Top 5 Digital Transformation Trends in 2021

The concept isn’t new. Every forward-looking business has had discussions about implementing a transformation strategy at some level. But in many instances, the actual implementation is years away, viewed as an important step but not necessarily an immediate one. And then came COVID-19.

Overnight, many companies were forced to accelerate their plans. Employees were now hunkered down at home instead of in the office. Video calls replaced boardroom meetings. Communication and connectivity solutions that were years away from being implemented were suddenly at the top of the to-do list.

We are now months into the pandemic, and so much has changed. Now is an ideal time for companies to take a step back and review how they responded to massive change during the pandemic and if they are built to handle disruptions in the future.

Let’s take a look at some digital transformation trends so far in 2021.


Trend 1 – Increased IT Budgets and Infrastructure

The pandemic caused massive shutdowns and stay-at-home orders, forcing many to work, stream, shop and browse from their homes. This influx of usage placed tremendous pressure on IT systems and infrastructures. Many companies now view their IT budgets differently in light of COVID-19. In fact, the majority of businesses have increased their existing IT budgets during the pandemic.

According to a recent Telstra report, this shift in budgets will impact businesses in the short, medium and long term. Most immediately, companies will work to acquire more unified communications (UC) software licensing, ensuring that employees have more communication channels at their disposal. In the medium term, businesses will place additional emphasis on driving automation in service management. Finally, when taking a long-term view, businesses will work on balancing both digital and traditional channels. Changes to IT budgets and infrastructure will not happen overnight, and companies should constantly evaluate which channels work best.


Trend 2 – More Cloud Software and Services

COVID-19 restricted physical movement across the globe, highlighting the need for cloud-based software and services. These physical limitations have made it abundantly clear that to keep pace with the times, businesses need to offer virtualized solutions. The best way forward is to embrace a cloud-first mentality.

Through COVID-19, many businesses have made this realization. The aforementioned Telstra survey found that 93 percent of businesses are expediting their adoption of cloud services. By moving to the cloud, companies can accelerate their digital transformation. Using cloud and software services can help optimize operations, increase agility and boost revenues, even during a pandemic. Additionally, it will allow for more seamless tactical deployments. By moving from physical and onsite elements to the cloud, businesses can continue to operate during a shutdown.


Trend 3 – Revamped Business Models

An unsuccessful digital transformation effort can break a business. Unfortunately, the vast majority of digital transformation initiatives fail. This common fate is largely due to an inherently flawed model. Many companies either attempt to transform their traditional models into something entirely new, like General Electric’s “digital industrial” approach in 2011, or try to digitize the traditional model without truly innovating (“lift and shift.”) As COVID-19 has forced companies to rethink their approach, many are realizing that the best path forward is a dual business model approach.

A dual model business approach calls for structured management of both legacy and new business models, allowing a company to reallocate resources from streamlined, existing businesses to fund new opportunities.  As companies begin to transform their legacy businesses, they also need to keep an eye on the market to observe and act on any new market opportunities. This will require agility and focus. Adopting this digital transformation model can accelerate campaigns and give businesses a better chance of succeeding.


Trend 4 – Digital > Physical

Companies that primarily relied on physical solutions and had made little progress in their digital transformation were in for a rude awakening in March and beyond. As physical interaction was restricted or eliminated, COVID-19 showcased the importance of digital services offerings.

Take, for example, customer service. In instances where a physical presence was often a necessity, COVID-19 made servicing customers nearly impossible. Businesses that made headway in their digital transformation, however, could connect their representatives to consumers in unique ways, such as using the customer’s phone camera as a way to virtually troubleshoot an issue.

Offering digital services can also be a long-term investment. Once life returns to normal, businesses that have embraced a digital transformation can offer both digital and physical solutions, affording their customers abundant choice in how they interact. McKinsey has found that some services, such as contactless services, which were initially used as a stop-gap solution, will be adopted in the long-term.


Trend 5 – 5G Preparedness

No true digital transformation would be complete without 5G consideration. While long seen as an aspect of a comprehensive digital transformation, its importance has been emphasized during the pandemic. As data usage skyrocketed, so too did the need for enhanced capacity and bandwidth. This will likely result in accelerated 5G deployment.

IDC forecasts the number of 5G connections to grow to over one billion by 2023. Across industries, businesses should prepare to succeed in the 5G era. As companies continue to develop and implement their digital transformation strategies, 5G needs to be a central focus. The possibilities are endless: 5G monetization, the Internet of Things (IoT), network slicing and more. Companies that prepare for 5G now will be well positioned for success in the age of 5G.

There has long been a consensus that companies need to embrace a digital transformation strategy to survive and thrive. COVID-19 has put those plans on the fast track. There is uncertainty going forward, but by adopting the right digital transformation strategy, companies can be the driving force behind trends instead of being affected by them.