According to IDC (International Data Corporation), by the year 2022, 60% of global GDP will be digitized. Growth, it says, in every industry will be driven by digitally-enhanced offerings, operations and relationships. Successful companies in a digitized world, the report suggests, will be those with innovative digital transformation plans embedded in their business strategy.
During the 2020 Covid pandemic, the digital transformation of businesses and society for a sustainable future received an unexpected boost and attention. Overnight, brick-and-mortar retail gave way to online buying, business meetings moved to Zoom and MS Teams, and schooling went almost entirely online. The pandemic had a calamitous impact on our society but the move to a digitized ecosystem opened the world’s eyes to the possibility of aligning digital transformation to a sustainable future.
Sustainability is a business imperative
Today’s customers are looking at brands that utilize green manufacturing practices, introduce eco-friendly products, and judiciously manage natural resource use and environmental impacts of their operations on air and water and soil. A Salesforce study suggests that 88% of customers wanted digital innovation and initiatives to influence products and solutions. Institutional investors are also increasingly asking corporate boards tough questions on environmental, social and governance (ESG) topics seen as crucial to long term value creation of every business. They want credible action, and ESG performance aligned to sustainable business that addresses all stakeholders (customers, partners, suppliers, employees and communities). Larry Fink, CEO of Blackrock, a large pension fund, told investors that climate risk is investment risk. Anand Mahindra, chairman, Mahindra Group has also said it is in everyone’s interest to grow business in a sustainable manner.
Digital transformation and sustainability are complementary
Business leaders and governments have already pledged themselves to a variety of sustainability goals. These include Net zero, sustainable supply chain, circularity, and eco-friendly products. The path to achieving these goals is not clear.
To create sustainable business models, businesses need digital tools for productivity, business process management, asset management and data analysis. Technologies such as multi-cloud, digital collaboration, edge computing, AI and Machine Learning can help analyze the trillions of data points from all business operational touchpoints – from across the value chain – manufacturing to logistics, customer service, and facilities management to IT infrastructure. On the basis of data analyzed, companies are now beginning to rejig their business models or building new ones, ground up, incorporating insights that promote sustainability.
As businesses embrace greater digitization and alter their business models supported by technology and data, there will be a need for more data centres that are at the heart of technological change. It is therefore important for all businesses to run their digital infrastructure on sustainable, resilient data centres. Studies suggest that the ICT sector emits about 2% of global carbon dioxide emissions, which in terms of impact is comparable to aviation. To tame the carbon impact of a rapidly growing digital society, companies must work with partners equipped with the right technology and solutions to enable decarbonization and sustainability goals.
The Collaboration Imperative
Sustainable digital transformation requires collaboration and innovation. Companies must work alongside others collaboratively and make products and solutions that reduce the impact on the environment. In this journey, companies can utilize digital tools that enable them to create sustainable business models that benefit all stakeholders – employees, consumers, suppliers and investors. An EU-based renewable energy company has collaborated with an IT company to utilise a variety of cloud services like ML and analytics to improve performance, decrease costs and increase safety.
The rapid digitalization catalysed by COVID-19 presents the opportunity for companies to reinvent the use of technology and integrate sustainability into business strategy. Businesses can make purpose-led decisions that put people and planet at the core of their digital transformation strategies hence create long-term value and a resilient future.
Shalini Singh joined VMware in 2015 and leads strategic company priorities such as science-based targets, waste management and is responsible for execution across India, Asia-Pacific, Europe, Middle East, and Africa. Prior to VMware, she worked for Stanford University leading carbon accounting, sustainable IT programming and demand-side energy management. She has successfully driven strategic and tactical goals across functional teams in diverse sectors, demonstrating influence, leadership and unbridled passion.
Views of the author are personal and do not necessarily represent the website’s views.