Although it may not be obvious, digital transformation is underway in a majority of industries. Statista predicts that global spending on digital transformation will hit an all-time high of $3.4 trillion by 2026 with digitally transformed organizations contributing more than half of the global GDP. This figure demonstrates just how much companies are prioritizing digital transformation and implementing various strategies to achieve their digital transformation goals.
Although the impact of digitalization primarily affects the internal operations and culture within an organization, digital transformation also has far-reaching effects on the industry within which a business operates.
Today, many industries are a lot different from what they used to look like because players within the industry keep introducing digital functionalities and innovative services that are transforming the industry from top to bottom.
This post explains how industries are growing with digital transformation and the potential impact of this gradual industrial transformation on your business.
Experts across different industries believe that we’re in the middle of the 4th industrial revolution. This is often referred to as Industry 4.0 and it represents a new stage in how organizations manage and control their industrial value chain.
The third industrial revolution, Industry 3.0 was focused on automating individual processes and saw widespread adoption of automated systems across different industries. Industry 4.0 takes things a step further and is focused on end-to-end digitization of the physical assets of an organization to integrate them into a well-connected digital ecosystem.
Industry 4.0 paves the wave for enterprise-wide digital transformation, introducing new methods of production and real-time optimization of processes. At the end of the transformation that Industry 4.0 promises, traditional industrial companies will evolve into digital enterprises. The digital change will equip them to deliver innovative services with the help of digital interfaces, cloud-based databases, and automated digital workflows. While digital transformation will change individual companies, it will also change market dynamics across a wide range of industries.
Technology is never static. The implication of this is that industries that rely on technology always have to evolve too. In today’s digital age, there’s hardly any industry that is not evolving one way or another.
However, a few of them are poised to evolve faster than others or undergo more significant change than the rest. Based on recent trends and predictions, the following are some of the most rapidly evolving industries as far as digital transformation is concerned:
Industry 1.0, the first industrial revolution began with the manufacturing industry. This industry is also experiencing significant changes in the current wave of industrial digital transformation.
Digital transformation is quickly taking over the different sectors of the manufacturing industry. Several factories are becoming “smart factories” powered by new technologies that automate tasks and promote interconnectedness.
New innovative digital technologies such as Artificial Intelligence, Robotic Process automation, and the Internet of things (IoT) are the major drivers of change in the manufacturing industries.
Uber sparked a digital revolution in the transportation industry. Today, there are several other advancements ongoing within the industry. For instance, trucking companies have started using data to find efficient shipping routes and make safety decisions. With any luck, autonomous vehicles and drones are expected to hit the market within the next day, sparking a new way
The hospitality and tourism industry is one of the more traditional industries that has recently caught the digital transformation bug. Now there is growing adoption of digital technologies by hotels, tour agencies, and other organizations in the tourism industry.
Tourists can now book reservations online, hotels collect data and manage their internal processes digitally and Virtual Reality (VR) is making it possible to experience new locations from anywhere in the world.
The Healthcare industry is one of the leading adopters of digital transformation. Smart hospitals leverage digital systems to improve patient information access. The advent of telehealth and remote medical services is democratizing access to healthcare and changing how patients receive care.
All over the world, fintech companies are giving traditional banks a run for their money. To adapt, many banks and other financial service providers are forced to embrace innovation. The growing adoption of mobile payment solutions and other innovative financial solutions is proof that the archaic financial service sector is fast giving way to the more flexible fintech industry.
At the most basic level, digital technology has inspired a change in how students attend classes and access educational materials. Education providers now offer lessons virtually, reaching learners easily across different locations.
In addition to changing how students learn, digital transformation is also improving other day-to-day processes in schools such as internal communication, data management, information communication, and so on. All of these processes are being digitized from end-to-end promotion efficiency and accuracy.
The retail industry was one of the first to embrace digital transformation. Customers in search of a more convenient shopping experience often opt for retailers that offer online shopping solutions that allow them to buy all they need from the comfort of their homes.
New technology is also changing how retailers serve customers in their stores and manage their own internal processes for managing orders, returns, customer service, vendor relationships, and so on.
Digital transformation takes different forms within the different departments of a company and within different industries. As consumers become more digitally connected, the success of any customer-facing company is dependent on its ability to adapt to digital change within its industry.
Digital transformation is more than just adopting tech solutions. It is more about a foundational change in the way an organization operates. Digital transformation also changes how a business operates and how it engages with customers. It is all about disrupting the traditional way of delivering value to customers for digital alternatives.
Achieving this will require you to cultivate a digital culture, adopt new technology and upskill employees within your company to leverage these tech solutions. Generally, one can expect digital transformation to achieve two things within an organization, process transformation, and organizational transformation.
Process transformation is focused on changing internal day-to-day processes by leveraging digital technology. The goal of this approach, in the long run, is to drive operational efficiency, improve process accuracy and cut costs significantly.
It is impossible to achieve process transformation without a redefinition of the mindsets of employees and an upgrade of their skills and capabilities. Therefore, organizational change is a necessary part of digital transformation. Without this culture shift, employees will resist digital change and this is one of the leading causes of failure of the digital transformation initiative.
According to a survey, up to 67% of industries have accelerated the adoption of digital products in recent years. The adoption of digital technology in individual organizations has resulted in a dramatic change in business structures and models across a wide range of industries.
Digital transformation causes organizations to change internally. This results in a significant shift in the market in the long run. This is why executives of businesses across different industries are becoming more open to adopting digitalization to keep up with the competition.
Organizations that harness automation and adopt other powerful digital tools as part of their routine work structure are often better positioned to compete against other players within their industry.
In many cases, this often ends up changing the entire business model of an industry. The impact of digital transformation on industries is often in terms of business model transformation and domain transformation.
Companies that adopt digital transformation successfully are often able to move into new domains of their industry that would have been otherwise inaccessible to them. This is part of what acquiring and leveraging new technologies can do to a business or an entire industry.
For instance, after successfully implementing a digital transformation in the cab-hailing business, Uber started Uber Freight, connecting shippers to carriers. This innovative use of technology could potentially transform the Logistics business from top to bottom.
Digital transformation can also cause fundamental changes in the prevalent business model in the industry. Digitalization causes changes in processes, technology, and personnel.
These micro changes within an organization may eventually spill into an entire industry, turning the popular business model on its head. For instance, the entrance of Netflix into the video distribution industry has completely transformed the industry and displaced the traditional business model.
Digital transformation creates value for individual companies and entire industries. Adopting digitalization introduces innovative solutions to traditional challenges organizations within an industry are trying to solve. The following are some real-life impacts of digital adoption across various industries:
The pace of digital transformation has quickened in recent years thanks to the COVID-19 pandemic. But even before the Coronavirus hit, healthcare providers have been adopting new technology to improve patient data collection and report management.
Digital transformation also helps providers deliver enhanced patient care by improving the efficiency and accuracy of internal processes.
Digitalization has been driving agility in the retail business for years. Digital transformation helps retail businesses deliver excellent customer experience by introducing digital measures that improve the buyer journey quite significantly.
For instance, Artificial intelligence is helping retailers to better understand their customers and deliver more personalized services for them. Digitalization can also help retailers automate tedious and error-prone processes in service delivery.
The financial services industry has been shifting rapidly in recent years thanks to increased technology adoption. In fact, providers that offer digitized services are often a preferred choice for customers compared to those that do not.
The financial services industry benefits from process automation, service personalization, and reduced paperwork as a result of digitalization.
Innovative technologies such as IoT, smart manufacturing, data-driven risk analysis, and so on are disrupting the typically traditional manufacturing industry. This has the benefit of improving both the quality and efficiency of work while also driving operational costs down.
The hospitality industry is one industry where human interaction is still more prioritized over technological advancement. For years, online bookings have been a norm in the industry, but the future looks even better.
The industry is starting to see increased digital adoption with the rise of Virtual Reality technology that allows tourists and visitors to get 360 views of locations they’re visiting even before they arrive. This is just one of many ways digital adoption could transform hospitality.
Digital engineering has been generating quite a buzz recently. With new technologies, engineering organizations can improve communication and collaboration within their teams and make data-driven decisions that guarantee better outcomes.
Digital transformation platform brings agility to entire industries, transforming the business model and improving competition between players within the industry. Industry 4.0 is all about revolutionizing the way companies operate and digital transformation is right at the center of it. As an organization operating in the new normal of the 4th industrial revolution, prioritizing digital change will favor your growth and competitiveness within your industry.
Kissflow is a unified work platform that simplifies work management and dramatically accelerates digital transformation. The platform helps you leverage the unique opportunities of the digital transformation journey to innovate and grow. You’ll build a strong foundation, minimize risks, make the most of the digital process, and smoothly transition into a digital organization.