The top 5 trends for digital transformation in 2018

When the history of digital transformation is written, 2017 is likely to go down as a landmark year where innovation was rife

There’s only one constant in business – and that’s that things change. And that change has been accelerating in recent years. Businesses have had to adjust to new ways of doing things, most of them related to the digital transformation that business, and the world, has experienced in recent years. From artificial intelligence (AI), to blockchain and the Internet of Things (IoT), new digital technologies are having a major impact on business – and that impact will only grow in 2018.

And companies can’t afford to ignore the trend. Firms that embrace digital tech transformation, according to a 2016 Harvard Business School study , saw an average 55% growth in gross margins over a three year period (growth that will echo down through earnings, net income and profits), while companies that weren’t sufficiently prepared to embrace digital tech had substantially lower margin growth (just 37%) during the same period.

Digital leaders, those in the top quarter of firms that embrace digital transformation, also out-earned laggards, with earnings increasing 16% during the three-year period, compared to earning increases of just 11% for companies that were at the bottom of the digital transformation list. According to the study, the effects of digital transformation will only increase in the coming years. Here are the top five trends that companies will need to be aware of:

1. IoT as an engine of digital tech growth
There are currently about 8.4 billion connected devices in the world – somewhat short of the 26 billion that Gartner predicted in 2013 would be in use by the end of the decade. That 20 billion number (if not the 200 billion predicted by Intel for 2020 ) will no doubt be achieved eventually, but the point of IoT is not just having smart devices gathering data and storing it in a database somewhere.

IoT’s importance is in the technologies that it contains that make it work – technologies like advanced analytics, 5G, sensor tech and edge computing, among others. With the flood of data that will be coming from smart devices, companies are feverishly working on analytics systems – centred on AI and machine learning – to make sense out of the reams of data that is being recorded, and creating actionable insights out of it. Because companies are going to want those insights in real-time, or as close to it as possible, communications firms need to develop networks that will quickly and efficiently move large amounts of data in as little time as possible – hence the rush to build out 5G networks. And, with IoT devices deployed everywhere, firms may find it more efficient to process data elsewhere than on the central server – hence the growing development of edge computing systems.

2. Increased emphasis on speed
Competition, for customers, resources, even for skilled workers, has never been greater, but even in the digital age, the basic rule of competition hasn’t changed: to get the business, you have to be first, and best. For the former, that means reaching markets and specific customers before the competition does; sourcing the supplies or resources needed to successfully produce products or services first; and the ability to quickly locate personnel as a company scales up. All of that requires faster processing, more intelligent (and faster) ways to search for information, and faster methods of evaluating data and determining its relevance.

3. Blockchain bursts forth
With Bitcoin values at an all-time high, it’s natural that the tech that powers the crypto-currency (blockchain) would begin to attract attention.