater interoperability between various systems and applications by creating a more seamless and unified digital experience for users. This can be especially valuable in enabling collaboration and improving productivity across the organization.
However, some organizations may be reluctant to adopt XaaS due to security and data protection concerns. The cloud model can introduce additional complexity for IT administrators responsible for managing service consumption and delivering performance.
As such, it is crucial to carefully evaluate the potential benefits and challenges of XaaS before moving to this model. With careful planning and consideration, many businesses can leverage XaaS to improve efficiency, increase collaboration, and drive profitability.
- Contactless and Wireless Solutions
With digital technologies such as smartphone wallets and wireless charging gaining in popularity, businesses are embracing similar contactless and wireless solutions as essential tools for successful digital and business transformation.
Contactless refers to the technological enabling of non-physical and contactless operations through near-field communication (NFC) systems. Wireless similarly refers to non-physical data transmissions and telecommunications, except with more emphasis on eliminating the need for wires and physical IT cables.
Touch-free solutions allow for near-instantaneous communication between devices. This is accomplished through radio waves, which work similarly to on-air radio signals.
However, systems operate at much higher frequencies than most modern radios. This has both benefits and drawbacks in terms of range, power requirements, and cost. Despite this, contactless wireless solutions are becoming increasingly popular due to their ability to operate over longer distances with less infrastructure required.
A significant benefit of contactless and wireless technology is that it simplifies the transactional process, allowing businesses to deliver faster, more convenient payment methods for their customers. These no-contact solutions can also help companies to meet regulatory requirements and reduce overhead costs related to financial management.
Both contactless and wireless solutions are technologies widely used in everyday life—e.g., Apple’s touch-to-pay services. Its benefits are undeniable, and businesses are ensuring to adopt the latest developments in the field.
- The Expansion of Artificial Intelligence (AI)
Artificial intelligence truly lives up to its reputation as a technological game-changer. AI’s impact has been felt on the business and wider-social landscape for quite some time, and it remains a primary driver of the latest digital transformation developments.
Gartner defines artificial intelligence “as applying advanced analysis and logic-based techniques, including machine learning (ML), to interpret events, support and automate decisions, and to take actions.“
AI systems have enabled heightened productivity for businesses by handling tasks at a faster rate than humans can. This frees up time and allows employees to focus on more high-value objectives.
Artificial intelligence systems are built on a strong coding foundation in which developers program and train machine learning (ML) and deep learning algorithms to mimic human intelligence.
AI disruption in the business sector continues to deliver innovative solutions for several business functions:
- Enhanced business processes
- Increase return on investments (ROI) and reduced total cost of ownership (TCO)
- Able to fast-track new services and products to market
AI can accelerate research and development (R&D) cycles, dramatically decreasing the time it takes to bring products to market and increasing the speed of business. This can lead to a better ROI as AI solutions supplement processes by reducing the costs and time lost during the development phase.
AI can also deliver high-quality processes free of human error, helping to strengthen the systematic ability of organizations to better comply with industry standards. AI and machine learning (ML) have enhanced robotic process automation (RPA) software with the ability to execute repetitive manual tasks while monitoring, learning, and improving processes over time.
Grand View Research forecasts that the global artificial intelligence market will reach 1,811.9 billion U.S dollars in value by 2030, registering a CAGR rate of 38.1% between 2022 and 2030.
- Re-Energized Cybersecurity Efforts
As cyber threats evolve and attacks from ominous threat actors become more sophisticated, businesses are re-energizing cybersecurity initiatives with bleeding-edge solutions that defend their systems on all fronts.
This includes shifting away from traditional perimeter-based security models towards network-defined security solutions that can effectively protect against zero-day attacks and other persistent threats.
In their “The State of Ransomware 2021” survey, leading cybersecurity management firm Sophos revealed that 54% of companies believe their IT departments aren’t adequately equipped to defend against sophisticated cyberattacks.
It’s down to the CIO, CIRO, and CSO to lead on cybersecurity measures to protect against these potential threats. As such, businesses must stay informed on the latest cybersecurity developments to ensure compliance with regulations that, if not adhered to, can ultimately make or break a business.
Embedding artificial intelligence (AI) and machine learning (ML) into organizational cybersecurity solutions helps organizations better anticipate and prevent potential attacks. As businesses face increased attacks from hackers seeking to gain access to sensitive information, they need to implement continuous monitoring and real-time protection solutions—which can greatly be enhanced with AI.
Businesses are recalibrating cybersecurity strategies to fortify their digital infrastructure and improve their cybersecurity posture. With cybersecurity threats constantly evolving, this is a significant trend to watch as businesses seek new ways to protect themselves in today’s digital landscape.
Whether through cybersecurity training and awareness programs, adopting new cybersecurity solutions, or updating their cybersecurity strategies, businesses need to be proactive about cybersecurity to stay ahead of the curve.
Cybersecurity threats constantly evolve and require organizations to stay vigilant to protect their data. By proactively implementing the appropriate security tools and approaches, businesses can effectively safeguard their systems and maintain the security of their operations.
- Customer Data Platforms (CDPs)
In 2022, many businesses and marketers realize the value of Customer Data Platforms (CDPs) to contemporary business practices. Deploying a customer data platform can help companies to increase their return on investment (ROI) while supporting their customer relationship management (CRM)—solidifying it as a prominent digital transformation trend this year.
CDPs consolidate first-party data collected from a customer’s digital footprint—website visits, email and advertisement clicks, social media interactions, offline purchases, etc.
These platforms then clean the data and piece it together to form complete customer profiles within a single cohesive source of truth. This data can be used to better target marketing campaigns, drive sales, and enhance the overall customer experience.
Businesses recognize the power of customer data, and the use of a customer data platform enables them to collect and analyze that data more effectively across different channels and touchpoints.
The growth of digital transformation has fueled the rise of CDPs. And advanced CDPs can now leverage modern technologies like artificial intelligence (AI) and machine learning (ML) to improve data analytics across siloed departments and enable real-time decision-making.
Of course, managing customer data is not always easy. A CDP typically involves a complex set of technologies and processes that can be difficult for many marketers to grasp. However, with the right tools and expertise, it is possible to get the benefits of a CDP without all the complexity involved.
CDPs unify customer data, which allows marketers to track leads along the sales pipeline and increase their bottom line. And with growing interest in customer-centric marketing strategies, we can expect to see even more businesses adopting CDPs as part of their digital transformation efforts in the years ahead.
- Blockchain Technology
Contemporary technologies like blockchain value extend beyond just entertainment and social spheres.
Blockchain technology’s powerful capabilities offer businesses an infinite number of use cases. This rising technology is also facilitating the rise of Web3 and the metaverse, prompting enterprises to capture the potential of these decentralized systems.
The global blockchain technology market was valued at just under 6 billion U.S dollars in 2021 and is estimated to reach 1,235,71 U.S dollars by 2030—registering a CAGR of 82.8%.
This shift towards decentralized solutions and applications provides a new vertical for modern business transformation.
Technologies like blockchain offer a new paradigm for how businesses operate, with the ability to fortify operational processes with its transactions on ledgers and immutable peer-to-peer architecture.
At its core, blockchain is a distributed ledger technology that allows for secure transactions without central intermediaries or third-party verification. Beyond financial transactions, blockchain has potential use cases in many industries, from automation to logistics to digital identity management.
Former President and CEO of IBM Ginni Rometty summarizes the value of blockchain: “Anything that you can conceive of as a supply chain, blockchain can vastly improve its efficiency—it doesn’t matter if its people, numbers, data, money.”
Web3 is an evolution of the current iteration of the internet toward more peer-to-peer functionality. Web3 builds on top of existing internet protocols with new layers of communication and security that enable greater user control and privacy.
The metaverse is a digital ecosystem that connects blockchain, Web3, and other digital technologies to create a persistent virtual environment. Businesses can interact with each other in this digital realm, reach new customers, launch digital assets and NFTs, and create immersive 3D experiences.
This will majorly impact the market as digital transformation efforts expand to encompass a range of decentralized technologies, such as virtual and augmented reality, smart contracts, and advanced cryptography. This has the potential to revitalize the digital economy and disrupt traditional business models.
- Internet of Behaviours (IoB)
Internet of Behaviours (IoB) is a relatively new digital transformation trend that’s just beginning to make its way onto the radar of IT and business leaders. This emerging technology allows businesses to track, analyze, and predict consumer behavior in real-time, allowing them to engage with customers more effectively and provide a personalized experience.
IoB is built on advanced data analytics and machine learning algorithms that allow businesses to gain deep insights into consumer behaviors. In particular, this technology can help companies better understand consumers’ preferences, interests, and purchasing habits.
By leveraging these insights, businesses can develop targeted marketing campaigns that resonate more strongly with their customers—resulting in improved engagement and higher conversions.
IoB is also transforming how companies operate internally by giving them access to key insights on the performance of their products and services. This information can help businesses make more informed and agile business decisions, allowing them to stay ahead of trends and remain agile.
IoB represents a paradigm shift in how we view digital technology, recognizing it as much more than an accessory or tool. The IoB recognizes that digital devices are now intimately embedded in our everyday lives, affecting everything from communicating with others to making decisions.
Some of the key benefits of digital transformation through IoB include enhanced efficiency and productivity, improved decision-making capabilities, and greater connectivity among individuals and organizations.
- Sustainability By Default
As the conversation around climate change and sustainability continues to intensify across all industries and wider society, businesses need to think critically about the role they want to play in the collective pursuit of a cleaner, greener, and more sustainable world. In this context, sustainability by default and business sustainability qualify as rising digital transformation trends this year.
Digital transformation is about leveraging new technologies to drive business growth and improve efficiency. However, in many cases, these digital changes are made without taking into account their long-term impact on the environment or the sustainability of the business itself.
And so, businesses are readily adopting sustainability models that help manage and coordinate solutions for minimizing their environmental impact, reducing waste, and balancing profitability.
Businesses are beginning to invest in environmental, social, and governance (ESG) initiatives that align business policies, practices, and expenditures with more ethically conscious standards. ESG models provide criteria for measuring the material risks of an organization’s external environmental impacts.
Sustainable initiatives like ESG give businesses a clear framework for deploying solutions that inform socially responsible financial investments, while determining future financial performance. The prioritization of environmental concerns may naturally be at odds with economic objectives. However, investments in these fields can help build trust with socially conscious customers and investors, bolster public relations (PR), and ultimately improve business outcomes.
A sustainable business strategy should be at the core of digital transformation efforts. Some key steps to creating a sustainable digital transformation strategy include evaluating current processes for waste and inefficiency, implementing digital technologies that help to optimize resource use, and rethinking corporate culture to emphasize sustainability as a core business goal.
To truly embrace digital transformation as a means of becoming more sustainable, companies must invest in new tools and technologies that can help them reduce their carbon footprint and minimize their overall environmental impact. This might include shifting to digital workflows, investing in renewable energy sources, or incorporating more eco-friendly materials Into their products and services.
In an interview for McKinsey’s “Decarbonization: The New Frontier For Investment and Innovation,” President and CEO of the Bezos Earth Fund, Dr. Andrew Steer, explained his thoughts on the state of business sustainability: “We now have a new economics where the best economists in the world are showing that smart, bold action on climate change leads to more economic efficiency: we use resources better; it drives new technology, lowers risks, and reshapes expectations about the future.“
Ultimately, digital transformation can be a potent tool for driving positive change within businesses and beyond. By embracing sustainable practices as part of this digital transformation trend, companies can improve their bottom line and make a real difference in the fight against climate change and other pressing environmental issues.
- Hybrid Work
Hybrid working practices are becoming increasingly popular as transformative technologies like cloud-computing and next-gen communications enable remote productivity.
Hybrid or remote work models leverage digital technologies and flexible working arrangements to improve company culture, lower operational costs, reduce attrition and cultivate employee strengths.
The onset of the Covid-19 Pandemic rapidly accelerated the adoption of the hybrid office model, as many companies shifted to remote working routines to protect the health and well-being of their organization and the public.
By adopting hybrid work models, many digital startups could continue operating seamlessly despite the drastic transition from on-site work routines to remote routines. It has been shown that hybrid workstyles can lead to increased job satisfaction and engagement, as employees can manage their workloads and schedules in a way that allows them to thrive professionally while maintaining a healthy work-life balance.
At the core of hybrid workstyles is the concept of flexibility and choice. Employees have a number of ways to fulfil work obligations whether using digital tools such as video conferencing or virtual collaboration platforms.
However, while this digital transformation trend has made it easier for organizations to reap the benefits of hybrid workplaces, implementing these new work arrangements can be challenging and requires a supportive culture that values collaboration and communication skills.
Overall, hybrid workstyles are a win-win for both employees and employers. They allow individuals to achieve their personal and professional goals while helping organizations facilitate productivity, collaboration, and flexibility.
How To Initiate A Digital Transformation Strategy
A digital transformation strategy is a plan to leverage digital technologies to improve efficiency, drive innovation, and better meet customer needs.
To initiate a digital transformation strategy, you first need to identify critical areas of your business where technology can have the greatest impact. This may include processes like marketing and sales, product development and manufacturing, or customer support and service.
Five steps to initiate a successful digital transformation strategy:
1. Start by assessing the current state of your business and understanding where you can improve.
2. Identify areas where digital technologies can help you achieve these goals, whether investing in new software or leveraging data analytics tools to make better strategic decisions.
3. Set clear objectives for your digital transformation effort, and develop a plan for how you will achieve them.
4. Communicate your strategy to all stakeholders in your organization, including employees and customers, so they can support your efforts and help you succeed.
5. Adapt and evolve as needed over time, as digital transformation is an ongoing process that requires regular attention and iteration. With the right mindset, commitment, and approach, you can successfully initiate a digital transformation strategy that will help your business stay competitive.
Turning Digital Transformation Into Business Transformation
Successful digital transformation is a process and commitment to continuous improvement—an ongoing mission where the goalpost is perpetually moving and organizations must be conducive to digital disruption.
Businesses have only begun to adjust to the rules of a post-pandemic world, and this year, volatile supply chains and a looming economic depression threaten further unpredictability.
And so, businesses have been strong-armed into accelerating digital transformation efforts and deploying new technologies that drive organizational growth—all while overcoming social and economic obstacles. And so, digital transformation means a whole new ideology, the overall management of IT as a strategic driver of the organization.
The digital age brings a constant stream of new technologies and innovations for transforming business operations. This year has seen organizations realign their digital-first approach with optimizations to their technology stack.
Shifting social and economic factors mean that business leaders must actively seek agile solutions that deliver reliability in uncertain times—following these 12 digital transformation trends will help you achieve this.