by • December 8, 2020
Digital technologies have been advancing at a breakneck pace, and companies are taking advantage in order to beat their competitors and better serve their customers. According to the 2018 “State of the CIO” report, 40 percent of IT budgets are now allocated for the express purpose of digital transformation regardless of industry. What’s more, 70 percent of companies say that they either already have a digital transformation strategy, or they’re working on putting one into place.
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While all of these organizations may share the overarching goal of digital transformation, however, the way that these initiatives are implemented may look very different, depending on a company’s size, products, internal workflow, customer base, and much more. One of the most important factors in digital transformation is a company’s particular industry—so what does that look like in practice?
Below, we’ll discuss the impact of digital transformation on 7 different industries, as well as the lessons that we can learn from each one.
As a customer-facing industry, retail stands to gain a great deal from the various possibilities of digital transformation.
For one, many retail businesses are researching how to use customer analytics more intensively and effectively. This includes everything from adjusting the counts of products in stock at each store to predicting which e-commerce purchases are most likely to be returned. A report from McKinsey & Company has shown that savvy users of analytics are 23 times more likely to excel at acquiring new customers, and 19 times more likely to be highly profitable.
Augmented and virtual reality experiences also have a great deal to offer shoppers, both for brick-and-mortar outlets and e-commerce stores. According to Goldman Sachs, the AR/VR market for retail will reach a total of $1.6 billion by 2025, touching an estimated 32 million users.
Many retailers have already used AR/VR to show how a product or item of clothing will appear to the customer in real life. The IKEA Place mobile app, for example, uses augmented reality to combine a virtual image of furniture with the smartphone’s camera input, letting users visualize how it will be placed in a room.
Much has been written of the impact of digital transformation in manufacturing, where “smart factories” are undergoing the “Industry 4.0” revolution of automation and big data. In addition, the rise of the Internet of Things (IoT) has been tremendously impactful for digital transformation initiatives in manufacturing, where it’s known as the Industrial Internet of Things (IIoT).
For example, IoT devices—from temperature and air pressure sensors to infrared cameras—placed strategically throughout the facility can monitor equipment and collect valuable insights that would otherwise be invisible to human workers. Another transformative digital technology is the “digital twin,” a virtual model that simulates a given object or process in order to detect and prevent potential issues before they become a very real problem.
Automation and robotics, of course, is another highly disruptive technology for the field of manufacturing—and there’s still a great deal of untapped potential. According to a McKinsey analysis, 64 percent of manufacturing-related activities can be automated with existing technology, representing a global value of $2.7 trillion in human labor. Another study found that investing in robotics was responsible for 10 percent of GDP growth in OECD countries between 1993 and 2016.
By being receptive to emerging treatments and technologies, the healthcare industry has the potential to dramatically improve the quality of patient care.
Computer vision and artificial intelligence, while broadly applicable across industries, are especially valuable for the healthcare field. For example, medical professionals in the U.S. are (in)famously overworked, which leads to problems (sometimes life-threatening) such as misdiagnoses and patient misidentification.
Trained computer vision systems, supplemented by input from human experts when necessary, can do a great deal to correct these errors. One such AI system, trained on CT scans of patients’ lungs, can detect the presence of COVID-19 pneumonia with an accuracy of 90 percent, Meanwhile, rapid and highly accurate facial recognition systems can authenticate a patient’s identity and ensure that only employees have access to restricted areas.
Wearable technologies and telehealth are two other digital technologies that are transforming healthcare. Devices such as ECG monitors, blood pressure monitors, and even sensors to detect early signs of Alzheimer’s disease are all under development or already available. Meanwhile, telehealth services have revolutionized medical care for patients who are unable to visit a doctor in person (especially during the COVID-19 pandemic).
Digital transformation projects are also radically affecting the ways in which sales and marketing professionals do their work. According to a 2019 survey of B2B marketing decision-makers, 81 percent see digital transformation as “key for their business.” For these movers and shakers, the top priorities include “activating more digital media and channels,” using targeting and segmentation data, using lead scoring, and enacting sales/marketing alignment.
A dedicated CRM (customer relationship management) system must be at the heart of any digital transformation initiative for sales and marketing. Among other features, CRM software can automatically monitor and record all of a sales professional’s interactions with potential buyers.
In doing so, CRM systems help to deliver a more personalized and meaningful sales pitch that’s more likely to address a potential customer’s pain points. Automating the sales process will also significantly increase your sales team’s productivity—sales reps spend just 36 percent of their time on actually selling.
What’s more, the right choice of CRM system will have positive ripple effects on the rest of your business: for example, CRM software can also integrate with cutting-edge data and analytics tools, so that sales teams can make better forecasts and get smart, actionable insights.
According to Bain & Company, a successful digital transformation in the telecom industry could increase EBITDA and customer satisfaction by up to 30 percent, while improving employee satisfaction by more than 50 percent. Like manufacturing, the telecom industry is among those that stands to gain the most from the growing adoption of IoT technology. This includes:
In particular, the ongoing rollout of 5G networks is a potential game changer for telecom companies. As many locations reach customer market saturation, 5G is considered to be one of the telecom industry’s biggest possibilities to add revenue. The telecom companies that take advantage of 5G’s increased throughput, reliability, and mobility will be those best positioned for success in the short and medium terms.
Digital transformation is upending the financial industry, forcing heavyweights to compete with young upstarts with fresh new ideas. Fintech companies such as digital banks, with their competitive rates and ease of use, offer compelling alternatives to brick-and-mortar outlets, especially for those who have been left behind by the traditional banking system.
According to McKinsey, new digital technologies can revolutionize the finance and banking industry in four different ways:
Last but not least, digital transformation in the transportation and logistics industry can help companies make deliveries faster and more profitably, and get a leg up on their competitors. The most common challenges of the transportation and logistics industry include underutilization of resources and assets, inefficiencies in the supply chain, and issues with integrations and visibility across different systems.
According to Harshit Sharma, analyst at Lux Research: “Currently, digital transformation of logistics is in its infancy and offers a host of opportunities for further development.” As with many other industries, increased investments in data and analytics are likely to pay dividends for transportation and logistics. Data-driven insights can help these companies speed up their workflows, make better predictions, and even come up with new ideas and business models.
Meanwhile, technologies such as IoT offer greater visibility into the supply chain, ensuring that the process is transparent from start to finish. Some companies have even experimented with using the blockchain, a decentralized ledger technology that is extremely difficult to modify by a malicious actor, in order to track shipments and guarantee the authenticity of their products.
From retail and manufacturing to healthcare and finance, there’s no industry that will be left untouched by digital transformation—which is why it’s so important to ensure that you don’t get left behind.
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