We’ve done COVID-19 transformation. But what’s next in terms of digital transformation? The Grant McGregor team considers how digital transformation might evolve through 2022 and beyond.

For IT and business leaders, the huge rush at the start of the pandemic to facilitate work from home arrangements demonstrated what can be achieved in terms of digital transformation when the will to do so is evident.

Many organisations reported that several years of digital transformation had been achieved in a few short days or weeks.

Now, having seen what’s possible, the stakes have been raised.

Businesses that press ahead with digital transformation at the speed seen during the early days of the pandemic have the potential to leave their digital-laggard competitors in the dust! However, questions still exist. Now, instead of asking “is it possible?” we need to be asking ourselves “what is desirable?”.

To this end, the Grant McGregor team has looked at a number of sectors to see what’s on the horizon in terms of digital transformation.

Retail

The impact of COVID-19 on retail has been extreme. At the same time, established players in the sector are grappling with the twin challenges of globalisation and disruptive new entrants.

Fujitsu’s(1) 2021 survey of digital transformation trends in retail found that the only top-ten priority from 2020 that remained a top priority in 2021 was combined online and physical presence.

It says this shows how organisations are adapting business priorities and digital transformation initiatives to the new market conditions resulting from the pandemic.

It found that 78 percent of retailers plan to invest in digital marketing – making it the number one digital priority overall. This reflects the shift to online during the pandemic. The next priority for retailers was demand forecasting using multi-factor models. And the enhanced recommendation and marketing of products and services was also a high priority.

These findings were corroborated by research conducted by Gartner’s retail insights team(2). It identified some big opportunities for retailers:

• Retailers must expect greater online purchasing demand to continue. This might mean remodelling physical locations to reduce selling footprints, increase onsite fulfilment and curb-side capabilities.

• Inventory is typically a retailer’s biggest expense. Cost optimisation and waste reduction can be achieved by improving the management of inventory and avoiding dead inventory through investment in IoT technologies such as RFID and smart shelving. Merchandising and supply chain will also offer performance improvements through better data and analytics.

• Customers expect safe, touchless retail experiences. These touchless experiences – whether for research, purchasing or consumption – should include personalisation and loyalty rewards.

• Cross-channel experiences should be seamless. Plus, customers have increasing expectations for prescriptive recommendations.

• Building digital communication services for store staff will help to help to grow employee trust, build a support structure across store teams, improve communication and enable staff to go the extra mile and serve customers better.

Law

The legal sector has traditionally been a laggard when it comes to technology innovation. However, things are changing, with many practices embracing the cloud and cloud-based practice management solutions.

Deloitte(3) says that “technological advances offer legal the prospect of a changing workload through automation, analytics, and artificial intelligence.”

In particular, automation and process redesign could help to reduce costs significantly and create efficiencies – particularly when it comes to compliance and other recurring legal tasks.

In conjunction with this, a report jointly published by Linklaters and Microsoft(4) identified opportunities to use digital technologies and process automation to enhance client communications and build better partnerships with clients.

Finance

In recent years, the finance sector has been a magnet for tech investors, with disruptive new software solutions and disruptive market entrants changing customer expectations and the way the sector does business.

Deloitte(5) predicts that self-service will become the norm. Furthermore, it says transactions will be touchless as automation and blockchain reach deeper into finance operations.

Automation is also set to increase, with robots, chatbots and algorithms undertaking recurring tasks.

Within organisations, Deloitte says that microservices and specialist applications will replace traditional ERP systems and real-time finance reporting will become the norm for all decision making. It also warns that while the proliferation of APIs will drive data standardisation, it won’t be enough. Data optimisation will continue to be a key focus for organisations.

Public Sector

In the public sector, COVID-19 has revealed the importance – and the benefits – of digitalisation. McKinsey & Company(6) emphasises that “unlike physical offices, digital services can stay open to the public 24/7 and stay open during public-health crises such as the COVID-19 pandemic... Moreover, automating case handling significantly boosts productivity.”

It also points out that “public sector employees also stand to benefit from digitalisation; fewer repetitive tasks and happier residents pave the way to higher levels of job satisfaction.”

To this end, local and national government is rapidly adopting cloud-based solutions that enable remote and mobile working and make it possible to move increasing numbers of services online.

Tools to automate repetitive tasks or enable online self-service functionalities for customers continue to be a focus of investment.

Low-code and no-code development tools, such as the Microsoft Power Platform, put the power to develop solutions and automate processes in the hands of frontline staff – making the transition to digital service delivery faster and more focused on the needs of users.

However, 93 percent of public sector organisations told Deloitte(7) that workforce and skills are challenging their transition to digital. Public sector organisations need to invest more in workforce development around digital upskilling. In the interim, they should work with a trusted partner to bridge the gap while developing skills inhouse.

Charities and the third sector

The 2020 Charity Digital Skills Report reported that only 50 percent of charities have a digital strategy. Only 9 percent have been through a digital transformation process and embedded it.

The 2021 report(8) found things have changed greatly over the last year.

Findings include:

• Eighty-three percent of charities changed their services in response to demand and 78 percent used digital to reach new audiences.

• Just over two thirds (67 percent) continue to deliver all work remotely, whilst 41 percent are collaborating or sharing learnings about digital with others.

• However, digital inclusion has proven a challenge for digital service delivery; 22 percent cancelled services because their users don’t have the skills or technology to use them.

Given these findings, it isn’t surprising that 92 percent say that they are planning to develop digital skills over the next year, with 62 percent saying they will be investing more in digital skills. Nearly two thirds are planning to continue with hybrid working arrangements. And half say that digital fundraising is a priority.

Manufacturing

Manufacturing has been a key focus for digitalisation with many concepts for virtual reality, augmented reality, digital twins and the Internet of Things been widely adopted across the sector, especially within larger plants.

However, the past year has turned the sector’s attention to supply chain resilience. Research by Cap Gemini(9) found that 80 percent of organisations in the sector were negatively impacted by the pandemic, with significant challenges across all aspects of their operations.

The IT company found that many manufacturing companies will be responding by building greater agility and flexibility into their supply chains and supply chain management through 2022. It highlights data analytics and security as other key areas for investment by manufacturing businesses in the short-term.

An IBM survey(10) of manufacturing businesses confirmed these priorities. It identified the top priorities for manufacturers as:

• Operational resilience (88 percent)

• Wellbeing and the working environment (83 percent)

• Supply chain integrity and resilience (75 percent)

• Supply chain visibility (71 percent)

• Improving operational efficiency (65 percent)

Which areas of digital transformation will you be focusing on in 2022?

If you’d like information about any of the solutions or topics mentioned in this blog, please reach out to the Grant McGregor team. We’re always happy to answer your questions and share advice about digitalisation, optimisation and associated security topics.

You can reach us on: 0808 164 4142.

Further reading:
Read our thoughts about the fast-tracking of digitalisation programmes through the pandemic.
Discover how organisations can optimise your digital transformation and cloud programmes to ensure fast and effective roll out and pain-free adoption.
Find out more about low-code and no-code tools in our blog about citizen development.
Or download our guide to developing an IT strategy that helps drive profits:

Sources:

1. https://marketing.global.fujitsu.com/rs/807-GYW-324/images/Final_Global_DX_Retail_20092021.pdf

2. https://emtemp.gcom.cloud/ngw/globalassets/en/information-technology/documents/trends/739178-top-trends-in-retail-digital-transformation-and-innovation-for-2021.pdf

3. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Legal/dttl-legal-thought-leadership-2018-legal-tech-study.pdf

4. https://www.linklaters.com/en/insights/publications/2018/april/digital-transformation-be-the-facilitator-of-change

5. https://www2.deloitte.com/us/en/pages/finance-transformation/articles/finance-digital-transformation-for-cfos.html

6. https://www.mckinsey.com/industries/public-and-social-sector/our-insights/digital-public-services-how-to-achieve-fast-transformation-at-scale

7. https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/public-sector/deloitte-uk-government-digital-transformation-findings.pdf

8. https://report.skillsplatform.org/charity-digital-report-2021/

9. https://www.capgemini.com/gb-en/2021/02/2021-predictions-manufacturing/

10. https://research.aimultiple.com/digital-transformation-manufacturing/