While 2017 was an eventful year for digital transformations, the development of IoT (the Internet of Things) means that 2018 will likely see a tsunami of emerging technologies being leveraged to service customer and operational goals.
Digital transformation is now a top priority for all businesses and has become a vital component of success. While last year saw only cutting-edge enterprises maxing out on data and analytics, digital transformation has become unarguably mainstream. The results of a recent Constellation Research survey indicated that digital transformation has become “essential to driving profits” for the majority of businesses.
One of the top drivers for IT investment over the next two years is expected to be improving digital presence, according to research from Frost & Sullivan. Firms are looking to improve their customer’s experiences while reducing operational costs. For instance, GoPro is pinpointing gaps in the market and improving the customer experience by using data from its products.
To give a good sense of what lies ahead in digital transformation, here are the five digital transformation trends in 2018 and five that are cooling down.
#1. Blockchain Technology
According to Forbes contributor Daniel Newman, blockchain technology “may finally find its place in 2018”. Newman cites the predictions of tech site Datamation that blockchain may underpin up to 20 percent of global trade finance by 2020. The trend is best illustrated by the payments company Ripple Inc. As Ripple continues to build relationships with major banks for handling cross-border payments, it is clear that many companies are eyeing blockchain technology with keen interest.
In a recent CIO article, Chris Rothstein, CEO of sales platform company Groove was quoted as predicting that smart contracts “will gain in popularity in the coming years”. Rothstein cited smart contracts as a key driver of growth that he expects to continue in the foreseeable future. Although cryptocurrencies such as Ethereum and Bitcoin continue to grab most of the headlines, Fortune 5000 companies are showing a real interest in using smart contracts to help do business. As distributed ledger technology (DLT) offer immutability, it can reduce the complexity and cost of making cross-border payments.
In a recent interview, CIO contributor Esther Shien asked Bob Amareld, associate director of strategic operations and technology for global procurement at Biogen, about the potential of blockchain technology. According to Amareld, Biogen’s procurement group uses an ERP system that has up to 10 different data hubs. Unable to manually link this data, Amareld envisions blockchain as a way of simplifying this process.
As outlined by Amaerld, DLT-based solutions could help pick out data from various sources and help a procurement specialist to complete orders faster. Future start-ups could specialize in developing blockchain scripts that can compile information from a number of different hubs. This is one of the top digital transformation trends that Amaerld foresees happening over the next couple of years.
#2. Cloud Infrastructure with ‘Atomic Pricing’
Major cloud infrastructure provides such as Google and Microsoft Azure are racing towards atomic pricing, meaning that firms only pay for what they use. This is one of the top digital transformation trends in 2018, according to Digital Health’s CDO and Senior VP Shez Partovi. Whereas cloud storage firms previously had quite ridged pricing models, their new ‘atomic’ pricing structures are now flexible down to the second. Firms can rent storage and bandwidth according to their precise needs.
This pay-per-second basis is known as ‘atomic pricing’ and will undoubtedly fuel the ability of businesses to meet higher demands in the future. As reported by Esther Shien, Dignity Health’s cloud platform can automatically scale when it receives increased demand such as during flu season. Shien quoted Partovi as explaining that scalable cloud infrastructure means that ‘investment goes further’ due to atomic pricing models. Instead of purchasing legacy infrastructure, firms can free up capital and rent cloud infrastructure to meet their needs.
#3. Location Services
Location services is predicted to be one of the top digital transformation trends this year according to Partovi. In-person transactions still have considerable friction that can be alleviated by technology such as QR codes and mobile devices. For instance, when people arrive to a venue such as a stadium, hospital or train station, their in-person experience can be affected by factors such as whether they can find a parking space or whether they can find the ticketing machines.
According to Partovi, technology can be leveraged to “remove the friction” that people typically encounter. Dignity Health already offers ‘telehealth’ where physicians can interact with patients online. This year, they plan to offer pre-registration for patients to use when checking into a hospital. Alpa Shah, global vice president of digital transformation at Frost & Sullivan, notes that such strategies may be one of the best ways to “keep healthcare profitable in the future”.
To solve the problem of patients and their families being unable to find parking spaces at clinics or hospitals, Partovi plans to create a mobile-based solution. “Geolocation (can) enhance the experience,” says Partovi, who explained how visitors’ phones can interact with beacons that are positioned in hospital car parks. When the patients arrive, the beacons send a notification to their phone that reveals the number and location of spare parking spaces.
#4. Cloud-Based Identity Management
According to research by Gartner, there are 30 percent more ‘things’ (8.4 billion) on the internet today compared with one year ago. A big reason for this is that users are consuming more digital services such as Facebook, Netflix and Google. As services that don’t cooperate with each other in the identify management space are muscled out, the next logical step is to develop something akin to an online driver’s license.
In a recent CIO interview, Partovi believes that one of the biggest digital management trends for 2018 will likely be the move towards a single identity account for consuming services. Instead of users having to switch between their Facebook and Google accounts, a more universal, one-size-fits-all approach could be developed. Partovi predicts that “having so many identities online” will become an increasing problem over the coming year. He foresees a trend towards a universal, streamlined approach to identity management.
#5. AI and Machine Learning
Both CIO contributor Esther Shien and Forbes contributor Daniel Newman identified 2018 as the year when artificial intelligence (AI) and machine learning (ML) will go mainstream. Newman points to the widespread adoption of AI-powered virtual assistants such as Alexia and Apple’s Siri as evidence that AI is helping to improve customer service. For example, IBM’s cloud streaming service uses IBM’s supercomputer Watson to automatically generate subtitles and captions for videos as they stream.
Shien interviewed SenecaGlobal’s CEO Ed Szofer about the impact that AI is having on the way that people interact with each other. Szofer identified the move “from large central processing” towards smaller, local devices that are part of the Internet of Things (IoT). AI can power a whole variety of tasks such as facial recognition and threat detection in a streamlined, efficient way.
5 Digital Transformation Trends That Are Cooling Down
Now we’ve outlined the five hottest digital transformation trends for this year, here are five trends that we believe are cooling down.
Cooling down #1. Multiple Collaboration Tools
During a recent interview, Nintex’s VP of workflow technology Mike Fitzmaurice suggested that the trend of having multiple collaboration tools was cooling off. According to Fitzmaurice, the market has reached saturation point, with multiple services competing for the same customers. Any given office could have a wide range of tools, from Microsoft Teams, to LinkedIn communities and Slack groups. As outlined by Fitzmaurice, their days are numbered.
Fitzmaurice predicts that people will either abandon all of these services and return to email or that companies will pick the winners and invest in them heavily. The trend in having multiple collaboration tools will likely cool down in 2018 due to the rise of cloud-driven digital identities, as predicted by Digital Health’s Shez Partovi. Companies such as Google and Microsoft will invest in collaboration software and tools in order to attract people over to their platforms. Kyle Hutchins agrees with this assessment, confirming that there will be a “focus on consolidation, connectivity, and optimization” instead of new technologies being developed.
Cooling down #2. Cloud-first strategies
According to Bill Mayo, CIO of Broad Institute, the cloud-first strategy has “come and gone”. The approach of moving infrastructure and resources to the cloud doesn’t necessarily work for everyone. What was once a binary choice between on-premises or cloud-based environments is now significantly blurred. Opinions on the merits and disadvantages of cloud-based approaches are now far less polarized than they once were.
Mayo believes that there needs to be a balance between cost, speed, security and flexibility. He believes that cloud-first strategies are no longer appropriate and that both approaches should be considered, depending on the circumstances.
Cooling down #3. In-House IoT Platforms
According to the Frost & Sullivan survey referenced earlier, successful implementation of the Internet of Things (IoT) is a “top priority” for all major industrial sectors. Matthew Mead, CTO of SPR, revealed during a recent interview that in-house IoT platforms are increasingly being replaced with ready-to-use IoT alternatives. These enable companies to push their solutions to the market quicker and more cheaply. Frost & Sullivan’s survey data indicates that over a third of respondents are embedding IoT into their core services or products. Therefore, developing in-house IoT solutions is a trend that is likely to cool down this year.
Cooling down #4. Mobile-first approaches
Although Apple’s original iPhone is often held up as an example of a digital disruptor for the mobile phone industry, it was actually the introduction of the app store in 2008 that led to the iPhone disrupting the personal computing market, specifically laptops. The iPhone led to mobile phones overtaking laptops as the most popular way for consumers to go online. However, according to a recent CIO article, this trend is running out of steam. Software is returning to a desktop-first model as mobile-first approaches fall out of favor.
Cooling down #5. Cloud-Based Solutions for Real-Time Processing
The final trend that seems to be cooling in 2018 is having cloud-based solutions for apps that require real-time processing. As Forbes contributor Daniel Newman recently outlined, while the most valuable data will continue to be stored in the cloud, Cisco and HPE have made significant investments in edge computing. The data required to run apps and AI-powered smart devices in real time cannot practically rely on cloud computing. The move towards edge computing to handle the real-time data processing needs will shoulder out cloud-based alternatives.