In this era of digital transformation, new technologies have opened up opportunities for businesses and created new challenges. At present, advanced technology has also become more accessible to a wider audience. In a recent past, only big companies had access to the latest technological developments. Now, digital technology is reachable to businesses of all sizes. Such accessibility allows a burgeoning digital culture which can bring many advantages across all business functions. Studies reveal that 55% of start-ups have already adopted a digital business strategy compared to 38% of traditional enterprises and start-ups increase revenue by 34% when they rely on digital-first strategies.
Digital transformation can improve cost efficiency and make your company stand out from the competition, At present, the collaboration between technology and business processes is no longer optional, but a must-have.
What is digital transformation?
Digital transformation is the deep transformation of business activities, competencies, and business models to leverage the opportunities of digital technologies. It is about using digitalization to transform a business unit or an organization approach to business. This concept marks a profound rethinking of how an organization uses technology and resources to change business processes and performance.
What is the value of digital transformation?
There are many operational benefits of digital transformation. Some of them are:
- Improved efficiency
When manual processes are replaced with digital versions, the workflow becomes faster making the whole organization more efficient.
Better customer experience
Customer satisfaction is fundamental for any organization and to improve it, managers need to measure and understand metrics directly related to this concept. The better the customer satisfaction levels, the higher the digital transformation success rate for the business.
Informed decision making
When entrepreneurs have sufficient, well-planned data, they take decisions that lead to success rate, brand suitability and the achievement of the organizational goals. That is why information is so important for business success.
- Boost profitability
Digital transformation can be measured with profit margins. When profits increase, companies have more resources available to implement changes that can improve efficiency and productivity.
- Improved market penetration
With improved efficiency and better decision making, the process of market penetration becomes more competent and this help to increase customer base, customer satisfaction and profits.
According to the book Leading Digital: Turning Technology into Business Transformation, by George Westerman and Didier Bonnet, companies that leverage digital technology get higher revenues (+10% on industry average), are more profitable (26% on industry avg. EBIT & Net Profit margin), increase their value proposition and improve operations by a margin of 79 percent. They are also able to add real long lasting value to their customers.
How to leverage digital transformation?
- Use information to optimize business operations
Success does not depend on how much data you can collect but on how quickly you can analyse and act on that information. Digitalization can help you to turn data into instant insights, to optimize processes and to eliminate unneeded costs. Streamlining business operations and reducing operational costs will help you to increase worker productivity and improve business alignment.
- Create a better employee experience
Another catalyst for implementing digital transformation is a change in workforce behaviours. To attract and retain top talent, companies have to adapt themselves to new working environment. A 2017 study by Softchoice revealed that 94% of office workers in North America need to collaborate with other teammates as part of their job, and 83% rely on technology to enable them to work with off-site employees in real time. This new reality means organizations must prioritize the employee experience. Digital tools are essential to bridge distances within an organization in order to enable effective communication and to improve collaboration.
- Create value from data
Companies that use big data effectively could generate higher revenues and develop more original ideas and competences. In the process, they create entirely new revenue streams, business units, and stand-alone businesses.
Many businesses have big amounts of data that contain a huge potential to be used for cutting down costs or enhancing customer experience. It isn’t enough to have the data; it needs to be used effectively to make informed decisions. Understanding the effects of that information and the effect to the business’s profit margin is essential to develop a strategy that keeps the company profitable. Getting the right information means understanding which data is relevant to the company’s decision-making process.
Digital transformation is not an easy process. Each company needs to evaluate the opportunities, requirements and resources to prioritize their efforts to accomplish achievable goals.
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