Top 8 trends shaping up digital transformation in 2021

7 Mins read
Digital Transformation Trends 2021

The year 2020 was unforgettable in many ways. It was a year of incredible stories of courage, optimism, but there were some sad ones too. While it challenged us in many ways, it also taught us the value of freedom and the importance of being digitally advanced.

From startups to conglomerates, COVID-19 wreaked havoc on all types of businesses and industries. The only difference was in the impact. The companies which were digitally prepared were able to bounce back quickly as against those who still relied on traditional brick-and-mortar ways of doing business.

High street retails were the worst hit. COVID-19 left them with the options of either shutting down the outlet completely or moving online with the help of technology. There are several examples of businesses which realized the value of digital and acted upon it quickly like the gyms and food retail outlets that soon adopted an online mode of service to avoid a shutdown.

In a study by McKinsey, companies have accelerated the digitization of their customer and supply-chain interactions by three to four years.

Hence, to stay competitive in this new business environment, companies need to transform digitally.

What is digital transformation?

You must have seen this term being used generously for the past two to three years.

But what exactly is digital transformation?

In its simplest sense, digital transformation defines how an organization delivers value to its customers using technology, people, and processes. It is about rethinking technology.

Gartner defines it as, “the process of exploiting digital technologies and supporting capabilities to create a robust new business model”.

In a survey by PTC, improved operational efficiency was identified as the major benefit of adopting a digital model of doing business.

Now when we know that the digital transformation will pave way for the new ways of doing business, let’s move forward to explore the top digital transformation trends for 2021.

Top digital transformation trends in 2021

1. The explosion of Customer Data Platforms (CDP)

In the age of digital transformation, a lot of data is being produced at different scales. Whether the customers are having an interaction with your company or purchasing a product or service, you get a lot of data from them. This is true for both small and large organizations. The only difference is how this data is used to gain more information about customer behaviour and choices. For smaller organizations, with limited marketing stack, this will not be a trouble. But for companies with a variety of products, marketing channels, and customers, gaining insights from this vast pool of data is a big challenge.

Here, a customer data platform can help. A CDP acts as a single source of customer information. You can use this information to create more personal and relatable marketing campaigns for your end customers. A study by Oracle found that companies that use CDPs enjoy 2.5% more in customer lifetime value than the ones that don’t.

At first glance, it may seem that CDPs are solely for the marketing department, though it is not true. The finance and IT teams can also use CDPs for making quick decisions about services, products, and other company investments.

2. Refocus on cybersecurity

A few years ago, roughly three to four years back, the digital transformation started as an innovative approach to process and product developments. Companies started fast-tracking initiatives like DevOps as part of their faster go-to-market strategies. At that time, one thing that was left behind was – security. In fact, research firm Gartner had predicted that by 2020 60% of digital businesses would suffer major service failures due to the inability of security teams to manage digital risk.

And the prediction came true with a rising number of cyberattacks in recent years. In 2020, more than 445 million cyberattacks were reported.

Suggested Reading: Top 10 cybersecurity incidents in 2020

Today, IT organizations as a part of risk management have CISOs (Chief Information Security Officers), who keep cybersecurity at the top of their goals.

The COVID-19 situation has further aggravated the need for robust cybersecurity practices. While there cannot be a single solution for all security risks – creating a balance between people, processes, and technology is crucial.

Security teams must ensure that the security practices within the organization match the speed of digital transformation. In other words, the focus should not only be on ‘how to speed up a process?” but on “how to speed up a process safely?”.

Cybersecurity will be one of the key digital transformation trends to watch out for in 2021. CISOs must evolve to act as a guide and advisor to internal teams which are deploying any new technology. It is time to integrate technologies like Artificial Intelligence (AI), machine learning (ML), and the cloud into the security solutions used within an organization.

3. Multi-cloud architecture

The recent innovations in the cloud have resulted in a move from single architecture cloud to a multi-tenant, multi-architecture cloud and hybrid clouds. A multi-cloud architecture refers to the use of one or two private or public clouds to distribute application and workloads within an organization.

The COVID-19 situation has also created a push towards the adoption of multi-cloud architecture to reduce business continuity risks. This is because organizations are looking for simpler ways to manage the new model of working with an increased focus on enabling remote work and security.

A multi-cloud strategy is adopted for several reasons like resilience, data residency requirement, and disaster recovery.

Most organizations adopt a multi-cloud strategy out of a desire to avoid vendor lock-in or to take advantage of best-of-breed solutions,” Gartner VP analyst Michael Warrilow said in a Smarter with Gartner post.

The only challenge is the increased infrastructure management complexities. Here, organizations must look for cloud management and automation solutions to manage their multiple cloud environments. These will also help them to meet agility requirements and explore new models of delivery.

4. Democratization of AI

Democratization AI can foster the speed of digital transformation within an organization and hence it is one of the most important digital transformation trends for 2021.

In simplest terms, democratizing AI is making it accessible to every organization and if possible, to every person within an organization. This includes using AI-based tools to see and identify patterns, make decisions, predict, learn, and improve.

From tech-savvy startups to large enterprises – every company will try and integrate AI in their systems and processes. While many may have the required resources to make this integration possible, others can take help from AI-as-a-service providers and AI solutions from vendors like Google, Microsoft, and AWS to begin their AI journey.

Apart from the implementation complexity, AI can also be expensive for many companies. This is something which companies will need to work upon.

The perfect example of AI integration can be seen in healthcare. Tech enthusiasts believe that the application of AI in healthcare has revolutionized the industry.

Also Read: How VR and AR are driving business transformation

5. Contactless solutions and digital payments

The rise of no-touch solutions – contactless dining and digital payments are also key digital transformation trends to consider this year.

Due to COVID-19 induced social distancing norms, restaurants and cafes are coming up with contactless solutions to take customer orders. This includes not only the online mode of delivering foods or takeout services but also in-seat ordering. In-seat ordering refers to a system wherein the customer can order food from their seats using a mobile app or a QR code without having to stand in queues or missing the show when in theatres or convention centres.

QR codes allow customers to browse menus and order food and beverages and pay with a mobile device, all while seated.

Similarly, digital payments are also a great way to avoid contact in a store. The use of digital payment modes is allowing people and businesses worldwide to access the digital economy. Digital payment is a part of the various digital transformation initiatives being taken in the banking industry. According to Statista, the total transaction value in the Digital Payments segment is projected to reach US$6,685,102m in 2021.

The inclination towards contactless solutions and digital payments will require solid digital infrastructure support, thus accelerating digital transformation.

6. Automation

Automation and digital transformation tend to co-exist. The primary reason being that the adoption of one leads to an increase in the other. As companies automate more of their processes, they can increase the pace of digital transformation within their organization. While automation is the process the result is digital transformation.

Due to COVID-19, businesses will now focus on automation more than ever. Especially the ones in manufacturing and other secondary industries. Here, the business leaders would now need to adopt automation practices to sustain their businesses and also to enable smoother operation of business practices.

According to the World Economic Forum, 80% of business executives are accelerating plans to digitize work processes and deploy new technologies. We can also expect automation in other sectors like retail, cybersecurity measures, and so on.

Gartner further predicted that hyperautomation will be a key technology trend in 2021. It defines the integrated use of technologies like machine learning, RPA (Robotic Process Automation), artificial intelligence, low code and more. Businesses might also move towards cloud-centric automation solutions for better scalability and reduced cost of ownership.

7. 5G

5G has been a buzzword for the past two to three years. This year, it is all set to go mainstream. The adoption of 5G will accelerate digital transformation.

For telecom operators, 5G can bring a host of opportunities – from upgrading capacity to delivering new content, services, and interactions in unimaginable ways and speed.

5G also has the power to redefine business models and operations by drastically improving how they deliver services to the end customers. It will bring with itself faster speed, lower latency, and a significantly higher density than the 4G networks.

However, to deliver and reap the full potential of 5G, companies will need to invest more in network infrastructure, especially, the cloud services providers (CSPs).

CSPs will need to work out the best approach to deliver services using 5G. This will also pave way for the adoption of telco cloud – a software-defined technology that can support both current 4G while laying some groundwork for the 5G.

8. Data Analytics

Making decisions using data is an important tenet of digital transformation. Data is the fuel for your business, but it needs to be sorted, processed, and analyzed to realize its true value.

Smart data analytics can help you extract useful information from the processed raw data. It fosters better decision-making and enhances organizational productivity.

Data and analytics will be the keys to accelerate an organization’s digitization and transformation efforts. By 2022, 90% of corporate strategies will explicitly mention information as a critical enterprise asset and analytics as an essential competency – Gartner.

The different types of data analytics can have different implications across different departments. For example, while descriptive analytics will help you analyse “what happened?”, the diagnostic analytics will help you define the “why it happened?”. As such, different teams within an organization can make use of these data analytics measures to find answers to complex problems. It can help in predicting consumer behaviour, streamlining supply chain processes, optimizing sales pipeline, etc.


Before formulating a digital strategy for your business, you must remember that digital transformation goes beyond technology. It is not as simple as picking technology and starting using it. You must set concrete goals and statements to define the digital strategy for your business. Next, you must focus on changing the mindset of the people involved i.e., your employees. They are the ones who will help you carry out your digital business transformation goals.

It is also important to stay updated on the latest digital transformation trends. Like the ones, we shared in this blog. It will help you choose your digital strategy wisely.

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