The influences of online channels on consumers’ behaviors as well as business environments, and recommends 5 initiatives for successful digital transformation to unlock the growth potential of organizations in 2022. The five are 1. AI-driven advanced analytics, 2. Cloud migration, 3. Unified experience, 4. Agile methodology and 5. Decentralized business model.
Online channels play important roles in everyday life. They facilitate purchases and financial transactions. Therefore, businesses need digital transformation to meet consumers’ demand and increase their own efficiency.
Generally digital transformation takes 3 main steps. It starts with the “digitization” of data. Next is the “digitalization” of work processes. This includes the application of ERP and CRM to improve efficiency. The third step is “digital transformation” – the reform of business with technologies to develop business organizations’ strengths, boost their competitiveness and create new growth opportunities.
However, digital transformation cannot be accomplished with a single try. It must be carried out continuously because business environments keep changing. Businesses must always adapt to sustain exponential growth.
In 2022, The 5 initiatives can drive digital transformation. They are 1. the application of artificial intelligence for the advanced analysis of data (AI-driven advanced analytics), 2. the transition of cloud-based systems (cloud migration), 3. the integration of customers’ experience (unified experience), 4. the application of the Agile methodology (Agile at scale) and 5. the reimagining the new business model (decentralized business model).
1. AI-driven Advanced Analytics
AI and machine learning are increasingly used in everyday operations because they can tremendously increase the potential of organizations. Businesses should start to apply machine learning which is a part of AI to improve the intelligence and precision of their data analysis models in the era of diverse data including texts, pictures and voices. With the improvement, data will become understandable and readily usable to develop business.
In other countries, financial institutions use machine learning to assess risks and support decision-making. It is applied to analyze the looks and gestures of customers to understand their emotions and feelings in real time.
2. Cloud Migration
In the era of businesses plagued by uncertainty, the use of cloud computing to run systems, databases and operations can help reduce the risks of businesses especially when it comes to costs. With cloud migration, businesses do not have to make a huge investment and risk sunk costs. They can choose to pay monthly rents to use cloud servers. Cloud computing allows users to easily cut their usage demand. It is thus flexible and suitable for the rapidly changing demand of businesses.
Today there are many choices of cloud computing – Infrastructure-as-a-Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).
Most businesses are reaching for hybrid cloud which comprises traditional infrastructure and cloud computing because they want to keep some data on-premises for security reasons or some requirements while using cloud computing to make their operations flexible and fast.
3. Unified Experience
Undeniably businesses are facing challenges as they interact more with customers because there are many channels to acquire products and services. There are online channels including e-commerce and social commerce and the offline stores where people visit to buy goods. The channels offer different experiences. Besides, consumers receive different information. This causes the channel complexity which creates confusion and must be carefully handled. Otherwise, businesses may not receive correct information and cannot provide customers with good experiences. Customers have more demand and expectations and businesses must serve them.
Unified experience becomes vital. It means that customers’ experiences that happen through all channels are unified and their demand is served through all channels (unified-channel). This is different from the introduction of various channels of services (omni-channel). To offer unified experience, businesses must begin with investing in effective data storage systems to collect data from all touchpoints.
4. Agile at Scale
Today business requires not only quickness but also flexibility. The world is changing rapidly and customers are too. What worked in the past may not do at present. Therefore, it is more necessary to apply the Agile methodology to business operations. The application is not for individual projects but is a must for whole organizations (Agile at Scale) so that new products can be launched fast enough to meet market demand and be flexible enough to adapt to new trends.
The Agile methodology begins with changing the mindset of staff who must be stimulated to try and create new things. Then feedback will be collected for further development. Besides, teams are organized to allow them to work fast. Those who are responsible for different parts of a project are grouped to form one team. A project is divided into small tasks which will be delivered step by step.
5. Decentralized Business Model
As the world changes, the centralized business model of organizations may not be so efficient as it used to be. Therefore, organizations should start to shift to the decentralized business model which allows all stakeholders to take part in all processes of business operations and share benefits. The decentralization also increases flexibility, agility and adaptability. The decentralized business model helps cut out the middleman and streamlines processes. Instead of waiting for one man in authority, decision-making can be decentralized to the people who have relevant skills and expertise. This will result in the effective solutions that are quick enough to cope with situations.
At present, blockchain supports the application of the decentralized business model at organizations. A good example is the decentralized finance (DeFi) which excludes the middleman in financial transactions and reduces their costs. It provides people with access to new financial products and investment options through smart contracts that can be programed to function correctly, quickly and reliably in accordance with preset conditions.
The 5 mentioned initiatives are considered as contributory factors in complete digital transformation. However, strategies are more important. Business organizations must consider how they can apply these initiatives to unlock their capabilities and open up new business opportunities for their exponential growth in the future.