What Do Business Digitization Strategies Look Like Today?
Business digitization remains a key and essential aspect of modernization within companies today.
As organizations more frequently compete on the basis of their ability to leverage data and technology, it becomes more incumbent on companies of all sizes—especially SMBs—to embrace new solutions in order to keep up with the pace of change.
In this blog post, we’ll be taking a look at what strategies businesses are pursuing for business digitization.
What are the most sought-after technologies? What are the key digital transformation objectives for companies? What are their concerns?
These are the questions we will be answering today. Let’s jump in.
A Quick Word
As a managed service provider, it probably will not come as much of a surprise to you that we recommend digital transformation as the best way for a business to modernize and improve their processes.
Unfortunately for us, we don’t get clients for our digital transformation services by telling them to take our word for it—and that’s why in this post we will be diving into figures, reports, and the gritty detail to get to the core of the issue and understand what is driving decision making when it comes to business digitization today.
Why Do Businesses Need to Digitize?
What are the primary factors that are driving business digitization?
Broadly speaking, there are three key drivers that are behind increased investment in business digitization.
These can typically be defined across the following areas:
Cybersecurity is a big concern for companies today.
While previously an issue that has dogged larger enterprises—which often already have established programs for security—cyberattacks have been increasingly targeting SMBs.
As organizations look to move most of their operations to the cloud, a consequence of this is that malicious actors now have many more attack vectors into businesses they may never have previously targeted.
This is compounded by remote working conditions, which were pervasive during the pandemic and have persisted and will persist long after.
With remote work circumstances, employees are almost certainly operating within home networks which do not have the same standards of protection when compared to business networks.
1 in 2 people won’t return to jobs that don’t offer remote work after COVID-19.
Finally, no companies are less prepared to meet modern cybersecurity standards than SMBs.
For the most part, SMBs invest less in their security than their larger counterparts, they’re less likely to have an existing plan in place, and less likely to have a dedicated security team; relying instead of IT staff or no one at all.
Businesses spend $170,000 on average to fully resolve data breaches after being hit.
A combination of these factors means that cloud security is a major consideration for business when investing in business digitization programs, as demonstrated by country-wide spend on security, which we will get into soon.
The second big driver of business digitization strategies is the adoption of cloud services.
For most of the 2010s, there was a certain reluctance by businesses across the country to embrace cloud technology adoption fully.
While in 2011 51% of organizations had at least one portion of their computing infrastructure based in the cloud, that figure had by 2020 risen to 81% and is expected to increase further through the 2020s.
Towards the end of the decade, however, we saw a shift in how businesses approached cloud tech.
This is evident in the software-as-a-service market, which grew to become the largest public cloud market segment.
The improved availability and affordability of previously out-of-reach technologies—not least those pertaining to advanced analytics, AI, and automation—has opened up a wealth of opportunities for small and midsized businesses to take advantage of.
As a result, companies have scrambled to invest in cloud services, seeking to stay abreast of their competitors who are already gaining key market advantages through the use of cloud services in their operations.
Previous concerns about cloud services, particularly pertaining to security and compliance, are quickly subsiding as the data centers operated by service providers become more secure—today typically rivaling or surpassing most on-premise servers.
Security concerns (44%), compliance and regulations (42%), and lack of application support (41%) are the most reported barriers to full cloud adoption.
Related Post: Data Center Tiers: What Are They and Why Do They Matter?
The need for businesses to improve their operational efficiency is nothing new, and business digitization strategies implementing modern solutions are today serving this same purpose.
Business processes, particularly regarding common workflows within operations such as data entry, are easily automatable through new technology.
For early technology adopters, the benefits from implementing practices like digital document workflow have necessitated their competitors to do the same.
These organizations that have successfully streamlined many of their processes are able to re-invest previously wasted resources on other aspects of their operations.
When you also consider the amount of data that now flows in and out of businesses, in many cases there is simply too much to deal with effectively.
Employees spend an average of 1.8 hours every single day searching and gathering data—that’s 9 hours per week that could have otherwise been spent doing something more valuable.
Furthermore, as we noted above, there is increased appetite in businesses to utilize cloud services.
For the most part, this is about the best way to leverage the large volume of data sets that exist within organizations.
For the majority of companies, this means the adoption of cloud tech that facilitates the handling and use of data and information in a way that improves their operations.
Top Initiatives for Business Digitization
Now we know what the key drivers for business digitization are, we’re going to take a look at the solutions within these drivers that organizations are pursuing in their initiatives in order to improve their security, operations, and cloud adoption.
1. Data and Business Analytics
Software applications that support the use of data and analytics is the area in which IT departments are spending the most, according to a 2021 study by CIO.
Many companies that have invested in business intelligence (BI) have done so to improve their ability to use data effectively.
The business intelligence market in 2020 was valued at $21 billion. In 2026, this figure is expected to grow to $41 billion at a CAGR of 12%.
While larger enterprises have been implementing BI for several years, it’s only recently become a key objective for smaller businesses, with many reluctant to do so.
Common BI platforms include Oracle BI, SAP BusinessObjects, and Microsoft PowerBI.
2. Security and Risk Management
Just behind data and business analytics is heavy investment from businesses in security and risk management, with 37% of IT leaders upping their budget for it.
This comprises cybersecurity solutions that are able to protect a modern work environment and maintain compliance standards—this is particularly important for organizations operating in certain industries like healthcare or finance.
The kinds of technologies adopted by companies will be solutions like perimeter security, endpoint protection, information security (infosec), authentication, backup and disaster recovery (BDR), and network monitoring.
Related Post: What Should You Expect In Your Cybersecurity Tech Stack?
3. Cloud-based Enterprise Applications
From an operational standpoint, cloud-based applications are becoming more significant in terms of the role they play in business operations.
So, when organizations look to improve their operations, they will largely be implementing cloud-based enterprise applications.
These are typically in the form of enterprise resource planning systems (ERP), which allow businesses to centralize their data and streamline their operations through the use of automation.
Legacy applications can often be integrated into cloud ERPs, meaning they can provide a lot of flexibility for SMBs that still rely heavily on older technology.
Having said that, many organizations are choosing to replace their legacy software entirely in favor of cloud-based solutions, and it’s certain that cloud applications will be dominant in the near future.
Businesses are increasingly replacing older systems, with 32% of respondents in a 2021 survey indicating their recent technology initiatives involved replacing legacy solutions.
4. Customer Experience Technology
The last major area where businesses are fast increasing their investment is in customer experience tech.
For the majority of organizations, this will in some form regard investment in custom mobile applications for their client base.
It can also include the implementation of website integrations like chatbots to improve customer service.
Businesses are turning to apps to bolster their digital presence and to meet the challenges of scalability and functionality. Today, 67% of small- and medium-sized businesses (SMBs) have an app.
The reasons for businesses turning towards apps is simply that customers are more comfortable than ever using their phones to do business online; and additionally, the viability of SMBs creating apps is far more evident today with the introduction of new technologies like low- and no-code platforms.
Related Infographic: Low-Code vs. Traditional App Development
Business digitization is here to stay, and organizations find themselves in a position of prioritizing what they need implemented in order to meet their goals for digital transformation.
While companies vary enormously from industry to industry, there are several commonalities regarding technology adoption that are consistent across all businesses.
These are the drivers of adoption—namely cloud security, cloud service adoption, and the improvement of business operations.
To address these areas of business digitization, we’ve witnessed a drastic increase in investment in particular technologies like business intelligence (BI) platforms, enterprise resource planning (ERP) systems, and information security solutions.
These aspects of business digitization will continue to be crucial in ensuring the success of digital transformation initiatives.
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