In the United States, the total revenues from the digital transformation market will go beyond $1.1 trillion by the end of this year. Moving on to the Middle East – experts estimate that digital solutions will augment annual GDP figures by well over $93 billion. The world of technology is evolving constantly – and things that were, even half a decade (or less!) ago possible only in the realms of fantasy, are actually being deployed in the real world (think about roads with ONLY driverless cars, and you will get the picture). The internet of things (IoT) will continue to be the face of this digital revolution, with cloud technologies, artificial intelligence, and AR/VR all becoming smarter, more usable, and more targeted towards addressing real-life problems.
For all the focus and discussion about digital transformation worldwide, there still remains a definite gap between awareness and implementation in this domain. While, on average, 9 out of every 10 entrepreneurs believe that full-blown digital strategies can deliver competitive advantages to their businesses – <20% actually have proper plans and funding schemes in place (less than 10% enterprises are ‘fully digital’). From blockchain and edge computing, to IoT, big data, analytics, AI chatbots and stronger digital integrations – there are lots of avenues for the digital economy to grow further over the next few quarters. In what follows, the most important digital transformation trends for 2019 have been listed:
AR applications to soar
For all its exciting features and sheer ‘newness’ of virtual reality (VR) – the fact remains that VR has limited usability in the real-world, apart from high-end gaming. In 2019 and beyond, it is going to be augmented reality (AR) that will drive the digital world forward. Already, the demand for specialised enterprise AR applications (say, for training) is on the high – and going forward, this technology will further gather momentum. The key here is that AR has both the innovativeness AND the practical usability (unlike VR, where the usefulness is rather restricted). As the technology gets more and more refined, we are likely to witness a surge in the number of use cases for AR. New augmented reality and mixed reality (MR)-powered products/kits are set to be launched over the next few quarters, and there will be an increased need for experienced AR developers.
Note: Mobile AR is going to lead the way, even as the market for AR headsets also continues to grow steadily. Extended Reality (XR) – a mix of VR, AR and MR – will be the newest tech buzzword.
Focus on delivering improved digital experiences to users
Digital transformation is, or at least should be, all about providing seamless end-user experience to everyone. That, and that only, can bolster customer satisfaction and customer-retention rates. An improved digital ecosystem also needs to include better workplace experiences for employees, partners, and other stakeholders. In the next few quarters, many organisations will start investing big on new tools, digital methodologies and overall infrastructure – in a bid to make their enterprise IT architecture more robust. There is still a major gap in the scalability of digital experiences delivered by many companies – and as the importance of technology and tech transformation for business acceleration is realised, organisations will look to plug this gap. Investments on digital activities for enterprises will go up fairly rapidly in 2019.
Note: AI-powered ‘intelligent assistants’ and IoT will boost the customer-experience factor (CX) for the new-age, ‘smarter’ buyers.
Digital transformation from the top down, finally
It is almost impossible to attain digital maturity without expert management. While the different ‘C-suite personnel’ (CIOs and COOs and the like) generally handle the digital ecosystems and IT infrastructures in a company – 2019 will probably be the year when the CEOs start taking greater responsibility for the digital future of their respective organisations. Apart from being more effective, this move will be in line with the preferences of general employees – who typically like the digital directions to come from the top-level. As the CEOs start taking greater control, the ‘C-suite’ officers will gradually move to the background. More importantly, the myth that digital initiatives are something that only the IT or the marketing departments need to be concerned with with will be busted. The onus will be squarely on the entrepreneurs/CEOs to make the right recruitments (for greater business agility, specialisation and digital transformation). The importance of acquiring more reliable data, and upgrading the skillsets of existing employees, also has to be identified.
Note: On a YoY basis, the role of CEOs as the face of digital transformation has jumped from 22% to ~40% in 2018. The importance of CIOs, on the other hand, has gone down to 16% (from 24% last year).
Chatbots to find greater acceptance
The performance of AI-chatbots for business has come under scrutiny several times over the last few quarters. What’s more, there is also a cloud of uncertainty over how widespread adoption of chatbots will affect employment (i.e., whether there will be major job-displacements). Even so, the growth and improvement of chatbots will continue to be one of the strongest digital transformation trends for 2019 – with 4 out of every 10 big companies adopting chatbots before the end of the year. The ongoing advancements in ‘sentiment analysis’ and ‘natural language processing’ (NLP) are making AI-chatbots smarter and more reliable than ever – ensuring that users can get access to deeper customer insights, and provide customised services accordingly. As far as the effect on human workforce is concerned, companies will realise that chatbots need human touch and guidance for optimal functionality (handing over a buyer query to a human executive, for example). Chatbots are NOT meant to be substitutes of human workers – and provided that the necessary upskilling/training takes place – large-scale job losses should not occur.
Note: By the turn of the decade, 25% of all customer service activities will be handled by AI chatbots (also known as ‘virtual customer assistants’).
Move towards more integrated digital endeavours
Digital transformation, in the truest sense of the phrase, requires considerable investments and retooling. The fact that more than 70% of all transformation initiatives end up in failure is alarming – and one of the biggest reasons for the common failures is the adoption of a half-hearted, fragmented approach. In the next year and beyond, we will see digital initiatives becoming more integrated – and traditional organisational silos being broken down (the adoption of DevOps culture – bringing together the ‘development’ and ‘operations’ departments – is going to play a vital role in this). The benefits of following an integrated approach for digital transformation are immense – ranging right from better planning and development of powerful data models, to more consistent business growth and greater economies of scale. Top-level digital integrations have emerged as serious business imperatives, and in 2019, many companies will launch their very own digital programs and projects.
Note: Nearly 86% of all enterprise decision-makers feel that digital initiatives have to be integrated properly within the next 20-24 months. Fragmented efforts are almost certain to fail.
The hype is over for blockchain technology
That’s not to say that blockchain is a flop though. The problems here are cropping up from the lack of a single standard method of blockchain implementation. Since the user-requirements also vary widely (finance to marketing to HR, and more) – modifying the technology becomes an unduly complicated task. However, interest in blockchain is definitely rising – and leading players are examining the usability of blockchain technology for use cases outside of financial services and cryptocurrency (for example, transportation & logistics). Contrary to the hefty growth predictions, developments and experimentations with blockchain will continue right through 2019 – and researches on increasing the mass adoption of the technology (a plug-and-play blockchain model should help) will be conducted. The potential of blockchain is huge – but we will have to wait for a few more years before the technology becomes implementable on a large-scale.
Note: The role of blockchain in the internet of things (IoT) will be interesting. As per IDC reports, blockchain will be enabled in ~20% of all IoT deployments, by the end of 2019.
Greater focus on digital education, training and skill development
For nearly 42% organisations, lack of adequately trained/qualified personnel is a major problem in the road to digital transformation. More often than not, all the importance and focus is placed on the tech aspects of digital initiatives – relegating the ‘people-factor’ to the background. As a result, major skill gaps – together with business culture roadblocks, underutilisation of talents, and problems related to employee mindsets – become apparent, leading up to sub-par enterprise performance and productivity. Over the next couple of years or so, companies will continue to work towards changing their work environments AND upskilling their workforce (along with new hirings of digital specialists). People have to be made aware of the importance of digital transformation, the day-to-day workflow benefits, the procedure for digital deployments, and the changes in workplace culture involved. Greater commitment for training workers – so that they are actually ready (read: have the skills for) to handle digital transformation – is required. Tech advancements and innovations are all very nice – but it is the human workforce that is the biggest asset of any enterprise. Digital initiatives have to be ‘enabled’ by the workers – for them to deliver the desired results.
Note: On a worldwide scale, the total expenditure on digital transformation will go beyond the $3 trillion mark in 2019.
5G on mobile to become a real possibility
Let’s face it, the discussions about the ‘lightning-fast’ 5G technology has been going on for a rather long time. Already, several big players, like Nokia, Samsung and Qualcomm, have initiated fixed 5G deployments - with varying success. However, for the average user, not much has changed – and it is hardly uncommon for mobile handsets to fall back to 3G (maybe even EDGE) speeds from time to time (location plays a big role here). 2019 can finally be the year when 5G mobile becomes mainstream across the board – in both urban and rural localities. Companies like Mimosa Networks are paving the way for fixed 5G wireless access (FWA 5G) – and the next stage is surely the arrival of 5G on smart devices (powered by Verizon, ATT, and other major network service providers). It remains to be seen how big the speed advantages of 5G on mobile actually turn out to be – and what improvements need to be made. For iPhone-users, the wait for 5G is probably going to be a few months longer. This year saw rapid progress in fixed 5G, and the next year will be the one when 5G mobile takes flight.
Note: Early adoption of 5G technology is already lifting the sales of Ericsson’s network equipments. The tussle between Samsung Galaxy X and the Huawei 5G handsets next year will also be fascinating.
The rise and rise of ‘X-as-a-Service’
Salesforce is leading the way in the ‘CRM-as-a-Service’ domain. There is considerable buzz over the ‘AI-as-a-Service’ sector – in which major advancements are expected in 2019 and 2020. We are steadily moving towards a world of consumption based IT offerings – where everything is going to be available ‘ -as-a-Service’. Apart from delivering more customised solutions, such consumption-based digital services will ensure greater flexibilities, end-to-end scalability, and efficiencies at every stage. Not surprisingly, IT experts and CIOs are on the lookout for ready-to-use ‘X-as-a-Service’ tools – to manage workloads better, and generate competitive advantages for their enterprises. In fact, IT-as-a-Service (ITaaS) has already been accepted as a key pillar of digital transformation – thanks to its manifold advantages, like access to latest tech tools & resources, more agile workflows, and considerably shorter procurement cycles. The growth of ‘X-as-a-Service’ will become even faster in the foreseeable future.
Note: There is also a definite trend of trying to reduce technical debt – in the form of fragmented and inconsistent data collections. The open enterprise microservices can come in handy over here.
10. More effective utilisation of big data
Be it artificial intelligence or machine learning, or simpler analytics systems – the accuracy (and hence, utility) of everything hinges on the quality and availability of relevant, authentic data. While the fact that close to 89% of all available data at present has been created in the last 12-14 months – organisations, on average, manage to use <1% of the total big data available to them. In the coming year, this percentage will, hopefully, go up to 4-5% – as enterprises adopt better data processing capabilities. That, in turn, will take up the value generated by ML applications by several notches. Data is the single-most important factor for smarter decision-making – and organisations have started making a concerted effort to access and analyse data with greater precision. A lot of work remains to be done though – and we have to wait and see what breakthroughs are brought about by players like Microsoft, SAP and SalesForce. The more quickly we understand the potential of big data and start using cutting-edge digital tools for faster, better data processing tools – the faster will we be able to take AI and ML to the next level.
Note: The value of the global big data and related services market will rise to just a shade under $50 billion in 2019.
11. More reliance on connected clouds
There is a myriad of needs for superior cloud services – right from faster and more secure networking, to cloud-source storage and seamless app deployments. In many cases, relying on only the private cloud or the public cloud spaces will not be enough – and what’s needed is a combination of public, private and data center resources. Such ‘connected cloud’ networks will continue to grow in 2019 – and this growth will depend on the precise business requirements of users. Over the last couple of years, a series of high-profile acquisitions (CloudHealth by VMware, Cloud Technology Partners by HPE) have clearly indicated the rising interest for highly secure ‘connected clouds’. Companies like Alibaba, Google and Amazon are also active in this domain. In the near future, standalone public or private clouds will gradually give way to ‘multiclouds’ – with the latter offering completely streamlined experiences to users. A mix of cloud-based workloads is what we can look forward to in 2019.
Note: Easier system interoperability, adherence to regulatory frameworks, and seamless data portability are all going to be key characteristics of connected clouds.
12. Digital Transformation is going to be BIG in 2019
We keep saying this every year – and thanks to the rapid technological evolutions – the coming year is not going to be an exception. Apart from the advancements in machine learning and AI applications, the concept of ‘quantum computing’ is also set to pick up pace (market-leaders like Microsoft, IBM and Google have already started working on this). Unmanned aerial vehicles, or drones, are going to find more use cases, while the field of smart agriculture has many innovation opportunities (how about smart poles for agriculture?). In the corporate space, enterprise mobility management (EMM) and growing adoption of digital workspaces are the trends to look out for. Before 2019 is done and dusted, well over 55% enterprises will have ‘off-premise IT systems’.
Note: Products or services that have been digitally enhanced in some way or the other will be used by 1 out of every 2 Global 2000 companies, in 2020.
An increasing facet of digital transformation in 2019 will be the closer-than-ever inter-relations between AI/ML, edge computing and IoT. In particular, the growth of edge computing has a lot to do with the development of smart city applications (cloud-based data processing cannot be used for that). Edge computing delivers the real-time data processing required – and hence, automatically ensures optimal data utilisation. The number of data interactions between the cloud and the edge (in the so-called ‘Fog’) will go up manifold. One thing is for certain: the demand for newer, more powerful connected devices will continue growing exponentially.
Major improvements in location services are also expected in the next couple of years or so. Maximum emphasis will be placed on sustainability, security and enhanced operational efficiency of the enterprise ecosystems. While the private sector will continue to be the main beneficiaries of innovative digital initiatives, the impact on the public sector (i.e., smart city applications, smart public utilities) will also increase. In a nutshell, digital transformation is going to disrupt how we work, how we interact, how we spend our leisure…indeed, how we live!
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