What’s on the way next year in digital transformation? Here at PTC, we do not have a crystal ball, but we do work with leading companies and partners all around the world. Drawing on our collaboration with those groups, our own proprietary research and reports from our peers, here are five digital transformation trends to keep an eye on in 2022:
Read on to learn more about each one in detail.
Executing a successful digital transformation initiative is no easy task. McKinsey’s mid-year digital transformation survey found the companies that make significant investments in technological capabilities, talent, leadership and resources reap the benefits. The top-performing decile of survey respondents were well ahead of their competitors in all four of those areas; one example is the top 20% are twice as likely as others to say they fill key technology roles with high-quality talent in a timely manner.
The results of McKinsey’s survey track with what we’ve heard from customers as well – 77% of digital transformation programs spend over $1 million and 30% spend over $5 million annually. These efforts involve collaboration between technology leaders, strategic leaders and functional leaders, along with many others. Successful digital transformation is challenging, but with the right vision, resources, personnel and implementation, the payoff is exponential.
Digital transformation is such a broad proposition with so many dimensions that plenty of companies struggle with step one: where to start? Some opt to simultaneously tackle multiple challenges, often to their detriment. On average, manufacturers start with eight digital pilot projects but 75% of those fail to scale, which can call into question the program’s longevity and funding.
While this mixed approach may make intuitive sense because DX initiatives take many different forms and take time to pay off, pilot purgatory is the unfortunately typical end result. With too much to consider, decision fatigue and analysis paralysis set in and the initiatives flounder. Companies that identify their most pressing problems, gauge the benefits of resolving them, invest confidently and execute effectively will be rewarded for it.
Accenture’s recent research report “The Future of Work: A hybrid work model” found that most workers (83%) prefer an approach where they can contribute onsite or off. That makes perfect sense, given many employees have grown accustomed to such flexibility over the past couple years. With the report also finding that 63% of high-growth companies have already adopted a “productivity anywhere” model, the onus is on employers to ensure that their workforce is equipped with the proper resources and support to be successful.
Digital-first and connected experiences that increase productivity and retain talent will serve as a significant competitive advantage for companies. Augmented reality is already being utilized in everything from training the U.S. Air Force to assisting with industrial machine maintenance to coaching up motorcycle salespeople. Companies have seen the savings from reduced travel expenditures in the past couple years, and if they can keep those without any adverse effects, why wouldn’t they?
As Gartner observes when looking ahead toward next year’s top tech trends, Generative AI is one to watch. Generative Artificial Intelligence “refers to machine learning methods that learn about content or objects from their data and then use that information to generate brand-new, original artifacts,” according to Gartner. This capability is already a part of existing digital transformation programs and will become more integrated as the technology matures; by 2025, Gartner expects generative AI to account for 10% of all data produced, up from less than 1% today.
As machine learning continues to make strides, one area where it already provides significant value is design. Using generative design, engineers can iterate on new ideas quickly and creatively, letting software guide them to novel solutions. Today, this technology shapes a variety of products, including cars on the road and suits in outer space. As time goes on, it will play an even more prominent role in how companies engineer and manufacture the next wave of products.
Uncertainty reared its head in an especially ugly way during the past couple years. In a Deloitte article on strategy and DX, more than three-quarters of executives surveyed said they expect more change over the next five years than there was in the previous five. More than half of that cohort believe the rapid pace of technology is “not good” for their organizations or customers.
Having the ability to adjust on the fly will be table stakes to compete. What’s also likely, as companies chart different paths to accomplish their goals, is for the combination of on-premise and cloud to turn into on-premise and clouds. SaaS is on the march because it provides greater mobility, better collaboration, faster innovation, simple scalability and a lower total cost, but with many companies getting what they need from on-prem software, that isn’t going away anytime soon. As Daniel Newman writes in Forbes, the evolution of hybrid cloud to multi-cloud will help businesses better meet their IT needs, favoring partners that can provide both types of services and integrate them seamlessly.
Technology is the lifeblood of digital transformation and both will keep pushing ahead in 2022. Keeping the above trends in mind will help companies pursue successful DX initiatives and position themselves for long-term success even as the ground shifts. If you’d like to read more, take a look through The State of Industrial Digital Transformation or Identifying the Value of Digital Transformation.
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