A digital transformation is the process of reimagining business in the digital age. Salesforce defines digital transformation as “the process of using digital technologies to create new—or modify existing—business processes, culture, and customer experiences to meet changing business and market requirements.” The Enterprises Project, a community of CIOs and IT leaders spearheaded by Harvard Business Review and Red Hat, defines digital transformation as “the integration of digital technology into all areas of a business, fundamentally changing how [businesses] operate and deliver value to customers.” But what does digital transformation actually mean for an enterprise?

Forrester Consulting and ServiceMax recently conducted a study on this topic and released the results in its “From Grease to Code: What Drives Digital Service Transformation” report. Forrester suggests the three key driving factors behind digital service transformations are the skills gap, the need for actionable equipment data, and the desire to improve the customer experience. Digital technologies, including the IoT (Internet of Things) technologies, can help.

The survey includes input from 675 global decisionmakers that are currently undergoing or have already gone through a digital transformation. One key finding was that the digitalization of industrial services requires new skills to manage and operate machinery. Unfortunately, it can be difficult to obtain these skills. Almost all respondents (97%) said they’ve had challenges sourcing talent. To try to address the skills gap, 88% of respondents said their companies are working to increase the digital skills of service technicians, 81% said they connect with third-party contractors with access to technical knowledge in realtime, and 76% say they are implementing a “mixed-labor” model, in which they incorporate contractors and other third parties into their workforce.

One step within a digital transformation is finding ways to harness equipment data, and then turning this data into actionable insight. Eight in 10 respondents said digital transformation has increased the company’s need to collect and use equipment or service data to drive business decisions. But the research suggests this remains a painpoint for firms. To compensate, companies often use Band Aid-type fixes. About three-quarters (78%) say they lack the internal resources and knowledge to reduce equipment costs on their own, and more than half (64%) believe their equipment costs are too high. The need for equipment and service data is only going to increase in the near future, with 84% saying they believe this will be true in the next five years.

One common goal of digital transformation is improving customer service. For many businesses, this means investing in predictive maintenance (39% of participants in the Forrester/ServiceMax survey say they already have, and 49% say they plan to do so within three years). New service delivery models, such as as-a-service delivery models, are also a part of many organizations’ digital transformation plans. More than half (60%) of survey respondents believe as-a-service offerings will outpace traditional equipment sales in terms of revenue gains during the next five years. For companies looking to undergo a digital transformation, focusing on obtaining the right skills within their own organizations, prioritizing equipment data, and looking for ways to improve the customer experience is a great start.

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