digital transformation

Technology trends 2022

The pandemic has a significant impact on business and all life areas. It launched a massive online business transition. In 2022, the continuation of the transition to the digital and virtual format of society and business will be observed. Let’s take a look at the most important technology trends in 2022.

  1. Artificial Intelligence

Some time ago, when we saw the «smart» prefix for a certain device (smartphones, smart TVs, etc.), we realized that it had an Internet connection. Now «smart» indicates Artificial Intelligence usage. Smart cars use facial recognition algorithms to determine the driver’s level of concentration on the road, as well as the level of fatigue. Smartphones, using AI algorithms, are capable of performing many functions: call quality maintenance, image quality improvement, and much more. AI has penetrated deeply into many business and life daily use tools: voice assistants, language translation, automation of various business departments activities (logistics, accounting, HR, etc.). Everyone, regardless of their occupation, can find AI-powered tools that can make life easier. The current trend is embracing AI, the Internet of Things (IoT), ultra-fast networks (5G) for even greater opportunities.

  1. «Everything» as a service

Data and technology democratization will be another powerful engine. In recent years, the main goal was to make technological innovation accessible to every user, regardless of their knowledge and skills. Hybrid storage and processing solutions are becoming more and more viable.

Not every company needs to form its own IT team. Technological solutions with the possibility of self-service, AI solutions are developed for almost any area: marketing, personnel management, finance, analytics, project management, production processes planning and development. In 2022, companies will continue to deploy AI and IoT infrastructure without owning a single server.

  1. Virtualization, datafication, digitalization

Since 2020, many companies have switched to a virtual mode of operation (offices and work places virtualization). This transition should have been longer and more gradual. However, the crisis caused by the Covid-19 pandemic has accelerated the virtualization process. And in 2022, the world will continue to get more acquainted with the «metaverse» – a virtual space that allows people to interact in it with each other and digital objects.

  1. Transparency and AI governance

Artificial Intelligence for many people is like a «black box», and it is impossible to look and understand its work principle. Nowadays, the idea of ​​transparent and explainable AI is gaining popularity. Also, governments understand that there is a need for a regulatory framework. Thus, the EU has proposed a law on Artificial Intelligence, which prohibits the authorities from using it to develop a system of social assessment, as well as the use of facial recognition tools in public places. AI should benefit people. The trend of 2022 and subsequent years will be to balance AI introduction.

How will the digital technology market change by 2025?

Without a doubt, the COVID-19 pandemic has had a tremendous impact on all areas of modern life. This also affected the business, that needed to quickly respond to changes and cope with them. This has sparked incredible growth in the digital transformation technology market. During the pandemic, organizations and companies began to actively use various technologies: machine learning, computer vision, artificial intelligence, etc. Currently, the process of introducing advanced technologies continues. This market sector is projected to grow to $252 billion by 2025.

Machine Learning (ML)

The market revenue from machine learning in 2019 was $18.4 million. Given the fast pace of growth, total ML market revenue is projected to reach US $216.6 billion by 2025 with a CAGR of 50.8%. Now machine learning is widely used in healthcare, sales and marketing management.

Natural Language Processing (NLP)

In 2019, market revenue from natural language processing was $3 billion. Now the figure is approaching $8.3 billion. The average annual growth rate is 18.1%. eCommerce businesses use NLP to improvise and ensure maximum customer satisfaction. With the help of chatbots it is possible to provide personal contact with customers, that helps to competently research the market and customer behavior.

Computer vision

By 2025, revenue from the growth of the computer vision market is projected to increase from $4.3 billion to $16.8 billion. The average annual growth rate will be 25.4%. Computer vision is widely used in the automotive, manufacturing, retail and healthcare sectors.

Images and faces recognition

Facial recognition occupies a large portion of the biometrics and digital transformation market. In 2019, revenues from image and face recognition technologies were $3.2 billion. Revenue is projected to grow to $8.7 billion by 2025 at a CAGR of 17.6%.

Other technologies

Even though the demand for the above technologies is very high, there are other similar developments that fall under the category of digital transformation technologies. They will also grow rapidly. Total market revenue will reach US $1.7 billion by 2025 with a CAGR of 42.7%.

Clear strategy defines success of digital transformation

In the past 10 years, digital transformation has been quite calm and slow. However, the pandemic has changed this trend by shedding light on the shortcomings of the enterprise technological infrastructure. This situation has forced decision-makers to prioritize IT and increase investment in digital solutions.

Digital transformation is the advanced technologies integration and implementation into business processes. This process is not limited to just hardware or software implementation. It involves profound changes and review of management methods, corporate culture and external communications. Increased employee productivity, high level of customer satisfaction, good reputation and efficient company operations are the result of digital transformation.

In the service industry, digital transformation plays an important role to understand customers and meet their expectations. The transformation process defines digital changes in value formation for products and services development, production, promotion, distribution and sale. Business users can use the generated data to improve customer service and efficiency. This, in turn, makes companies competitive.

The rise of digital innovation has pushed business leaders to implement transformation strategies to reach their target audiences and align their business proposition with customer needs. The right approach will ensure that you understand and build a successful digital transformation framework.

Let’s take a look at a few steps to successfully implement a digital transformation strategy:

Technology advances every day, forcing businesses to quickly adapt to any changes and update their business operations. To be successful and keep up with technological progress, you need to be aware of the possible results. It is important to predict, understand and analyze all changes after the proposed transformation, to understand necessary changes, their results and customer reactions to them.

After goals defining and results prediction it is necessary to select relevant technologies. It is important to understand here that digital transformation is not about mindless investment in advanced technologies. This process means the «right» technologies choosing to help business achieve goals.

Choosing a technology, it is important to answer the following questions:

  1. Does the chosen technology align with your digital transformation strategy and business proposal?
  2. Will the technology rectify operational processes deficiencies after implementation?

The technologies choice is followed by the technical part of the strategy, including the creation of a new digital platform and changes in the operating model.

Digital transformation affects all business areas, both external and internal. The right corporate culture implementing can be a stumbling block in this process. Communication is the key to create a healthy corporate culture. Communication and leaders’ involvement to explain the new vision of business processes, training and consultations allow each team member to quickly accept, understand innovations and be effective.

Digital transformation fundamentally affects business and requires a strategic approach. The technologies being deployed must expand core business capabilities and meet customer expectations. It is important to shift the focus to creating new services and products. To understand customer behavior, market trends, avoid possible losses, it is worth using data and analytics.

Digital transformation can be done easily and painlessly. A well-thought-out strategy and relevant technologies will help you quickly adapt to changes and meet the growing customer needs.

Digital transformation as a driving force for business development

The modern age doesn’t have statical form. Its essence is usual changes. And the one will be successful who acts in unison with them. Firstly, changes were happened in the information technologies area, that became some kind of strength test. Before COVID-19 situation just 15% of company gave priority to the digital transformation. In this case, they could transform their work process to remote format. Other 85% had to work hard for being in time with rapid technology changes and requirements.

The pandemic has global influence and became a reason of accelerated digital technologies implementation. If recently there was a trend to implement artificial intelligence, augmented reality, cloud analytics, DevOps, but after pandemic such customer support tools like chatbots got their popularity.

Information technologies is a trigger of actual changes, after that it became possible to influence the events’ run surgically: to improve efficiency, upgrade some products or services, introduce new business models and many others. International Data Group* conducted research of the IT decision-makers. 32% of them confirmed positive influence of digital transformation on the revenue with 23% increase.

Progressive companies use the algorithm of integration digital project development for their own requirements and take as the most important element for business life cycle. Due to research of International Data Corporation (IDC)**, the amount of investments in this sector will achieve $2 trillion by the year 2022.

The perturbation must be happened with everybody and every system and it doesn’t depend on scope and business activity. The main role belongs to the TOP-management, who has to come first with all these transformations and understand exactly their value. Also, it’s necessary to understand the scope of transformation, because it will be happened in every business levels. Moreover, it could cause changes in corporation culture and business policy generally.

Taking into account each organization’s individuality, it’s not possible to create one and the only decision. And it means need to be ready for experiments and fails during implementation process and searching own «ideal». In addition, it’s important to remember about work group. Every innovation success also depends on clear reporting of «rules of the game» to every employee and favorable working environment. IT and HR-departments are the link between TOP-management and employees and have the responsibility for this part of process.

Transformations are not always about comfort and commonly bring some challenges and losses. Thus, you shouldn’t ignore the strategy. It’s not a panacea, but clear seeing of the picture will help to recognize risks and prevent damages. And the main responsible person is a TOP-manager, who will understand all process steps, be ready to confront with difficulties, and be the main initiator and support for his team.

*International Data Group – American media and research company, focused on the tech landscape.

** International Data Corporation (IDC)  ̶ is an international research and consulting company that investigates world  information technologies and telecommunication market.

What is digital transformation and how can it benefit your business?

Nowadays, digital transformation is something every modern company is thinking about. Rapid technological development impels organizations to adapt to the ever-changing environment to stay relevant in a highly competitive market. At the forefront are the companies that collect data from market interactions and produce digitally enabled products or services. Those who failed to embrace the digital transformation are risking being left in the dust.

In broad terms, digital transformation is the implementation of digital technologies in every area of business. But it isn’t only about technology. It’s also a cultural change that spurs companies towards a culture that promotes experimentation, questions the status quo, accepts failure as part of the process.

Digital transformation also induces a change in leadership styles and brings about the reinvention of the business models to satisfy customer needs better.

Adopting digital processes requires a multifaceted approach to planning, choosing the right methods and tools, and execution. Many businesses have already embarked on a path towards digital innovation, however, some companies are hesitant about investments that might not pay off. Some surveys reveal challenges business leaders grapple with on their digital transformation quest:

Nevertheless, there are lots of examples of brands that have remarkably ameliorated their businesses by digitally transforming their operations. Microsoft, for instance, began shifting towards cloud systems because of lagging stock prices and increased competition from corporations such as Apple and Amazon. The company opted for a more flexible cloud system for personal as well as enterprise use. It no longer abstained from partnerships like before and started to foster relationships with other software and technology companies. Its public image has also changed: a stagnant, outdated company turned into an ambitious cloud solution. In early 2014, before Microsoft’s digital transformation journey began, its revenue was $93.5 billion but in 2019 this figure grew to $122 billion. Its stocks also rocketed during this period from $38 per share to $136. 

The key benefits of digital transformation

But increased revenue and stock prices aren’t the only reason digital transformation is worth investing into. According to a 2018 IDC Spending Guide, the global spending on technologies and services that propel digital transformation is expected to reach $1.97 trillion by 2022. This is an indication of business executives recognizing the many benefits of digital transformation. Let’s look at some of the crucial ones.

Elevated customer experience

Consumers these days are incessantly looking for solutions that bring notable value. These solutions must be convenient, expeditious, personalized. Because of this, the primary motivation behind digital transformation is improving customer experience. One research indicates that an astonishing 92% of executives who are now preoccupied with developing digital transformation strategies do that precisely to enhance the consumer experience.

Digital transformation programs allow businesses to:

Relevant data-driven insights

One of the major advantages of digital transformation is that it equips businesses with lots of tools to implement true data-driven management. With insights obtained from the data, the companies can optimize their strategies and processes so that they deliver even greater results.

Businesses that accumulate and process customer data can understand the customer’s behavior better and tweak their strategy accordingly. That leads to hyper-personalization, real-time feedback, higher relevance, and increased operational agility.

If you successfully adopt data-driven decision-making throughout your organization, you’ll secure higher ROI and resource optimization. From this point onwards, you can be sure that each decision you’ll make will be in line with what your customers want.

Heightened agility and innovation

The need for greater agility is prevalent in nearly every industry today. The constantly evolving technological landscape leaves no time for businesses to stop innovating and become complacent. They need to keep pace with their competitors – and the only way to do that is to become flexible and more responsive to change.

Even the companies at top of their game must be ready to adapt and innovate. New trends, tools, and competitors will keep coming, challenging the status quo, and offering a brand-new customer value. However, this is the core benefit of digital transformation – it compels businesses to respond to all of these changes.

New skills and knowledge

The emergence of new technologies entails a growing demand for specialized skills. Experts estimate that in the near future, organizations are going to be heavily dependent on skill sets in areas like Artificial Intelligence (AI), Augmented Reality (AR), cloud computing, growth hacking, and data exploration/analytics.

But now companies have a hard time finding qualified specialists. One report revealed that 31% of organizations suffer from a shortage of digital talent and experience among their personnel and leadership.

Business leaders are hesitant to invest in the development of digital skills largely due to the fear of change. Many companies see digital transformation as a huge expenditure rather than a smart investment.

But only by embracing the challenge of change can companies help their employees develop necessary skills and equip their business with the knowledge required to sustain their growth.

Creating a productive digital workplace

Digital transformation brings value not only to customers but to employees as well. Adequate digital transformation programs boost your workforce productivity and engage your staff in the business processes without overwhelming or disconnecting them.

Apart from bringing your workforce together, investment in digital tools can streamline the connections between various points in your company’s architecture. This may include areas like social media, analytics dashboards, and project management interfaces. Digital transformation makes it easier to consolidate the company’s processes and operations.

Fostering a new digital culture

As we mentioned earlier, it’s not enough to have the right technology in place. If you want your business to be successful in the future, you must build a solid foundation for it, that is adopt a culture that embraces change, immerses your employees in digital environments, and helps them to acquire essential skills and become truly digital-savvy experts.

Digital transformation enables companies to achieve this objective because it impacts the leadership and drives the new culture all the way through.

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