The rapid evolution of technology is transforming the way businesses operate, they way they interact with their customers and partners, and changing their competitive landscape. IDC forecasts that within five years, the European economy will reach "digital supremacy," with more than half of GDP driven by products and services from digitally transformed enterprises.
IDC's research has confirmed that crucial to this success is for organizations to establish a digital platform linking themselves, their customer and their suppliers. Such a platform allows end-to-end, intelligent processes in their business operations, exploiting the power of analytics, AI and machine learning for more efficient and more effective operation”
As a consequence, spending on IT for digital transformation – data and analytics technology and services prominent among it – is growing at a CAGR of 17% (versus 2% for the rest of IT) and so by 2024, over half of all IT spending will be directly for digital transformation and innovation, up from around 30% today.
So we can see that digital transformation is crucially important for organizations of every industry around Europe; but IDC's research reveals that many are still searching for the best way to approach their transformation. This research has shown that those companies most effective in digital transformation are those that establish a platform for their digital business, connecting core systems to their customers and their partners and putting intelligence at the core of that platform, exploiting analytics, big data and AI techniques like machine learning and chatbots.
Exploiting advanced analytics and AI as an integral part of the IT operational systems can drive improvements in customer engagement and efficient operation, and help to create new and agile processes for processes as diverse as customer support, stock replenishment, and asset maintenance. Consequently, the appeal of taking a holistic, platform-oriented approach to exploiting big data and analytics is appealing to organizations in many industries in the public and private sectors alike, particularly retail, finance, telecoms, utilities and manufacturing. Although customer-related objectives are often the primary benefit driver for analytics platform initiatives, many companies also successfully seek benefits in operational areas such as process improvement and cost of procurement, and most significantly, in enabling new business models based on data.
Modern technologies have changed many facets of analytics usage, in particular through making data available to all levels of the organization thus allowing data-driven, informed decision making. That said, there are many technology choices to be made, and cultural and organizational issues to be addressed to fulfil the potential of big data analytics in any business. Many organizations do not have the necessary skills and experience in house and so face additional challenges. Leveraging the experience of others – industry peers, advisors and consultants – can be critical to success in big data analytics. For many companies, external references, guidance and support have proven essential in successfully overcoming these challenges and in reconciling viewpoints.
For example, there are issues arising from whether the tools and techniques that would be preferred by business units are those that are equally acceptable to central IT. The rising deployment of user-friendly, easily deployed visualization and analysis tools can lead to a rapid rise in 'shadow IT' giving management and cost control problems. And, users need a solid data platform, adequately and properly populated, to ensure they get the data they need to do their job – and that it is correct as well as complete. Simple deployment of easy to use tools does not guarantee that the users will be able to effectively use the, and technical training in the tools is not the full solution. Organizations are increasingly recognizing that "data literacy" is an issue – ensuring users understand the data they are working with, its limitations, and its provenance as well as the need to ensure compliance with GDPR and other regulations at all levels of the business.
So it's crucial that technology strategy must be aligned to company strategy – IT must be in sync with the business. Investments can be wasted if not positioned correctly. But if approached correctly, analytics and big data hold the key to successful and widespread digital transformation of any business.
To understand how Ricoh can help your organization to drive business transformation through analytics and big data, please visit download the IDC Whitepaper or contact Ricoh to discuss your vision for your intelligent business.
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