Digital transformation has reached every industry, with 89% of business leaders naming digital transformation as a strategic priority, according to an IDC whitepaper. Engineering companies can advance digital transformation by adopting cloud platforms and ecosystems, moving to an agile way of working in a unified digital environment to meet dynamic and changing customer needs.

Digital transformation refers to the integration of digital technology into all areas of a business, in order to create new value by significantly altering business practices, both technologically and culturally to meet new market or consumer demands. 

A recent whitepaper published by IDC sets out the key steps engineering organisations are taking into digital transformation, as well as the role of cloud-enabled ecosystems and the importance of the cloud as a data platform going forwards. The following analyses are based on an IDC whitepaper, which can be downloaded at the bottom of this article.


The Need for Transformation and How Engineering is Making it Happen

To prove the value of digital transformation initiatives already in motion, enterprises must adapt how they produce their products and services to meet various digital transformation goals. These include meeting speed-to-market targets, competing globally in existing and new markets, and meeting customer expectations for varied and customised experiences. 

As digital transformation progresses, these are essential not only to meet the demands of a modern experience focussed customer but also to demonstrate a return on initial investments in digital transformation. Engineering organisations are taking vital steps to transform innovation by: digitally 

  • Enhancing R&D – leveraging digital technologies like cloud, collaboration and artificial intelligence to extend and accelerate R&D processes 
  • Increasing agility – moving to a rapid, agile, and digital approach to producing highly sophisticated products and services through flexible, accelerated methods, supply chains, and services   
  • Building unified platforms  enabling technical, business, supply chain, manufacturing, and services to work in a unified platform environment to ensure quality products and processes and meet dynamic customer needs consistently  


Ecosystems Will Play a Major Role in Successful Digital Transformation in Engineering

Ecosystems, the innovation of which is driven by the cloud, will play a key role in digital transformation by shifting patterns of competition and generating new business models. Rather than companies competing individually against other companies, ecosystems will compete against different ecosystems. 

In this case, ecosystem refers to a dynamic set of interactions between companies, software, data and people, centred around the end-to-end journey for the customer. Collaboration and co-innovation between partners, customers and suppliers and even competitors will transform business by forming the foundation for new business models. IDC predicts that by 2021, 82% of revenues from digital transformation business models will be ecosystem enabled.  

The cloud is a key enabler of digital transformation in its own right, but also as an enabler of ecosystem innovation which in turn fuels digital transformation. 90% of organisations that are best in class in digital transformation also use multiple cloud services and cloud platforms. The cloud acts as a foundation for collaboration across ecosystems; this allows participants to create experiences which meet the expectations of users used to consuming services on demand. The use of on-demand cloud services can reduce costs by avoiding lengthy and heavy installations.


The Importance of the Cloud as a Delivery Platform

To support their digital transformation efforts, organisations are building out their digital platform, which is cloud-enabled and data-drivenBecause of its scalability and flexibility, cloud’s importance as a delivery platform is rising exponentially as digital transformation momentum accelerates. In fact, public cloud services are now growing at almost seven times the rate of overall IT market growth, according to IDC.  

The cloud platform consists of an intelligent core and two streams of data (internal and external) which are fed into and combined in the core for analysis. Internally gathered data comes from internal assets, people, connected processes and APIs. External data is gathered during ecosystem engagements from chatbots, Internet of Things solutions, as well as augmented and virtual reality. 
For a more detailed graphical representation of the cloud platform, see figure one in the IDC whitepaper.  

Cloud platforms facilitate digital transformation by creating an interconnected landscape in which both private and public clouds enable agility, flexibility and fast execution: all elements necessary to achieve digital transformation. 

To Summarise

Digital transformation has now reached every industry, and digital transformation initiatives now need to demonstrate a return on initial investments. Engineering organisations are using cloud technology to pursue this by accelerating R&D and by moving to an agile approach on a unified platform. key way in which the cloud enables digital transformation is by accelerating the growth of ecosystems. IDC predicts that these will alter business models as digitally connected companies and stakeholders co-evolve within ecosystems to meet new market demands.  


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Download the Full IDC Whitepaper

There’s more where that came from. If you’d like to read more about Digital Transformation Built on the Cloud or follow any of these statistics to their source, you can download the full whitepaper below.

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