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The Digital Revolution's Promise for Efficiency and Cost

Posted by  Chris Tithof

Digital transformation spending may reach $2 trillion by 2019, according to IDC, but so far this revolution has failed to deliver on its promise of improved productivity and higher quality jobs. Typically, output increases significantly after a recession ends. Only the most talented and skilled workers in tech-centric positions experience better wages. Most employees have flat incomes that fail to keep up with inflation, with a mere 1 percent increase over the past decade. The millennial generation's earnings see few raises and start out much lower than their parents' at the same age. American Progress found many 30-year-olds today make the same wage as 30-year-olds in 1984, even though they have more education and 70 percent higher productivity. New technology, such as the Internet of Things, may help improve efficiency and bring down costs for companies prepared for the future.

What's Limiting Productivity Gains?

Cutting edge technology gets its start in a few select industries rather than spreading evenly across the business landscape. Some areas, such as manufacturing, get a disproportionate amount of productivity improvements while the rest of the market lags behind. Corporations attempt to gain competitive advantage by deploying the latest and greatest solutions, which requires high-skill talent from engineers, programmers, software developers and other STEM workers. The industry demand for these skill sets leaves limited resources for other markets, even though these areas may achieve greater benefits from the same technology.

The Future of the Service Sector

High-tech companies see small incremental improvements in productivity because they already have a strong digital foundation in place. People-centric sectors, such as the service industry, hold the greater potential for spurring the digital revolution and improving wage growth for more significant numbers of workers. Many work processes for service-based businesses require manual human input, such as taking orders, teaching classes and diagnosing illness. A digital transformation impacting these job duties could substantially improve the output created in many sectors and reduce the cost for consumers.

Retail

Integrated systems reduce the time needed to manage inventory, order products, create schedules and pull up customer information. Retail workers get to focus on helping the clients and creating a personalized experience, rather than spending hours in the store after close catching up on essential job duties.

Healthcare

Intelligent diagnostic machines help doctors and nurses narrow down potential illnesses and provide treatment plan information. Telemedicine allows healthcare professionals to connect remotely with patients unable to make it into the office, increasing the amount of people a practice can help. Advance patient registration and check-in kiosks reduce intake times and limit how long someone waits for their appointment.

Higher Education

Professors aren't constrained by the students who can physically fit in their college classrooms when they have access to online courses. They can effectively teach courses to people all over the world, which would previously require a lot of travel time and multiple professors. An online portal contains the information students need to succeed in their classes, and advanced analytics identify useful resources customized to each person.


The common theme for effective digital transformation revolves around letting one person efficiently do the work of many. Technological advances need to progress past manufacturing, tech, finance and a handful of other industries to achieve a real productivity revolution. By starting with the people-centric areas, wages and output improve for a larger employee demographic rather than the few sitting at the technological top.

Chris Tithof

How can you benefit from the unparalleled need for digital transformation? As a Unit4 Partner, you can deliver a seamless digital experience with people-centric ERP to the countless service and government organizations who need to transform for their digital future. Focus on higher-value services, help your clients grow, and build a sustained relationship as a trusted strategic advisor in the process.

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