Digital transformation is nothing new. Depending on your definition, it can go back as far as the middle of the twentieth century. Even by the most conservative interpretations, leading enterprises have been on the digitalization path for a couple of decades.
Over the last two years, however, digital transformation has taken on a new urgency. As organizations have weathered the upheavals instigated by the pandemic, digitization has become integral to their responses and also their future plans. Looking ahead to the next year, it’s clear that digital technologies will continue to play a seminal role in enterprise strategy and success.
However, certain aspects of digital transformation are likely to increase in importance while others will diminish. Following are some of the trends IT leaders can expect to become more prevalent in 2022 – and others that are more likely to fade.
Future: A focus on resiliency and sustainability
E.G. Nadhan, chief architect, Red Hat, notes: "Digital transformation – as a buzzword and paradigm – has been around for a few years now. However, there have been continuous shifts in the focus and purpose of the digital transformation initiatives within each enterprise.
"Even companies who have embarked on multi-year transformational journeys have had to make adjustments midstream, as they should. The operative word that defines the purpose for digital transformation in 2022 is resilience. The pandemic taught enterprises to be prepared for seismic shifts in the market dynamics and consumer needs. Forward-thinking enterprises will focus on the ability to effectively pivot and deal with change with minimal to no impact to internal and external consumers.
[ Learn the non-negotiable skills, technologies, and processes CIOs are leaning on to build resilience and agility in this HBR Analytic Services report: Pillars of resilient digital transformation: How CIOs are driving organizational agility. ]
“There will be increased focus on experimentation with configurable parameters to predict enterprise behavior using simulated environments. And such experimentation will yield more insight into the optimal configurations that are most resilient.”
As sustainability becomes more core to enterprise strategy, integrating this into digital transformation efforts will become key.
“This is not just about moving to cloud to reduce datacenter carbon footprint, but a holistic transformation of business through digital technologies that create better impact for society and build a purpose-led organization,” says Yugal Joshi, partner at IT consultancy and research firm Everest Group. “This will influence how enterprises build their core offerings they sell to customers, transforming their supply chain, holding their suppliers accountable, and building ecosystem platforms to drive innovation and transform internally to align with this much-needed agenda.”
Data will play a huge role. “One of the biggest data technology trends to watch in the upcoming year is harnessing enterprise data and assessing stakeholder expectations to understand where the business is at risk from climate change and where the business needs to act to become more sustainable,” says Sanjay Srivastava, chief digital officer for Genpact.
Fading: A narrow view of cloud benefits
The low-hanging fruit of cloud benefits has long been picked over, and it’s clear that the true value of cloud is as an innovation enabler.
“All CIOs will prioritize cloud over the coming year because they realize the cloud is about innovation more than cost savings,” says Srivastava. “Enterprises should start with their desired business outcome. Then CIOs should focus on how to restructure, reimagine, and reengineer their overall portfolio to deliver sustainable competitive advantage. The cloud becomes the enabler, the delivery engine that makes that happen.”
Future: AI-fueled enterprise automation
“Using artificial intelligence (AI) to bring increased automation to processes [will continue] to gain speed, as the technology matures and companies face increased pressure to drive down costs through process automation,” says Martha Heller, CEO of Heller Search Associates.
To date, some parts of the organization have been more eager adopters of workflow automation than others. Look for that to extend enterprise-wide. “For example, customer-facing teams such as sales and marketing have typically leveraged AI to connect disparate data and create intelligent workflows that empower team members to work smarter and more productively,” says Christine Spang, co-founder and CTO of Nylas.
“Heading into 2022 and beyond, we will see workflow automation extend across the entire company. This means HR and people teams can be faster and more efficient in scheduling interviews and updating candidate profiles, finance can automatically update payment records, and customer success teams can be better equipped to respond quickly and efficiently to customer needs.”
Fading: Remote work as a special case
“The remote effect is gone,” says Jim Chilton, CIO at Cengage Group. Distributed work is no longer the exception; it’s the rule. “We now know we can work from anywhere,” Chilton says. “From a CIO or CTO perspective, [it’s] something that is here to stay as a permanent part of our future.”
Effectively equipping and enabling remote and hybrid work remained a critical digital transformation priority through much of 2021. “Though these will still be important in 2022 as well, these have been invested towards enough in the last two years,” says Everest Group’s Joshi. “Therefore, enterprises will reap the benefit of their investments in these rather than accelerating their focus.”
Future: Managing the full data lifecycle
Organizations and businesses are becoming all about the data. “Moving ahead, we need new thinking about how to manage data from cradle to grave,” says Melanie Kalmar, corporate vice president, CIO and chief digital officer at Dow. “The tech organization plays a key role in architecting and harnessing the data for the enterprise to drive more sustainability-focused decisions and sustainability reporting.”
Fading: Cybersecurity as an afterthought
Between the increased complexity of cloud and distributed architecture and the rise of ransomware, cybersecurity concerns have risen to the forefront of digital transformation. Enterprises are under pressure to deliver secure access across users, applications, and devices – everywhere.
"Security continues to be a growing need, " Kalmar says, “something no longer taken for granted, but a business imperative. Transactions and intellectual property have to be part of all new design requirements.”
As McKinsey points out in its discussion of six make-or-break priorities for CIOs, DevSecOps models, whereby security is becoming an integral part of each stage of the IT lifecycle, are increasingly being adopted as are more automated “security as code” approaches.
[ Learn more: What is DevSecOps? ]
Future: Building responsible AI
Sitting atop the technology agenda, AI holds great power but demands great responsibility. CIOs need to create transparency and guidelines around the application of AI in the enterprise, says Srivastava of Genpact. “Planning to build industrialized AI systems as opposed to proof of concepts needs to happen early on. Similarly, building ethics into the governance from the start is critical,” Srivastava says.
“The key to getting AI ethics right is bringing in oversight that is independent of the AI project because it can reduce unintended bias, constrain it to the proper use case, and design for inclusion and comprehensiveness. In the end, most companies, like a financial audit, will bring AI ethics as a board agenda item.”
Future: Machine learning maturation
Remember when AI was essentially a pipe dream? No more. “There are places now where the technology can, and is, being used. It’s becoming more real,” says Chilton, noting that machine learning capabilities are integrated into major enterprise software platforms. “The focus is now on providing viable predictive analytics and simulations. This is starting to be a technology that can create efficiencies by decreasing legwork and give you very similar (if not better) predictions than you have without it. CIOs will be asked by CEOs and others what they’re doing about it.”
[Get answers to key digital transformation questions and lessons from top CIOs: Download our digital transformation cheat sheet.]
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