Autodesk research reveals that digitally mature companies are bracing for the next wave of digital disruption, known as Convergence

Covid-19 has accelerated the digital transformation, but the distance between digital leaders and followers is widening

A global research project by Altimeter and Autodesk revealed that digitally mature companies are embracing the next wave of digital disruption, known as convergence. Innovative practices such as virtual communications, personalized digital engagement, immersive modeling, rapid prototyping and efficient collaboration are now commonplace due to a need that was accelerated by the Covid-19 pandemic.

The survey, which surveyed 749 business leaders in the US, UK, Germany, France, Japan and China in architecture, engineering and construction (AEC), design and manufacturing (D&M), media and entertainment (M&E), found that the disruption caused by the pandemic created two classes of companies:

• The first, with a low level of digital maturity, struggled to implement these innovative practices, which are still in the process of recovery.
• The second, with higher levels of digital maturity, had already implemented the latest innovative practices and thrived. This group is prepared for the next wave of digital disruption, known as convergence.

Convergence is the blending of previously separated technologies, processes and data to create combinations of products, services and experiences that reshape industry processes and structures. Most companies today recognize convergence as a trend that will impact them in some way. The survey found that 58% of respondents think about convergence or recognize that it is one of the most critical parts of their business. One of the main conclusions of the study is that digital maturity is a strong indicator of how much a company believes it will be affected by convergence.

To determine how digitally mature a company is, respondents were asked to select one of the following steps to define their business:

• Stage 0:"Digital transformation is not a priority for us, nor do we expect it to become one in the short term."
• Stage 1:"We have just started to build a case for digital transformation."
• Stage 2:“We're starting to understand customer journeys, improving digital skills, mapping processes and seeing early traction.”
• Stage 3:"We started to digitize our operations at scale, but the modernization of platforms and processes is happening in a departmental way."
• Stage 4:“We have digitized operations and now we're focused on integrating them so that data can be used more strategically across the organization.”
• Stage 5:“We've established a strong digital foundation and are now focused on leveraging data and artificial intelligence (AI) to optimize processes, products and services, and customer experiences.”

59% of companies with greater digital maturity (Stage 5) said convergence was one of the most critical influences on their business. As maturity levels decline, recognition of convergence is also a disruptive trend. This makes sense as less digitally mature companies are struggling to implement practices and innovations that are hallmarks of digital transformation.

Figure 1 – Higher digital maturity stages are more likely to see convergence as a critical influence

Percentage of those who selected "Convergence is one of the most critical influences on my business"

This does not mean, however, that less mature companies should wait until they reach later stages of digital maturity to think and prepare for convergence. In fact, to get to Stage 5 and reap the rewards of convergence, the foundation needs to be built as soon as possible.

The first step in building a foundation for digital transformation is to understand all forms of convergence and identify the categories that will have the greatest impact on the business.

The survey revealed four levels of convergence:

• Process Convergence:Previously discrete processes and workflows are now being connected across businesses for greater efficiency and integrated goals.
• technological convergence: Technologies such as Cloud, IoT, AI, Supply Chain Management, virtual and augmented reality are converging to create use cases and solutions.
• Data/information convergence:Previously nested data/information is now more accessible and is being used across businesses and industries to power a range of new products and services.
• Industry convergence:Previously discrete industries are becoming more similar and connected, creating opportunities for value creation.

By creating levels of convergence, we can map the impact that each type of convergence has, and how it varies by industry.

Figure 2 – Convergence of technology and processes has the greatest impact on the industry

While the benefits of convergence may seem apparent at all stages of digital maturity, many companies face challenges in implementing the steps they need to take to fully realize these benefits. Some of the main challenges include:

• Culture– Resistance to change is an issue in many companies, especially large ones with outdated systems and practices.
• Data for Machine Learning– Many innovative processes brought about by convergence are made possible through the power of AI. While AI can be a powerful technology that creates high efficiency, there is a risk of deploying it incorrectly. Feeding outdated or biased data from the AI engine can create a snowball effect of the machine continually learning and doing the wrong thing.
• Designing for convergence– Convergence requires designers and project planners to be much more expansive, visionary, and disciplined thinking than they have in the past. It requires training, familiarity with the use of tools to help facilitate this kind of thinking.
• Hire the Right Skills– As with any other innovation, hiring people with the right skills to thrive on convergence is a challenge, especially as they are scarce and in high demand at the beginning of the outage curve.

“Understanding convergence and making it work for your organization is an untapped competitive advantage,” said Alexander Stern, technology strategist at Autodesk. “Processes, data and technological convergence most impact the internal functioning of a company. It's in the convergence of industry – driven by external forces – where magic happens. It is when previously disparate industries, or industries that operate in parallel, find ways to collaborate for mutual benefit. This collaboration can take many forms, including partnerships, transactional relationships or simply shared resources.”

“By assessing their digital maturity and investment priorities, companies can use this data to assess themselves and chart a roadmap for transformation,” says Charlene Li, founder and senior fellow of Altimeter. "Doing this can effectively allow companies to prepare for any kind of digital disruption, and even prosper because of it."