Digital transformation has become a buzzword across many industries. Which ones are leading the way?
Digital transformation (DT) — using digital technologies to create or modify your processes, culture, or customer experiences — requires more than just moving ‘from paper to glass.’ It’s about making fundamental changes to the way you use technology and data to reduce risks, accelerate innovation, and drive revenue growth.
We’ve talked about DT here before, for example in this blog post that appeared in December of 2019. At the time, we cautioned that DT would be coming to your organization soon, “like it or not.”
We had no idea just how prophetic those words would be.
The outbreak of COVID-19 significantly accelerated digital transformation as lockdowns, social distancing and travel restrictions were imposed worldwide. According to data recently published by McKinsey & Company, the pandemic accelerated the digitization of customer interactions by 3-4 years.
The impact was even greater in product offerings. The average share of products or services that were offered digitally jumped by as much as 21% between December 2019 and July 2020. That’s an average adoption acceleration of seven years globally — and more than ten years in the Asia-Pacific region.
Why Does Digital Transformation Matter?
The way many people do business worldwide has literally been changed forever. But even after COVID-19 subsides, there are signs that DT will continue to be even more important to the success of organizations of every size. Our take is that this isn’t just a disruptive technology, but a Fourth Industrial Revolution.
A recent survey of 1,200 companies and a compilation of DT forecasts and statistics gathered by AIMultiple notes that companies embracing DT are achieving remarkable benefits – and expect to see more. For example, more than half of CEOs consulted by Gartner say digital improvements have increased their revenue. Data from PTC suggests that DT improves operational efficiency, speed to market, and the ability to meet customer expectations. MIT reports that digitally mature companies are 23% more profitable than those who haven’t made strides in DT. And the list goes on, so it’s not difficult to see why DT is here to stay.
That said, some markets are adapting faster than others. Here’s an update on a few of the key industries we watch (and serve).
DT has made significant contributions to research capabilities by enabling labs applications that were inconceivable even 20 years ago. This is partly because DT makes it possible to move beyond the descriptive reporting of the past to prediction engines and even prescriptive augmentation that speeds up decision making.
The COVID-19 pandemic is an excellent example. During the global health crisis, more tests have been processed than ever before, the time to develop new vaccines has never been shorter and our ability to treat the infected has greatly improved.
“This is only the very beginning for the digital lab of the future, as continuous monitoring and integrated feedback loops become a reality,” says LabVantage CEO Mikael Hagstroem. “Labs are rushing to integrate various software solutions (LIMS, electronic laboratory notebooks, laboratory execution systems and scientific data management systems, etc.) into one common platform. Lab data lakes are being used to accelerate knowledge-sharing and to better integrate data assets, not just within the labs but also between labs. Examples would be in forensics or between lab environments and production environments.”
These sentiments are echoed in a recent post by Deloitte, which points to many potential benefits for life sciences organizations such as pharma and biotech companies. They see opportunities ranging “from improving finance, supply chain, and manufacturing operations, to developing new products and services, to engaging differently with customers and patients.” Yet while Deloitte sees DT as a “strategic imperative,” the article notes that only about 20% of biopharma companies are maturing digitally.
While health care has traditionally been slower to adopt digital technologies than many other industries, the pandemic was a major wake-up call. According to a report by Accenture published in June of this year, 81% of health care executives surveyed say the pace of DT for their organization accelerated — and in many cases it was initiated practically overnight. In addition, 93% reported that their organizations are “innovating with an urgency” in 2021.
“Think about the impact of technologies that amplify each other in a fusion across physical, digital and biological worlds,” Hagstroem says.
According to a recent article by DreamFactory, DT offers the health care industry the potential to dramatically improve the quality of patient care. In particular, they point to applications for computer vision and artificial intelligence (AI) in diagnosis, as well as preventing potentially life-threatening risks like misdiagnoses and patient misidentification. One AI system, for example, can detect COVID-19 pneumonia in CT scans with 90% accuracy. The article also highlights the transformative impact wearable technologies and telehealth are already having on the industry.
The pandemic hit the food industry particularly hard, from supply chain shortages to spiking demand — especially for non-perishable products, delivery, and other no-touch options.
“All the upheaval put digital transformation in the food industry into hyperdrive,” according to The Future of Customer Engagement and Experience. In April of this year, the organization identified four major trends that have resulted:
- acceleration into the cloud to enable more nimble responses to rapidly changing market conditions
- using AI and real-time analytics to anticipate trends and reduce waste
- diversification into online channels for serving customers (often in response to extreme shifts away from restaurants and other brick-and-mortar stores)
- increasing the use of advanced technologies like the internet of things (IoT) to fulfill consumer demand for sustainability information.
Digital Transformation Has Only Just Begun.
We have yet to fully grasp the speed and depth of the DT revolution. From having billions of people connected in real time, to unprecedented processing power, to a confluence of disruptive innovations covering wide-ranging fields such as artificial intelligence (AI), the internet of things (IoT), biotechnology, nanotechnology, robotics, 3D printing and quantum computing, the opportunities are virtually limitless. But one thing is certain: we’re at the beginning of a revolution that is fundamentally changing the way we live, work, and relate to one another.