What 2021 tells us about digital transformation in 2022
News | 15 Oct 2021
The United Kingdom (UK), like the rest of the world, faced the severe impact of the COVID-19 pandemic, writes Chaitanya (Chai) Rajebahadur, Executive Vice President and Head of Europe for Zensar Technologies. According to the Office for National Statistics, the UK economy is still 2.1% below its pre-pandemic peak, and the damage inflicted on the economy is likely to be felt for years to come.
Aside from this disruption, the pandemic marked a watershed moment for digital change. Businesses, irrespective of their size or sector, were clamouring to serve customers digitally in 2020; however, from now on, businesses and service providers will be focusing on driving growth through digital channels to undo the negative repercussions of financial pressure they did not anticipate. They have no choice but to build new digitally enabled operations - where technology comes to serve people, their needs and often newly acquired behaviours.
As we draw to the close of 2021, here are the top five trends in digital transformation in the UK, we see driving business growth and recovery.
1. Data as creative material
Business leaders are increasingly recognising the advantages of leveraging data-driven approaches to improving customer experience and including this in their strategic roadmaps to increase user base, engagement or purchases.
Analytical data helps businesses assess the needs of their target customers and deliver personalised experiences providing differentiated customer journeys and more accurate forecasting and demand planning. Moreover, data from analytics promotes more effective inventory and supply chain management, thereby answering the need of the hour with the pandemic and Brexit compounding supply and fulfilment issues as we head into the latter part of the year.
During the pandemic, Ocado used AI and analytics to enhance real time stock management. This increased revenues and powered customer service at a time when many businesses were struggling. This trend, of reliance on analytical insights, is expected to continue.
Although this wealth of data is not newly available, until now it has often not been applied to solve the right problem in the right way. By harnessing analytics and blending this with employee and customer insight from qualitative and quantitative research, more insight-led roadmaps for digital change can be established that focus on the right challenges first.
2. New online business models will drive growth
As a result of the necessity to innovate, businesses worldwide are exploring additional revenue streams. This means that new online business models are emerging - mainly using digital ecosystems - that either complement existing business models or function as a completely new business. An example of this was the direct-to-consumer boom, where manufacturing giants embraced online ordering, with another being car manufacturers selling cars online.
These new models are driven by flexibility coming from changes to governmental and organisational policy and regulations because of the pandemic. Another factor is the introduction and management of digital channels by using experience management, or low code, platforms that support the creation and launch of new experiences to market fast.
While many businesses have turned to digital models for selling, one of the most disruptive use cases we have seen, is in the healthcare domain in the form of video consultation by doctors. With restrictions in place and hesitancy towards in-person interactions and diagnosis in many regions, remote consultation was widely adopted and accepted in 2020.
While this shift was embraced by patients and doctors, it also inadvertently helped improve the reach of the provision of healthcare to vulnerable people and those living in remote regions. It also sparked a change of thinking within these organisations towards more digitally enabled and efficient solutions, the impetus of which we’re now seeing taken forwards into a more decentralised form of healthcare.
More broadly, we’ve seen as-a-service (AAS) business models grow significantly during the pandemic across sectors. However, some businesses are still lagging behind because they either rely too heavily on digital without the element of service or support, or on in-person self-service.
3. A strong focus on building resilient supply chains
Supply chains continue to come under severe stress due to restrictions on movement and social distancing. Part of the recovery exercise for businesses is to repair the broken sections of their supply chains by establishing future proof networks that leverage local resources. This prompts interesting questions about local investments in everything from microchips to vegetables - moving us potentially to a more blended form of local vs. global supply.
Here, analytics will play a central role in demand forecasting which will gain traction with the help of automation as a supporting technology. There will also be a focus on transforming logistics in Europe as supply chains between the UK and the rest of Europe change, based on regulations related to Brexit. This could mean more hyper-local fulfilment; it could also mean all new possibilities for the moving of goods which do not rely on HGVs or shipping. This promotes new and interesting digital challenges and possibilities whilst changing business models and strategies in the process.
4. AI technologies complementing diverse use cases
AI adoption has steadily increased in recent years, although, non-novel applications to the right problems often underpin those who see positive results.
AI has effectively become the backbone of advanced technologies such as automation, IoT (Internet of Things), data analytics, robotics, cloud and chatbots across a wide range of applications such as AIOps (Artificial Intelligence for IT Operations), governance, compliance, customer experience, decision making and forecasting - and this trend is set to boom in the UK in the coming years.
The impact of AI will be realised in its fullest when it’s leveraged with complementary technology and customer centred thinking and not as a way to replace existing technology or people. The best applications of AI are those which embrace this triad and form powerful applications which create value for people and businesses.
5. Cloud and IoT will act as strong growth pillars
Cloud native infrastructures and IoT will continue to be the preferred technologies for growth and business expansion during the post pandemic recovery phase. This is because the design and engineering of digital customer and employee experiences falls down without the right cloud infrastructure supporting it, often leaving systems supported by on-premises architecture adrift. For this reason, enterprises will focus on strategic directives to migrate legacy applications to the cloud to increase flexibility and the seamless availability of their products, services, and experiences.
Expanding customer service and improving overall operational excellence through IoT will be another area of focus for many enterprises in the UK. Connected devices can power predictive rather than reactive service by consumer businesses, governmental bodies, and employers. This maximises time and efficiency whilst potentially removing menial tasks.
Another way to potentially accelerate a connected future is through the humble QR code, which has gained traction in the UK during the pandemic. Moving this technology out of restaurants and bars and into built environments and our homes could result in people performing actions via smartphones (for example, notifying the council about a streetlight outage, or a water company about a faulty water main) that offer advantages to society at large, saving on costly connected monitoring technologies.
With the vaccine rollout happening at an increased pace and new questions about living with the pandemic on the horizon, digital transformation will continue to play a big part in the ongoing management of the pandemic and the inevitable consequences.
Businesses looking to stay ahead of the curve would do well to explore these areas in new and interesting ways whilst paying attention to the behaviour change people have gone through and the demand for seamless, always on, services that work for them.