6 hot digital transformation trends — and 4 going cold

Now considered essential to driving profits, digital transformations are shifting from platform-first strategies to initiatives that leverage emerging technologies in service of clear customer and operational goals.

Digital transformation has moved beyond a nice-to-have to let’s get cracking. Once a top priority for early adopters and cutting-edge enterprises, digital transformation has moved into the mainstream. Few would argue that digital transformation initiatives are vital to the success of their organization.

In fact, 64 percent of respondents to a 2017 Constellation Research survey said digital transformation is essential to driving profits.

A recent Frost & Sullivan survey looking at end-user perspectives on navigating digital transformation globally, found that improving digital presence will be a top driver for IT investment over the next two years. Other broad goals respondents have for their organizations include reducing operational costs, improving the customer experience, and aligning IT with business strategy.

Here is a look at some specific digital transformation trends that are on organizations’ radars right now — as well as once hot initiatives that are beginning to cool.

Heating up: Location services

Connecting with patients and “creating an intensely positive digital experience” is top of mind at Dignity Health, says Dr. Shez Partovi, chief digital officer and senior vice president of digital transformation at the healthcare system, which is merging with Catholic Health Initiatives. To do that requires “removing friction” and engaging with patients wherever they are, he says.  

Dignity Health launched its digital transformation in 2016. Already it is deploying remote care and telehealth with an app that lets users find a physician, book an appointment, and conduct “video visits.” On tap for this year: pre-registering for check-in to a clinic or pre-admission to a hospital.

One of the big pain points for patients and their families is finding parking when they arrive at a hospital or clinic. “What we see heating up is the combination of the information you can present using a mobile device, whether a QR code or bar code … with geolocation to enhance the experience and simplify the in-person transactions,’’ says Partovi.

Location services will indicate the best place to park when patients arrive at the parking lot, as well as how to navigate the hospital to get to where they need to be. Some Dignity Health facilities have beacons that, when patients arrive in the parking lot, “wake up your phone and say, ‘Welcome, do you need directions to get to where you’re going?’ This will help us connect with people and simplify their journey,” he says.

When people enter places like an airport or a ballpark, there are in-person transactions that still have friction, Partovi notes. “We see an opportunity to leverage technology to remove the friction of when you’re physically in the space. “We’re turning our attention to transforming the in-person experience.”

Reducing costs while improving customer care is critical; meeting customers when, where, and how they need it “may be the only way to keep healthcare organizations competitive in the near future,” agrees Alpa Shah, global vice president of digital transformation at Frost & Sullivan. “The ease of video conferencing, the ability to receive text message updates on appointments or medication reminders, and the growth of wearable devices all make healthcare a leading industry in digital transformation.”

Cooling down: Cloud-first strategy

These days, rethinking an organization’s infrastructure typically means moving workloads and apps to the cloud. That’s not necessarily the right approach for everyone, though. “I get the sense that [a cloud-first strategy] has come and gone,’’ says Bill Mayo, CIO of Broad Institute, a biomedical research institute based in Cambridge, Mass. “If you’re just now declaring that cloud works for you, you’ve got a little answering to do for what you’ve been doing for years.”

What makes the most sense is being able to “blur the lines between a cloud or on-premises environment — and that it’s not a binary choice anymore,’’ he says. For a long time, people felt they couldn’t move to the cloud because of security issues, or their data was too sensitive or because of concerns about being locked in to a provider, Mayo says. Then there were the pro-cloud zealots who preached that everything should move to the cloud for all the benefits organizations would reap, including reduced costs, storage and scalability.

“We’re beyond the stage where one [approach] is wonderful and the other is terrible,’’ Mayo maintains. “The fact is, I’m not after either architecture. I’m after some balance of flexibility, security, cost and speed, and sometimes that points me to a cloud solution and sometimes it points me to an on-premises solution.”

Heating up: ‘Atomic pricing’ in the cloud

Data transformation initiatives require very robust, reliable and scalable cloud infrastructure. Cloud services are fueling them with what Partovi calls atomic pricing: when an organization can buy infrastructure on a per-second basis, he says.

During flu season, for example, he notes, the hit rate for information on the flu “scales to millions of hits, and Dignity Health’s cloud platform can scale automatically to accommodate the higher demand. “These sorts of advantages have made us bold when it comes to purchasing cloud infrastructure, and we’re willing to invest even more because our investment goes further, since we’re only paying for our atomic demand.”

Cloud provides incredible economies of scale, Partovi says. “I don’t need to purchase legacy infrastructure and support it while we wait to scale. Leveraging economics in cloud infrastructure are, without question, a big part of my digital strategy.”

Pricing for compute, bandwidth and storage on cloud providers like AWS, Google and Microsoft Azure is down to a second, he says. “They are racing to go atomic and we are delighted. I only pay for what I use. It’s like being at a fabulous buffet … you only pay for what you take, but the menu choices are amazing.”

Cooling down: Build-it-yourself IoT platforms

In-house internet of things (IoT) platforms are falling out of favor as major vendors and consulting firms are leveraging ready-to-use IoT platforms, claims Matthew Mead, chief technology officer of digital technology consulting agency SPR.

“Previously, platforms were not available, so companies were forced to build their own, typically using cloud-based technologies as their base,’’ he says. “These new and emerging IoT platforms allow companies to get to market more quickly, for less money and with a richer set of features.”

The Frost & Sullivan survey found that overall, across major industry sectors, successful implementation of IoT is a top priority. The level of IoT deployment has moved from watching and learning to mid- or large-scale trials among 35 percent of respondents and embedding of IoT into core services/products among 34 percent of respondents, says Shah. In addition, 40 percent of respondents said they are deploying next-generation offerings.

Heating up: Blockchain for business

Right now, it’s unclear all the ways in which blockchain can be used in an enterprise, and implementations are few and far between. Yet, that’s not stopping some companies from eyeing blockchain technology with great interest.

“One immediate benefit we have seen from this technology is in our contract agreements,’’ says Chris Rothstein, CEO of sales platform company Groove. “Smart contracts are an emerging technology that I expect, along with several of the capabilities of blockchain that we are still discovering, will gain in popularity in the coming years.”

“We’re seeing an exponential increase in interest regarding blockchain technologies,’’ says Mead. “While cryptocurrency such as Bitcoin gets most of the headlines, we’re seeing more interest from Fortune 5000 companies in smart contracts using the blockchain distributed ledger.”

This immutable ledger not only can eliminate some middleman costs and complexity, but “also stands to return control of some data to citizens,’’ he says.

Blockchain is also on Bob Amareld’s radar. Amareld, associate director of strategic operations and technology for global procurement at Biogen, hopes there will be lots of startup consultancies that will help him simplify the process of taking his disparate data sources and have a blockchain script be able to read them, so he doesn’t have to build something from scratch.

“I think that technology has huge utility, but it’s in the wrong place in the hype cycle,’’ Amareld says. “If I’m going to spend a lot of money, I need to be sure it’s going to work.” He envisions a time in the near future when all of his data can be linked together in one blockchain and using a dashboard tool to pull together data sets and link an invoice to a purchase order and then to a contract.

“Right now, I’m stuck in an area where there’s many different data hubs,’’ he says, noting that the ERP system Biogen’s procurement group uses has five to 10 data hubs that might talk to one another, “and I need something that pulls them together. You can’t manually link everything.”

Cooling down: Mobile-first and tablets

A few years back, lots of organizations were trying to build their software to be mobile-first. The thought was that everything would move to mobile in a few short years, effectively making computers and other office staples obsolete.

Similarly, people expected tablets to take off as the new way to do business because they were mobile, powerful and relatively easy-to-use.

“We didn’t see either of these trends play out, though,’’ says Rothstein. “In fact, we are now seeing this trend reverse, as software has returned to a desktop-first model, only supporting the development of mobile and tablet apps afterward.”

Heating up: Identity management in the cloud

As users begin consuming more and more digital services, it’s becoming more critical to manage one’s identity in a single online persona instead of having to use their Facebook or Google accounts. In keeping with the as-a-service movement, Partovi believes identity as a service is the next big thing: a single identity account for consuming services so a user doesn’t have to constantly prove they are who they are — sort of like an online driver’s license, he says.

“What’s cooling is solutions that aren’t willing to play nice in the identity management space,’’ he says.

The challenge will be coming up with a way to manage identities on a global scale, Partovi says. “In the world of digital transformation, it’s almost a necessary step to simplify identity management. Otherwise, we get crushed by the weight of having to manage so many identities online.”

Cooling down: Multiple tools for collaboration

The days of using lots of different collaboration tools are numbered, observers say. In one company alone, you might find Slack, Chatter, Yammer, Microsoft Teams, Office 365 Groups, Trello, Office Planner, LinkedIn communities, and countless other offerings.

While the competition may prompt new levels of utility and innovation, “it's driving users and IT crazy,’’ says Mike Fitzmaurice, vice president of workflow technology at Nintex. “We're approaching the point where organizations are going to have to pick winners and invest in their usage and adoption, or people are going to give up and go back to email.”

When figuring out which tool to use takes more time than doing the actual work, Fitzmaurice says, “we have paralysis, not productivity.”

While there will continue to be investments in unified communications and collaboration tools, Shah says Frost & Sullivan is seeing that companies like Microsoft and Google are gaining tremendous traction with collaboration software consumer messaging and calling services like Skype and Google Voice. “This will definitely shake up the traditional on-premises communications companies,’’ he says.

And while digital marketing is here to stay, there is a proliferation of these tools in enterprises as well, says Kyle Hutchins, a senior director in the customer experience practice at West Monroe Partners. “I don't see new technologies being developed, and instead, there will be a focus on consolidation, connectivity, and optimization. That's where the dollars and resources will go.”

Heating up: AI, machine learning

While artificial intelligence has been gaining momentum, there is increasing interest in using a subset of AI, machine learning, which is sometimes referred to as “narrow AI.”  

“Narrow AI is the discipline where statistical approaches allow software algorithms to improve the reliability and effectiveness of particular tasks over time with experience,’’ says Mead. “Today, narrow AI can provide a competitive advantage, but in the future, this sophisticated statistical analysis will be required to satisfy the end-user expectations that come along with digital transformation.”

AI technology is moving “from large central processing to local devices (IoT) working on their own out on the edge and ultimately in concert with each other,” says Ed Szofer, CEO of SenecaGlobal.

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