The document discusses the ongoing trends and predictions surrounding digital transformation as of January 2020, highlighting how businesses are increasingly focusing on technology to enhance customer experience, operational efficiency, and business model innovation. Despite significant interest, only a small percentage of companies have effectively executed their digital transformation efforts. The importance of providing superior customer experiences, optimizing internal processes, and adapting business models to keep pace with technological advancements is emphasized.

1. Digital Transformation
Trends and Predictions in 2020
January 2020

2. 1
Introduction
Digital transformation is now a recurrent
theme in boardroom meetings, business
conferences, and even business lectures.
Sometimes you can catch it in late-night bars
where drunken investors go on and on about
their portfolios. And there’s nothing unusual
about that. Though first introduced in the late
19th, the buzz around Digital Transformation is
still there, ever-mounting. It completely
changed the world and the way we operate in
it. Businesses across industries aim for digital
transformation to engage their customers,
empower their workforce, and crush their
competitors. For all the hype, most companies
still ‘talk the walk’ without knowing where to
start: Only 7% of companies in a recent IDG’s
study have done implementing their digital
transformation.
Reading this paper will give you a better idea of
how technology has so far transformed the
business landscape, what you need to do with
your own digital transformation, and what to
look for in 2020.
Digital Transformation Introduction

3. 2
If we could sum up the last few decades in one
word, that word would be ‘transforming’.
Looking back, it is clear how technology
transformed all industries: it allowed new
players to enter the game and challenge the old
ones. But what’s behind all this? How do these
smaller, younger companies have the gut to
compete with the established, better-resourced
ones? Or better still, how do they succeed in
doing that? The answer, it turned out, lies in the
exponential increase in processing power,
communication bandwidth, and storage
capacity - which together shape the digital age
as we see today. Since it became easier and
cheaper to process, communicate, and store
information in digital form, these late entrants
can enjoy the advantage of low-cost systems
without having to make huge investments
upfront, only to see these investments losing
values overtime.
Let’s look at the telco industry and how
technology disrupted it. Back in the 20th
century, telephone companies offered
end-to-end services, meaning they provided
clients with everything it took to make a phone
call - from manufacturing the wares to wiring
the cables. However, as technology evolved and
so did demand, innovators created and applied
new business models, at one time smoothing
the way for new entrants. These newcomers
typically targeted niche markets, which were
high-yield but neglected by the giants. For
example, Skype and Whatsapp are eating into
the voice industry’s revenue. People use Skype
because its calling services are free (internet
connection required) and are more pertinent in
this day and age where internet access is a basic
human right.
How technology
has changed the business
Digital Transformation How technology has changed the business

4. 3
Seeing how fast digital technology transformed
the world and, yet, how fast the world is
embracing digital transformation, it may get
confused at times. More than half of all digital
transformation efforts came to naught in 2018,
according to Forrester. A simple search “digital
transformation framework” returns more than
164 million results (as of the publishing date). Is
there a proven, one-size-fits-all to adopt?
The next sections will help navigate this maze:
the focus areas and trends of digital
transformation.
Digital Transformation How technology has changed the business

5. 4
“Digital transformation is the
process of realigning or
investing in technology,
business models, and processes
to drive new value and
experiences for businesses,
customers, and employees.”
Customer Experience
Operational Efficiency
Business Model Transformation
To build your digital muscle, there are three
areas that, we believe, are the foundations:
customer experience, operational processes,
and business models.
Let’s look at each in turn.
The focus areas
of a digital transformation journey
Digital Transformation The focus areas of a digital transformation journey

6. 5
or no subscription fees, and without having to
buy the songs. In fact, streaming services are
spelling doom for the traditional CD format: in
the US alone, CD sales have plummeted 80
percent in the past decade, from 450 million to
89 million.
Technologies are changing the game of
customer interactions, opening up new
opportunities and challenges that no one
imagined would be possible a few years back.
Take digital experience, which Deloitte predicted
as one of the key forces shaping the future
technology, along with Analytics and Cloud, in
its recent study. Unlike when the term is first
coined and used, digital experience now goes
beyond the selling and advertising side of the
business on the internet. Today, digital
experience describes how we use digital
technology to improve every interaction that
customers make with brands. Researching the
product online, using maps to find the store's
nearest location, call tech support for
information about a cellphone, these are all
digital customer experiences.
Companies are obsessing over customer
experience. In Kelton's 2020 Global Marketing
Strategy Report surveying 750 marketing
leaders, more than one-third set 'improving
customer experience' as their top marketing goal
for this year. This is because customers now
have more power than ever. They never run out
of brands to choose from (your competitors) and
they could wreck your brands overnight by
spreading bad reviews (on social media). Today,
those who provide superior customer
experience will win the market.
Nowhere else is there a better example than
Uber. This ride-hailing company is threatening
the very survival of traditional taxi businesses.
Uber is more favored because it offers better
and cheaper (except for when surge pricing is
applied) services - a perfect recipe for winning
customers. And then comes the music industry.
Everybody loves music, yet most don’t have
time to sit back on couches, sip wines, and enjoy
it anymore. That’s why streaming services, such
as Spotify and Apple Music, are dominating the
music distribution industry. They let customers
listen to their beloved artists or genres, with low
Customer Experience
Digital Transformation Customer Experience

7. Good customer experience starts with tracking
and studying your customer’s buyer journey. In
other words, you want to ensure that customers
are satisfied every time they interact with your
brands, from the point they are aware of the
products all the way to the point they make a
purchase. How do they behave? What are their
pain points? How can you ease these pain points?
How can you make their buyer’s journey smooth
and effortless? When you provide inconsistent -
or downright bad - experience, customers leave.
Period. Even when people love a company or
product, three in five will switch brands after
several bad experiences, and two will switch
after just one bad experience. What’s more?
When customers have a bad experience they
will go share it with others. On average, a
customer tells nine other people about a good
experience, but they will tell six-teen others
about a bad experience.
When it comes to customer experience, set as
high a bar as you can . Do not look at your rival’s
service quality. Customers do not compare your
service with your direct competitors. Instead,
they compare yours to that of industry leaders
such as Amazon, Apple, or Grab. Customer
expectation is peaking without a sign of going
down. So stay prepared.
6
Great digital experience means
more sales and loyalty:
Companies that earn $1 billion a
year earn an additional $700
million over three years by
investing in customer experience.
Digital Transformation Customer Experience

8. Operational
Efficiency
Although improving customer experience
should be your top priority, do not shrug off your
internal processes. FYI: most executives in a
survey by PTC believed that the top benefits of
digital transformation is better operational
efficiency. This means optimizing and
automating processes to meet business goals
through technologies such as Enterprise
Resource Planning (ERP), Capacity
Requirements Planning (CRP), Data Warehouse
(DW), and Business Intelligence (BI). Automated
processes cut down manual works, save you
time, and help your people focus more on the
‘thinking’ and creative tasks. One insurance firm
built a central digital platform to facilitate claims
processes. Seeing positive results, they applied
these same processes into multiple branches in
different regions. HR management systems also
are in widespread use, letting HR people focus
7
Digital Transformation Operational Efficiency

9. more on strategic initiatives such as learning and
development, and less on dull paperwork such
as counting employee day-offs. The bottom line:
companies using technologies to enhance their
operations will compete better through
improved productivity, efficiency, and agility.
Collaboration tools such as mobile instant
messages, Facebook Workplace, Slack, or MS
Teams become a norm in today’s workplaces. No
work is done without these tools. Sitting on the
same floor yet people use them to
communicate, even with those they never met,
anywhere and anywhen. These tools also
provide customer-facing employees with
up-to-date information, helping them to make
the right decisions at the right time when they
interact with customers in ways never possible
before.
8
Transforming operations is less sexy and less
visible than transforming the customer
experience. Your internal process and
technologies may not be as modern as you want
it to be. Transformation requires good data,
available in real-time to the people and
machines that need it. For many companies, it
starts with overhauling legacy systems. It’s not
easy but well worth the effort.
Two-third (66%) of companies in
a recent IDG survey have
adjusted their process to speed
up digital transformation.
Digital Transformation Operational Efficiency

10. Before 2017 when Steve Jobs introduced his
game-changing iPhone model, Nokia was ruling
the mobile phone’s territory - hands down. The
phone manufacturer had nearly 49.5% global
market share. If someone uses any kind of
business analysis model (Porter’s Five Forces, for
example), there would be no clue suggesting the
imminent downfall of Nokia. At that time, the
barriers to entry into the mobile phone market
were sky-high. In retrospect, Nokia was a
‘market’ itself - people did not talk about what
brand they use, they talk about which Nokia’s
model they use. Cornering this gold-making
market, Nokia also had absolute power over
suppliers, producing phones faster than any
other mobile phone maker and at every possible
price point. There were no substitute products
for Nokia phones. The same goes for BlackBerry,
who recently quit the mobile business. Once a
mobile phone powerhouse, Blackberry is
famous for its physical QWERTY keyboards and
its focus on business people who back then had
the obsession for mail checking.
What went wrong? In 2007, people chose
phones based on the phones’ features. People
buy a Nokia N95 as it has a multimedia player, a
digital camera, and a large display screen. People
buy BlackBerry because of its corporate emails
on the go.
Soon that changed. The line between a
computer and a cell phone became blurred.
Phones nowadays allow people to do things that
computers do. People buy phones not for what
the phone did but what they could do with a
phone. Thousands of applications can be
accessed through the phone and its app store.
Business Model
Transformation
9
Digital Transformation Business Model Transformation

11. These models were created by Apple and
Google, allowing third parties, software
developers to build applications and distribute
them to users. Nokia and BlackBerry tried to
replicate but failed miserably. The ecosystem
created by Apple and Google grew at the pace
that left Nokia, Blackberry, Microsoft and other
players far in the rearview.
Business Model Canvas - a brainchild of Alex
Osterwalder - helps model the way companies
create value for customers, deliver that value,
and capture that value. For example, in the
advertising business, value is created by
connecting advertisers and potential buyers and
exposing them to promotions. Value is delivered
through the advertising medium, a TV, a
Website, or an advertisement in mobile games,
etc. Value is captured when advertisers get paid.
Another example is with E-commerce
businesses. Value is created by helping
customers buy something online. Value is
delivered through a web site, and captured
through credit card or online payments made by
the users.
It’s important to rethink your business model
and the steps to assess, innovate and evolve it in
order to remain competitive in the digital world.
Let’s look at popular digital business models.
10
To keep pace with the
fast-changing digital
ecosystem, companies can’t
afford to stand still - which
is the same thing as
stepping backward.
Digital Transformation Business Model Transformation

12. This is one of the most popular online business
models. Companies lure customers by
providing customers some basic features of
their products - most are subjected to
advertisements, on the off-chance that these
‘free users’ will pay to become ‘paid subscribers’
- with the privilege of unlimited access and no
advertisement.
This model exploits the wisdom of the crowd.
Companies obtain the services (or ideas) from a
large group of users via the Internet. The term
11
Freemium model:
Crowdsourcing model:
The company provides the platform, rules and
regulations, and payment methods to match
individuals who have something to offer with
those who want to buy this 'something'. Lyft is
an example. It helps connect people who need
a ride and people who have cars and want to
earn money by giving the rides. Other examples
are Airbnb, eBay, Uber, Grab, Amazon and so
on.
Mass customization is to produce unique goods
at scale. Companies applying this model
produce product variations to serve different
markets and to satisfy different customer
groups. Levi Strauss & Co. uses this model to
serve customers who want jeans that are
custom-fit instead of the one-size-fits-all ones.
Spotify creates millions of playlists that are
customized to individuals’ preferences. Release
Radar is a playlist personalized to the music
taste of the respective user.
Peer-to-peer model:
Mass customization model:
Digital Transformation Business Model Transformation
crowdsourcing also describes an online,
distributed problem-solving and production
model. My Starbucks Idea incentivizes
customers to submit ideas and engage with the
brand. It helps Starbucks collect over 50
thousand customer-submitted ideas to
improve its products. But most importantly, it
made customers feel like an insider.

13. 12
Predictions for 2020
2020 will be the year of customer-centric
experience delivered at large. Companies will
continue to pour their efforts and money into
anything that may make their customers happy
across every point of interaction. In short, the
goal here is to create and provide a seamless,
decent omnichannel experience - whether it’s
over the phone, through apps, websites, or
in-store. Not long ago, Aberdeen found that
companies managing a strong omnichannel
experience retained 89% of their customers on
average, while companies with inconsistent
customer experience lost 67% of their
customers.
Here's our take for this year:
Omnichannel experience In the upcoming years, MarTech (a shorthand for
marketing technologies) will be on the radar of
all industries. According to Gartner, 7 in 10
marketers see their MarTech toolbox as
effective at meeting their objectives, and
Martech is the largest area of investment when
it comes to marketing resources and programs.
Loosely defined, you could think of MarTech as
any kind of software or technologies that aid in
marketing, advertising, and customer & market
research. Martech could be found in
general-purpose tools such as data analytics to
specialized ones such as Marketing automation
software.
MarTech
Digital Transformation Predictions in 2020

14. 13
Moving from TechOps to NoOps
Digital Transformation Predictions in 2020
In the traditional, old-aged way of doing
business, there was one team of IT specialists
handling all matters related to IT. This approach -
coined as TechOps - was long behind the times.
And while DevOps continues to soar in its use
and popularity, many wonders when NoOps will
gain enough traction.
NoOps refers to an IT environment where
operations are automated, completely. As such,
companies applied NoOps can minimize or, at its
extreme, eliminate IT headcounts altogether.
Though most organizations are still not quite yet
at the point where their technologies can do
such things, some have successfully put NoOps
into use. One recent example is Mindtree, where
its Vice President, Rene Head, claimed: “It
[NoOps] is not just about IT delivery excellence;
it’s a win for the business as well,”

15. Digital tools are more accessible than ever. They
make the mighty giants all the more powerful,
and render the laggards obsolete quickly. To stay
afloat in this era, you need to rethink the role of
technologies in your business.
Providing excellent experience is no longer
enough. You need to provide a superior
experience - an experience better than that of
your competitors.
The bottom line
14
Digital Transformation The bottom line

16. Bibliography
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/
/cdn2.hubspot.net/hubfs/1624046/Digital%20Business%20Executive%20Summary_FINAL.pdf?t=1534365095051
Steve Knopper, The End of Owning Music: How CDs and Downloads Died, Rolling Stones. Available at:
https:/
/www.rollingstone.com/music/music-news/the-end-of-owning-music-how-cds-and-downloads-died-628660/
Buchholz S., Briggs B., Tech Trends 2020, Deloitte, 2020. Available at:
https:/
/www2.deloitte.com/us/en/insights/focus/tech-trends.html
Qualtrics, ROI of Customer Experience, Qualtrics, 2018. Available at:
https:/
/www.qualtrics.com/xm-institute/roi-of-customer-experience-2018/
PwC, Experience is everything: Here’s how to get it right, PwC, 2018. Available at:
https:/
/www.pwc.com/us/en/advisory-services/publications/consumer-intelligence-series/pwc-consumer-intelligenc
e-series-customer-experience.pdf
Deloitte, The true value of customer experience, Deloitte, 2018. Available at:
https:/
/www2.deloitte.com/content/dam/Deloitte/us/Documents/process-and-operations/us-cons-the-true-value-o
f-customer-experiences.pdf
PTC, Corporate Leaders, Digital Transformation Survey: Creating Products and Services in a Digital World, PTC, 2018.
Available at: https:/
/www.ptc.com/en/products/plm/capabilities/digital-transformation-report
George Westerman, Didier Bonnet, Andrew McAfee, Leading Digital: Turning Technology into
Business Transformation, Harvard Business Review Press, 2014.
IDC, IDC FutureScape: Worldwide IT Industry 2020 Predictions, IDC, 2020.
Capgemini, MIT Center for Digital Business, Digital Transformation: A Roadmap for Billion-Dollar Organizations,
Capgemini, 2011.
15

17. KMS Solutions is a technology consulting firm under the KMS Group umbrella that focuses on innovating
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About KMS Solutions: