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What does digital transformation mean in 2023?

Digital transformation doesn’t have an end date.

Instead businesses must continually review how they’re working, always be looking for new ways to improve how they operate and seeking emerging technology that can make processes  more efficient, cut costs and enable teams to be more productive.

Technology moves quickly and there are always platforms, systems and products that show promise but fade away, and then there are those which truly do transform business operations.

So, with that in mind, what does digital transformation look like for businesses in 2023 and beyond?

How is Digital Transformation Being Used in 2023?

Leadership Embracing Evolving Technology and Innovation 

Digital transformation may be the process of replacing legacy systems with new technologies, but the transformation itself is about more than just bringing in new tools.

If the mindset of a business undertaking a digital transformation isn’t in the right place, the transformation won’t be as effective as it could be.

Business leaders need to embrace a digital-first mindset in 2023. This doesn’t just mean being open to replacing old technology with new technology, but allowing the new technology to present new ways of working on a larger scale.

This isn’t only true for those in charge, it’s also essential for workers throughout all departments of the business to embrace change and work alongside new technology, rather than resenting it.

70% of digital transformations fail, with employee resistance as one of the top contributing factors, according to McKinsey.

So, business leaders and department heads need to work with their staff and encourage them to embrace new technology and not feel threatened by it, which often happens.

One way companies can do this is through in-depth training courses for staff, so they’re properly able to use the technology to assist in day-to-day tasks.

VOIP for Communication

The UK’s existing communication system is close to undergoing its biggest transformation since the existing ISDN/PSTN lines were installed in the 1980s.

Those existing lines (which connect everything from phones to security cameras to lifts) are set to be switched off in 2025 because they no longer have the capacity to manage the huge amounts of data needed for modern communication.

In place of the old copper wires, the UK’s phone network will be replaced by an internet-based network (Voice Over Internet Protocol – VOIP).

VOIP facilitates UCaaS (unified communications as a service) solutions, that places all of a business’s communication channels – voice, text, message, video and file transferring – within one platform.

Automation Replacing Outdated Systems

For a long time, businesses relied on hand-written notes to save important data and to refer back to it later.

Then, the arrival of the computer allowed data to be entered into a digital database physically – something a lot of businesses are still doing today.

Businesses that are still relying on human workers to input data into their systems are losing time and effort, because most data input jobs can now be performed accurately by automated systems.

31% of businesses today have fully automated at least one function, according to McKinsey.

Automation programs can gather and input data into multiple databases automatically, without the need for human input and at a fraction of the time it would take a human worker.

This can help businesses keep track of essential data much faster, allowing them to make important decisions at an improved timescale.

It also eliminates the possibility of human error, which can cause issues further down the line if they’re not spotted and resolved quickly.

Data analytics and artificial intelligence offer deep insights

While it was once reserved for science-fiction stories, artificial intelligence (AI) has become a key tool for many businesses in 2023, that onboard the technology through digital transformations.

77% of businesses today are using or exploring AI, according to IBM. The tool can be used by businesses in multiple ways to save time and costs.

For example, data analytics can be implemented by businesses to better understand the habits of customers, so they can focus their efforts on presenting customers with products and services that will be relevant to them to boost sales.

By incorporating artificial intelligence into the process, businesses can go even deeper into the information data analytics provides.

AI can help businesses not only choose which products and services to present to customers, but also analyse previous customer activity to predict their habits in the future.

Using the knowledge gained by AI, businesses can spend more money on preparing the products and services they can see will be popular in the weeks and months ahead, rather than wasting money on those which are not as appealing to their customer base..

Easier remote working

Remote working has been on the rise in recent years.

Between September 2022 and January 2023, 28% of the UK workforce was adopting a hybrid style of working, while 16% was still working solely from home, according to the Office for National Statistics.

But employees who work for companies that store their data and programs on on-site hard drives will struggle to access the data they need to do their jobs.

This is why cloud computer systems work so well.

Rather than relying on local hard drives and office-based data centres, cloud systems allow workers to access essential business data from anywhere, anytime.

As long as they have an internet connection and a suitable digital device (laptop, mobile phone, tablet) workers can have everything they need to perform their roles from outside of the office.

This also relieves companies of needing to store all their data on bulky, oversized servers at their premises, which can take up space and be expensive to maintain.

With cloud systems, all your data is hosted off-site by an external provider, so you don’t need to worry about paying for expensive repairs if there’s ever a fault. 

Plus, most cloud system faults can be identified and resolved within minutes, not days, and without the need for an engineer to visit.

Maintaining a high level of security

Almost 40% of UK businesses suffered a cyberattack in 2022, according to GOV.UK, with cybercrime set to cost the global economy over $10 trillion per year by 2025, according to technology insurance company Embroker.

Digital organisations need to follow proper security protocols, including adhering to GDPR if they want to keep their customers’ data and their own data safe in 2023.

As technology evolves, security providers need to keep up with developments to stay ahead of cyber criminals who want to leverage outdated technology to steal sensitive information.

Businesses that are still using outdated security and anti-virus software are leaving themselves open to attacks.

Whereas businesses that use up-to-date software are giving themselves an excellent defence.

Modern cybersecurity software makes use of artificial intelligence and machine learning that analyses network traffic, identifying and eliminating potential threats before they even have a chance to make a move.

What will digital transformation mean in the future?

As technology continues to evolve, so will digital transformation.

The rapid expansion of artificial intelligence will help businesses make the most of automation, customer analysis and preemptive planning. But it may also give rise to new technologies and ways of working we’re not yet able to grasp.

But the key takeaway is that businesses that embrace new technologies and ways of working will prosper, while the ones who continue as they are will fall behind.

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