Shifting customer buying preferences and disruptive technologies are forcing companies to embrace digital transformation so that they can compete in today’s dynamic marketplace. The IDG 2018 State of Digital Business Transformation survey found that nearly 90% of organizations have either adopted or plan to adopt a digital-first strategy.
What are the top digital transformation trends, technological and otherwise, that your organization should be aware of as we approach 2019? Let’s take a look at what you can expect and examine some of the digital transformation solutions Microsoft offers to help your organization achieve its goals.
Microsoft CEO Satya Nadella has said that in our always-on digital economy, every company is now a software company and must think and operate like a digital company to survive. However, there is a significant IT skills shortage, not just of software developers but across the board, and it’s impacting companies’ digital transformation efforts. According to one survey, over half of global organizations have been forced to alter their digital transformation plans due to the IT skills gap.
Forward-thinking companies who need technologically literate workers right now have realized they don’t have time to wait for the education system or the government to solve the problem. They are growing their own talent by upskilling current employees. At last year’s Ignite conference, Microsoft introduced Microsoft 365 F1, which combines together Office 365, Windows 10, and Enterprise Mobility + Security to deliver a complete solution that companies can use to upskill firstline workers, the customer-facing employees behind the counter, on the phone, in the clinics, on the shop floor and in the field.
Meanwhile, Azure IoT Central, which was made generally available during this year’s Ignite conference, allows for simple and rapid IoT solution development. Users with no cloud solution development expertise can use IoT Central to provision an IoT solution in seconds, customize it in a few hours, and go to production the same day.
The End of Data Silos
An organization’s data is its most valuable resource, but big data is nothing but a big headache when it is difficult or impossible to extract actionable business insights from it – including information that could help improve the customer experience and allow organizations to make educated decisions about their digital transformation efforts. Most enterprises use a variety of solutions developed by different vendors, which store data in different places and in proprietary formats that are incompatible across systems and applications. Extracting, reformatting, and combining this data is difficult, time-consuming, and costly, and it hinders data governance, compliance with privacy regulations such as the EU GDPR, and cybersecurity.
This is why the Open Data Initiative, a partnership between Microsoft, Adobe, and SAP, was arguably the most significant announcement to come out of MSIgnite 2018. The goals of the Open Data Initiative are to break down data silos and make accessing and combining enterprise data easier by adopting a standardized data model and utilizing a common data lake in Microsoft Azure. Users will be able to exchange and enrich transactional, operational, customer, and IoT data bidirectionally between the Azure data lake and Microsoft, Adobe, and SAP applications and platforms.
Many articles about digital transformation cite the Internet of Things (IoT) as a “trend.” However, as industrial IoT and corporate innovation expert Maciej Kranz has pointed out, IoT is not “transformational” in and of itself; the transformation occurs when IoT is combined with other technologies. One of these technologies is the concept of digital twins, which are digital models of real-world entities or systems that IoT developers can use to see how their devices will perform and interact within certain spaces. Industrial equipment manufacturers already use digital twins, but the technology can be adapted to create next-generation IoT solutions for all environments, including office buildings, homes, public spaces, hospitals, streets and intersections, and even entire cities.
Azure Digital Twins, which recently launched in preview mode, will allow developers to create virtual replicas of physical environments that integrate data from different sources and model the relationships between the people, places, and devices within those environments. This will generate invaluable spatial intelligence that can be used to build smarter devices and spaces, including solutions to optimize energy consumption and space usage, enhance the occupant experience, and much more. Further, Azure Digital Twins’ spatial intelligence graph will also allow developers to attach and store maps, documents, manuals, pictures, and other information as metadata to the spaces, people, and devices in the digital model.
Digital models made with Azure Digital Twins connect directly with real-world devices and sensors, ensuring that the digital model is always up-to-date.
IoT at the Edge
Edge computing is another technology that transforms IoT devices by enabling them to operate and perform calculations in environments where internet connectivity is spotty, such as on offshore oil rigs or other remote locations. Edge computing also reduces connectivity costs and conserves network and computing resources by transmitting only the data that needs to be sent. It can also be used to improve data security and privacy by anonymizing, analyzing, and storing sensitive data on the IoT device.
Microsoft Azure simplifies edge-to-cloud connectivity through such features as:
- IoT Edge extended offline. Now available in preview, this feature will allow IoT devices to operate offline for extended periods.
- Azure Data Box Edge, also available in preview, allows devices to pre-process data at the edge and efficiently move it to Azure. FPGA hardware natively integrated into the appliance enables devices to run machine learning inference algorithms at the edge.
- Artificial intelligence capabilities that allow users to combine data in the cloud and from the edge to develop and test machine learning models, which can then be distributed to run on certified devices powered by Azure IoT Edge.
AI & Machine Learning
Artificial intelligence and machine learning aren’t new trends, but we can expect to see new and disruptive applications of these technologies emerge in 2019 and beyond, from chatbots to autonomous devices. Gartner predicts that AI co-developers will be present on 40% of new app development project teams by 2022.
In 2016, Microsoft’s CEO said that Azure would become “the world’s first AI supercomputer,” and AI was the star of many customer innovation stories shared at MSIgnite 2018. Microsoft also made numerous announcements about Azure’s machine learning/AI stack, including the availability of speech services, such as speech-to-text, text-to speech, and translation through Azure Cognitive Services, as well as an upcoming integration of Azure Cognitive Services and Automated ML into Microsoft Power BI.
Ensuring Data Privacy and Cybersecurity
From massive data breaches that cost organizations millions of dollars to government regulations such as the EU GDPR and the California Consumer Privacy Act, cybersecurity and data privacy issues pose significant stumbling blocks to digital transformation efforts. Organizations are stepping up their data governance efforts and shifting from reactive cybersecurity to proactive measures that prevent attacks.
Microsoft Threat Protection, unveiled at MSIgnite 2018, is a comprehensive, end-to-end enterprise security solution. Data from Office 365 Threat Intelligence, Azure Active Directory Identity Protection, and Windows Advanced Threat Protection are integrated into one centralized dashboard so that administrators can get an overall view of their organization’s threat landscape. AI is employed to detect known and new threats and even offer solutions to address them.
Putting Employees and Customers at the Center of It All
Changing employee and customer expectations, not technology, are driving digital transformation, and organizations are realizing that when they put the needs of their employees and customers first, everything else falls into place. A study conducted by Forrester Consulting, on behalf of consulting firm Ernst and Young LLP, found that financial firms that took a customer-centric approach to digital transformation had much better results than companies that focused on cost reduction. Placing customer satisfaction at the center of digital transformation efforts promotes employee innovation, increases revenues, and improves profitability while creating sustainable, scalable processes.
Digital transformation isn’t just about using technology to cut costs or improve efficiency. Sustainable digital transformation requires fundamentally reworking business models and processes to promote customer engagement and employee empowerment. Technological tools are just that – the tools by which we achieve these goals – and increased efficiency, revenues, and profitability are the byproducts of employee and customer engagement and innovation.