It took 182 years to build the Notre Dame Cathedral in Paris, 20 years to build the Great Pyramid of Giza and 10 years to build the Panama Canal. Executives from digital-leading companies, however, tell us that in just three years — by the year 2020 — 17 different digital technologies will dramatically impact the way they work, and transform the work that gets done.
That’s one finding from our recent study, conducted by Cognizant’s Center for the Future of Work, in partnership with the renowned economist Nouriel Roubini. To better understand the technology strategies that digital transformation requires, we surveyed 2,000 executives across 18 countries, in addition to futurists and MBA students at leading universities.
Highlights of the study include:
Digital technologies unlock revenue. Executives surveyed have already generated $328.7 billion in total revenue through the strategic deployment of digital technologies in the last year. Respondents believe there’s much more to be had, though — another $151.6 billion — if they took full advantage of the digital opportunities at hand.
The gap is wide between digital leaders and laggards. Digital leaders anticipate much higher business impact from digital technologies between now and 2020 than digital laggards do. (See the full study for how we identified leaders and laggards.) For example, fewer than 20% of laggards anticipate high business impact from big data/analytics, cybersecurity, cloud, mobile, social media, Internet of Things, collaboration technologies, digital currency and artificial intelligence vs. well over 50% of leaders.
Digital transformation will take place over three distinct, relatively short periods of time. It will be critical for businesses to understand these three eras, and correctly sequence technology implementation and budgeting.
The disruptive transformation era: The last five years.
The proliferation of digital over the last few years has ushered in unprecedented personal and business disruption. Respondents named eight technologies as having already impacted traditional business operations and IT infrastructures:
These digital technologies will serve as the foundation for the next two eras of digital transformation.
The hyper-digital transformation era: The present through 2020.
In today’s era, accelerated adoption of digital technologies will quickly leave laggards behind. The eight top technologies from the previous era will rapidly increase their business impact by an average of 74% among digital leaders by 2020.
This increase is a sign of the enormity of the forces at work, the size of investments needed, and the cadence at which organizations need to adapt to stay relevant and competitive.
In this age, nine additional technologies join the eight from the previous age. While they start with a relatively low level of importance today, they’ll increase by an average of 145% among digital leaders by the year 2020.
When combined, these 17 digital technologies increase their business impact among digital leaders by an average of 112% between 2016 and 2020. Clearly, business and IT organizations today will need to look very different by 2020 in order to keep up and compete successfully.
The ubiquitous transformation era: 2020 and beyond
In this era, companies will work to digest the incredible change of the two previous ages. However, even in this more pedestrian age, respondents expect an impressive 35% increase in the business impact of digital technologies.
In this era, six new technologies mature and join the previous 17, all of which will have a “large to very large” business impact:
Among digital leaders, these six technologies are expected to increase their business impact an average of 96% between 2020 and 2025. They highlight dramatic change across industries, such as transportation, banking, finance, commerce and manufacturing.
In today’s age of hyper-digital transformation, enterprises must digitally transform and implement systems with self-sustaining business agility. In addition to digital technologies, this will require a new way of thinking, including the following:
Recognize and respond to underlying market forces. Leaders will need to budget and plan to implement specific business strategies and digital technologies in specific sequences to maximize ROI and competitive advantage.
Recognize the impact of digital technologieson consumer and market expectations. These expectations are speeding the tempo of operations. To keep up, businesses will need to upgrade IT environments and augment human worker capabilities with AI and robotic process automation (bots) to enable mass volumes of transactions to be processed in milliseconds to support real-time and mobile environments.
Develop a digital doctrine and strategy to unify and guide all business and technology strategies, tactics and investments and provide a shared frame of reference across their organization.
Exploit “the Ax2 phenomenon.” According to futurists surveyed in our study, there will be five key outcomes of digital transformation between today and 2020: accelerated speed to market, strong competitive positioning, faster revenue growth, increased employee productivity and more customers. But organizations that achieve these value generators faster than competitors will realize an additional advantage, which we refer to as the Ax2 (or “advantages have advantages”) phenomenon. When enterprises gain new business insights earlier than their competitors, it leads to competitive advantages not yet available to digital laggards.
First and foremost, digital leaders will recognize the pace of change and align their strategies and budgets in ways that will provide them with competitive advantage now and in the future.