Companies usually used to run the old-fashioned manner, but then Covid occurred, and the world was forced to shut down. Consequently, corporations, especially SMEs, have to transition their activities to a digital platform to thrive in the “New Normal.” Furthermore, with ever-changing technology, the world is transitioning towards a more digital and streamlined future, and the necessity for organizations to follow pace is unavoidable. And to fulfill this purpose, the digital transformation seems to be the only way. Enterprises nowadays have already started digitizing and streamlining their services and processes to face the competitive market.
What does it mean to transform digitally, and why does it matter?
As part of the digital transformation process, companies must integrate internet-based tools and technology into their activities. Genpact’s chief digital officer, Sanjay Srivastava, describes this as “enterprise change supported by technology.”
In 451 Research’s “Voice of the Enterprise: Digital Pulse, Coronavirus Flash Survey” performed in October 2020, half of the enterprises have begun their conversion to digital. 45% of corporate executives are in the execution phase of digital transformation, 15% are in the review and development phase, and 36% are in the “laggard” group.
According to the poll, 93% of respondents who had previously used digital technology before the pandemic were able to react effectively to the COVID-19 problem because of the investments they had made in digital solution. Laggards were just 65% in agreement.
What are the advantages of digital transformation?
According to parameters, digitals efforts are against numerous business measures, much like the return on investment (ROI) for more traditional initiatives.
Digital transformation initiatives provide a wide range of advantages that are interconnected and interdependent. However, the predicted ROI for these programs differs from one program to another and from one company to another.
In business, digital transformation means integrating new technologies in all areas. This has a profound impact on how a company is run. Digital transformation has provided benefits to organizations across industries: it has enabled businesses to modernize legacy processes, accelerate workflows, strengthen security, and increase profitability.
Moreover, for startups and even medium-sized businesses, digital transformation is the way forward. Even if you don’t feel like shifting, you cannot survive without making the shift.
1. A rise in productivity and efficiency
By speeding up and simplifying procedures, digital technology may improve efficiency and production. For example, robots may surpass humans in many different ways. It was shown that IBM’s bots could accomplish jobs 20 times quicker than humans and that they were error-free. Humans can’t keep up with the speed and precision of business intelligence technologies or data analytics solutions. Workers may then utilize the results of that study to make choices more quickly than they could have before.
2. Managing resources more effectively
Increasingly, businesses are replacing antiquated systems with new IT architectures to improve data flow and improve operations. CIOs and other executives have used an end-to-end digital strategy. It helps them to get rid of excessive and unneeded technology, and the associated costs. Firms can save money by only paying for what they need, rather than paying for extra capacity to handle spikes in demand.
3. Improved resilience
Organizations that embrace digital technology and create a digital culture that celebrates change are better able to quickly adjust to changing market forces, even major upheavals like COVID-19. Firms can withstand the ups and downs of everyday operations and, more significantly, once-in-a-lifetime interruptions. Digital technologies, like cloud computing, are making it easier for organizations to provide built-in redundancy and flexibility.
The Hackett Group’s Pastore claimed that although most executives were aware that digital transformation advantages helped them construct a more resilient organization, many now put a more excellent value on these technologies beyond 2020. Before, he said, “resilience wasn’t as big a concern as it is today.”
4. A greater level of agility
Due to their digital expertise, Pastore said their companies could not only respond to change but also profit from it. Due to their growing dependence on cloud computing, digitally mature firms have an easier time scaling up or down as needs change.
In addition, Agile techniques and DevOps enable teams to design and deploy new features more rapidly and effectively, so they can meet market demands as they grow.
According to a survey by Workday, leading companies with mature digital transformation feel twice as confident in their ability to restructure quickly to meet changing demands than those lagging.
5. Better engagement with customers
Andrew Binns, managing principal of Change Logic LLC, said, “Transformation transforms completely what you know about your clients.” “What type of connection you can have with consumers changes as a result. They may be made more personal by you.” Companies can use digital technology to gather, store, and analyze consumer data to understand their customers better. With the help of data analysis and AI, businesses can better understand their customers and develop goods and services that cater to their specific wants and requirements.
6. Increased responsiveness
A digitally transformed organization is better equipped to anticipate consumer needs. And shifting market dynamics because it has a stronger customer engagement program.
For an end-user, it is all about the experience. If the website or the app or the provided solution is not user-friendly, there is a good chance that the user will not move forward with the solution. That is why it is necessary to get things done in a way that it creates ease for the user.
7. Improved innovation
Companies in all sectors may now generate new goods and services that they couldn’t before because of digitalization. Customers and contractors may now be connected over the internet. For that reason, a virtual personal trainer is now available to everyone who has access to a personal gym device.
Customers may rent specially chosen clothing items from retailers. Binns said that “digital enables firms to innovate and establish new niches.” “Though they receive all the attention, this isn’t simply a Google or Amazon thing. Even well-established companies are launching new operations outside of their main areas of expertise.”
8. Faster time to market
According to experts, one of the main advantages of digital transformation is shorter product lifecycles. This is especially relevant in fields with significant development expenses. For example, Binns noted that “taping out” a new semiconductor may cost $1 million. “To get to that point, a product must clear an extremely high bar.
The result is a delay in new goods, including certain components. Therefore, when you do all this virtually, you’ll reduce the time it takes to get a product to market. In the next ten years, this might have a significant impact on the economics of whole sectors.”
9. Increased revenue
Reports from the SAP Center for Business Intelligence and Oxford Economics indicated that 80% of executives at mature digital transformations reported greater profitability, and 85% reported a rise in market share. According to Srivastava, “Transformation gives this new digital backbone that enables you to expand your company, your income moving ahead.”
10. Continued relevancy
“Digital transformation offers you the agility required to respond to changes in the environment to create value even in the long term and to remain relevant for the sector you’re in,” Srivastava said.
In conclusion, digital transformation is not just a necessity, it is a way to move forward if you want to survive and compete in an information age.