What’s the first thing that comes to mind when you think of digital transformation? Generative artificial intelligence (AI), machine learning, chatbots with feelings?
Or even incredible, mind-bending optical illusions whilst visiting Camera Obscura in Edinburgh? The maze that’s intertwining the field of Digital transformation is filled with magic and mystery.
Despite the spell-binding breakthroughs we’ve seen over the years, this space can experience the most subtle refinement that takes the era of convenience and efficiency to new heights. Take generative AI, for example, an area that could add as much as $4.4 trillion in economic value across a mosaic of use cases [1].
Model use cases
Wizardry aside, Digital Transformation can take a variety of forms: whether it be implementing AI, deploying solutions in the cloud to going e-commerce. Before looking at what the future holds, here’s a couple of examples of the impact digital transformation can really have on an organization and its community.
First up: the mining industry. Let’s take the company, Freeport-McMoRan. With the aim of increasing the site's copper output with minimal capital injection, the organization leveraged the power of AI through a blend of cross-functional teams across Product, Finance, Project Management, and more.
Over time and as a result of the AI’s model recommendations, the copper mill’s production saw a substantial increase, and in the fourth quarter of 2018, Bagdad’s throughput exceeded a whopping 85,000 tones of ore per day: 10% more than the previous quarter. [2]
Another company that took digital transformation to new heights was Netflix. Founded back in 1997 as a DVD rental service, they’re now a streaming behemoth: gaining a 20% market share in North American Viewing traffic back in 2010 and had an estimated valuation of $31.6 billion back in 2022 [3]. They’re to date, one of the largest companies for subscriber numbers, sitting as of the second quarter of 2023 at shy of 240 million subscribers [4].
The future of digital transformation
The two use cases are just a small example of the many great things companies do with digital. It’s an exciting time to be in Digital Transformation and there’s lots of cool stuff on the horizon.
For example, Gartner is forecasting low/no-code platforms will account for over 65% of software development by 2024 [5]. Without the need for formal training, low/no-code platforms have changed the way early-stage startups can get their idea into the market whilst simultaneously minimizing costs. Ultimately
there’s space in the market for everyone, and time will tell what cool software ideas people come up with.
In addition, another space needing no introduction apart from the thought: of where will it go next, is generative AI, namely ChatGPT (Chat Generative Pre-Trained Transformer).
From every corner of the planet, ChatGPT is permeating into almost every industry. Similar to low/no-code platforms, ChatGPT is helping content creators, educators and even CEOs turn ideas into a reality with a couple of taps.
However, the ethical angle is under increased scrutiny: hallucination and lawsuits have seeped in as the technology has gained traction, so it’ll be a policy vs. pace race to ensure those leveraging this technology are fully aware of its benefits and pitfalls across the spectrum of stakeholders.
Lastly and more broadly, the umbrella of automation brings up an important task facing businesses: how to balance the convergence of the digital and physical landscape.
Whether it be supply chain, customer experience, or employee productivity, some Salesforce surveys found that 89% of workers are more satisfied with their role as a result of automation [6].
In addition, the consumer values it too, with 33% saying that continuously repeating themselves is their biggest frustration [7]. COVID-19 fundamentally changed how businesses thought of digital, and it’s going to remain that way for a very long time.
Can we still call it digital transformation?
Absolutely. However, digital transformation doesn’t need to be radical to transform a business. The smallest difference, for example, increasing automation in the supply chain, could make the difference for the consumer, and ultimately they’re the ones that’ll not just bring the value, but they’ll feel the value.
In addition, generative AI’s meteoric rise through the introduction of ChatGPT will continuously send shockwaves through the digital transformation arena as the space becomes increasingly advanced, and thus it’ll be a delicate balancing act to maintain appetizing potions in the technology cauldron.
Bibliography
[1] McKinsey Tech Outlook: Chui, M., Issler, M., Roberts, R. and Yee, L. (2023). McKinsey Technology Trends Outlook 2023 | McKinsey. [online] www.mckinsey.com. Available at: https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/ the-top-trends-in-tech#new-and-notable.
[2] AI and Mining Case Study: www.mckinsey.com. (n.d.). Inside a mining company’s AI transformation | McKinsey. [online] Available at: https://www.mckinsey.com/ industries/metals-and-mining/how-we-help-clients/inside-a-mining-companys-ai transformation.
[2] Examples of Digital Transformation: Mckinsey & Company (2023). What is digital transformation? | McKinsey. [online] www.mckinsey.com. Available at: https:// www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-digital transformation.
[3] Netflix Digital Transformation: Magenest - One-Stop Digital Transformation Solution. (2023). Successful Digital Transformation Case Studies: 8 Best Examples. [online] Available at: https://magenest.com/en/successful-digital-transformation case-studies/ [Accessed 3 Oct. 2023].
[4] Netflix Subscriber Numbers: Statista. (n.d.). Netflix: number of subscribers worldwide 2023. [online] Available at: https://www.statista.com/statistics/250934/ quarterly-number-of-netflix-streaming-subscribers-worldwide/#:~:text=Quarterly%20Netflix%20subscribers%20count%20worldwide%202013%2D 2023&text=Netflix%20had%20around%20238.39%20million.
[5] Digital Transformation Trends: FDM Group. (n.d.). Top 5 Digital Transformation Trends for 2023. [online] Available at: https://www.fdmgroup.com/blog/digital transformation-trends/.
[6] Salesforce Automation Surveys: December 2 and 2021 (2021). New Salesforce Research Links Lower Stress Levels and Business Automation. [online] Salesforce. Available at: https://www.salesforce.com/news/stories/new-salesforce-research links-lower-stress-levels-and-business-automation/.
[7] Consumer Automation: getzowie.com. (n.d.). 5 Advantages of Customer Service Automation. [online] Available at: https://getzowie.com/blog/advantages-customer service-automation.
