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Although digital transformation is a promising step into the future, it is the number one concern for a business. Research shows that 70% of all digital transformations fail to reach their goals. Moreover, $900 billion out of $1.3 trillion spent on these initiatives in 2019 did not pay off. At the same time, the growth of the IoT market is obvious and, in fact, skyrocketing. The EY 2019 report “Future of IoT” forecasts that the revenue of the global IoT market will be worth $1.1 trillion by 2025. Here is a discussion of what digital transformation entails, how it passes, and how it can be successfully implemented.

Smart Things & The Internet Of Things: What Is A Link?

Smart Things and the Internet of Things (IoT) are two quite similar, from the first glance, notions. Both provide technological support for the digital transformation. However, there is a substantial difference in their essence.

Humanity used Smart Things before IoT has been represented to the world. These are smartphones, which can handle various tasks being much more than a calling organizer; smart coffee machines, which can wake up one in the morning and make a cup of just-brewed coffee; smart thermoregulation system which can maintain a temperature level in the room regarding the preferences and depending on day-of-time rating periods; etc. in other words, Smart Things are everything that performs more than their original functions. They operate autonomously, without a need to be connected to a network.

At the same time, IoT is a comprehensive network that connects numerous intelligent objects (Smart Things). Within this network, smart objects can share information, data, and resources. This type of “intelligent” connection between the Smart Things grants them a capacity to react to the changes in the environment they operate in to provide the highest value to the users. The most spectacular example of IoT is a smart home where everything can be controlled via a smartphone or tablet, from home directly or remotely. According to the IoT Analytics’ latest “State of the IoT & Short-Term Outlook”, as of 2019, the number of IoT devices is 8.3 billion units; and by 2020 and 2025, this number is predicted to grow to 9.9 and 21.5 billion, respectively. As such, IoT has become an integral part of digital transformation.

By the end of 2019, 93% of enterprises are expected to use IoT in some way or another, of them:

  • 92% of industrial organizations;
  • 87% of healthcare organizations;
  • 79% of retail organizations;
  • 68% of the government sector

Process Of Digital Transformation

A process of digital transformation entails a bulk of technologies and practices to provide a shift from a traditional business model to a digital one. They can be grouped up into seven dimensions that determine digital transformation: strategy, people, organization, customers, ecosystem, technology, and innovation.


It is critical for any business to develop a comprehensive digital strategy, but not a strategy which includes digitalization as a separate vector. The point is that an enterprise needs to transform all the business processes and operations via digital strategy, as well as align them with the general corporate strategic vision. Sometimes, it is hard to predict all required changes; so, the subsequent transformation solutions will help to close the gaps.

Li & Fung focused their digital transformation strategy on three goals: reduction of production lead times, an increase of speed-to-market, and improved use of data. The realization of the second goal included implementing virtual design technology, installing real-time data tracking management systems, and building-up an integrating digital platform to connect clients and vendors. All these resulted in elevating working capital efficiency by $200 million.

The employees are a key part of a digital transformation. Creating a digital culture is not easy at all. On the one side, it implies acquiring employees with digital skills, as well as encouraging the culture of knowledge-sharing.

However, the current employees can express a fear of being replaced. As a result, there is a conscious or unconscious resistance to the digital transformation. That’s why recognizing these fears and translating them into opportunities and new experiences which can help employees to upgrade their expertise are critical for successful digital transformation.


For changes to be incorporated successfully, all business units need to be connected. A digital transformation unit is not an exception. Indeed, it is of utmost importance that a digital transformation unit cooperates with and includes staff from other departments for efficient facilitation. Additionally, organizational measures should be upgraded to include digitally related KPIs.

Regardless, a business work by B2C or B2B pattern, digital transformation is consumer-driven. It means that digital transformation should result in increased customer satisfaction, better user experience, as well as provide additional value. The digital solution needs to be designed in accordance with the end-to-end consumer journey. Finally, employees who closely interact with the clients and know what they need should always be included in the digital transformation units. The Department of Planning and Development of Santa Clara County in California heavily adapted their working instruments and processes to the customer-facing staff members’ recommendations, cutting permit-approval time by 33%.


This dimension is linked with the previous one as it entails a greater inclusion of the customers in the company processes. Digital transformation from this perspective is creating an ecosystem where consumers are treated as partners and can directly take part in developing digital products. Still, 71% of executives view understanding the impact digital technology will have on their customer’s behavior and preferences as their top challenge.

A choice of technology used is vital for a business, as there is no unique set of one-size-fits-all technologies. An enterprise should choose technologies (cloud, Big Data, IoT, etc.) depending on the digitization areas they are focused on. The existing internal IT systems transformation should be ongoing to match digital transformation. By the end of 2019, spending on digital transformation technologies will comprise 40% of all technological expenditures, IDC reports.

Innovation management is what drives digital transformation. It means that the innovations should come not only from the top-level staff but from the lower levels as well. For example, the annual “innovation competition” is a great solution to train employees to think out of the box, generating new ideas that help identify the gaps in the business which lack innovations.

Tips For Digital Transformation

  • Tips For Digital TransformationIt does not matter whether an existing business model is transformed or a new one is developed from scratch, there should always be used the best practices and approaches available.
  • Setting an enterprise-wide scope. A digital transformation is much more likely to be successful if it is executed on an enterprise-wide scale, not a department-wide scale.
  • Adaptive nature of designed strategy. The rigid KPIs, as well as predetermined investment requirements, do not provide benefits anymore. A digital transformation strategy needs to be flexible. For example, monthly, fortnightly, and weekly reporting is more efficient in terms of fast reaction on the internal and external changes.
  • Adaptive nature of designed strategy. The rigid KPIs, as well as predetermined investment requirements, do not provide benefits anymore. A digital transformation strategy needs to be flexible. For example, monthly, fortnightly, and weekly reporting is more efficient in terms of fast reaction on the internal and external changes.
  • Preemptive focus on changes. A digital transformation should be forward-looking rather than competition-responsive. Such changes need to be one or two steps ahead to create trends, not follow them.
  • Final Words

    For the businesses managed to implement IoT as a part of their digital transformation, the benefits are obvious: improved data and assets utilization, increased productivity, greater efficiencies in supply chain management, business processes & logistics, better customer experience & satisfaction, and more efficient innovations. Still, for the vast majority of Chief Information Officers (CIOs), security and costs are two main hurdles restricting digital transformation. That’s why most of the CIOs just optimize their current strategies with digital elements but not develop new comprehensive ones. In any case, the IoT sector continues to grow, and the digital transformation of the enterprises is just a matter of time.

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