Digital transformation is a comprehensive process of integrating digital technology and methods into every facet of the business, consequentially revolutionizing the modes of business operation and value delivery to the customers. Moreover, it also translates into a philosophical adjustment where businesses are expected to perpetually question the established practices in search for improved solutions.
Staying relevant and competitive in any modern industry demands leaner operations and fast-paced progress. Digital transformation enables all types of businesses to shed waste of resources, cut down redundancies, and enhance the efficiency and effectiveness of how every operation is carried out.
Key Aspects of Digital Transformation
Digital transformation is a loosely defined term and its meaning may vary from business to business. This is why it is challenging to identify a universal definition that fits all businesses adequately. That being said, amidst several variables there are some constants and familiar tropes found in case studies and historically implemented frameworks that industry leaders agree on for initiating the process of digital transformation.
These constants include a shift in business culture and leadership, empowerment of workforce, multi-pronged integration of digital technology, enhancing flexibility and versatility of operations, and most importantly, radically improving the customer experience through insights based on a collection of relevant data and information.
The significance of Digital Transformation
Gartner’s CIO Agenda unveiled that, by 2020, digital business will take one-third of the entire pie of a business’s overall revenue. IDC also reports that globally, digital transformation can produce up to $18 trillion in business value.
Another report from Gartner’s revealed that 66% of businesses expect to generate additional revenue through business operations, 48% believe they’re creating more revenue and business channels, 39% expect to cut down business expenses, and 40% think digital transformation will empower their workforce to achieve goals quickly and conveniently.
Staying Ahead of the Curve
If a business is not considering digital transformation there is a very high chance that it will soon be overthrown by a competitor who is. According to a survey, executives estimate that 47% of their revenue will be harnessed by digital. This indicates that a larger number of businesses are opting for digital transformation as their focal growth strategy for the upcoming years.
Exploring New Revenue Streams
Digitization will no doubt increase profits and efficiency as many of the overhead costs in businesses are associated with maintaining slow legacy systems. Digital transformation will not only introduce new digital solutions but also enable the employees to achieve increased productivity.
Improved Customer Experience
Today’s customers have been empowered by various means. Their lives have already been digitized and businesses need to catch up quickly in order to meet their growing needs. Digital transformation helps businesses bridge this gap by knowing and meeting customer demands. Digital initiatives have started playing a huge role in customer service, where a customer had to physically visit a store or branch they can now sit at home and get their queries answered. Digital platforms also play a huge role in marketing and understanding of consumer trends.
Digitizing Processes and Business Models
Businesses that switch to automation are more likely to reduce labor costs, and harness employee skills in more useful ways. Such businesses have shown a significant decrease in the complexity of the product development lifecycle which in turn increases product quality and performance.
Digitization has also served to make work more convenient for the employees by isolating productivity from location constraints. Employees can now work from home and new networking tools enable them to remain in contact with others from any location. This introduction of new, agile business models is rapidly replacing the rigid rules of years gone by.