Digital transformation is no more a buzzword in today’s business world. The growing trends of businesses around the world adapting to the latest digital technologies improve overall processes by improving customer experience (CX).
The data posted by Statista shows the worldwide investment in digital transformation has reached around 1.3 trillion USD in 2020. And the growth rate of businesses investing in digital transformation keeps on increasing in the study phase. Despite the global recession caused by the COVID-19 pandemic, the growth of digital transformation has considerably increased over the past year and a half. It has been projected that the investment in digital transformation will reach around 4.4 trillion USD by the end of 2023.
This article explores how businesses gain benefits through digital transformation in brief.
What is a Digital Transformation?
Before digging deep into the core topic, let’s brush up on some of the basics of digital transformation.
The digital transformation of a business is nothing but a process of embedding various tech stacks into the business operation to drive fundamental changes. Since every business is unique, the definition of digital transformation will differ according to the business. However, in essence, it changes how a business operates.
The processes that undergo digital transformation include systems, business operations, data flow, workflow, and work culture. It creates an impact on every aspect of a business and accumulates data in a centralized location, allowing businesses to utilize it more effectively. Also, it unlocks new values for workers, consumers, and business stakeholders.
The Importance of Digital Transformation for Business
The evolution of technology now not only improves the lives of people but has also created a significant positive impact on several business sectors. In general, the digital transformation of a business enables it to meet the growing expectations and demands of modern consumers. Therefore, this allows businesses to survive the heavy competition and focus on the future.
Apart from that, digital transformation empowers businesses to do better in today’s evolving economic and technological conditions. Before the COVID-19 pandemic, digital transformation was largely considered a tool for improving customer experience. But now things have changed, and it has become the centerpiece for improving operational efficiency and bringing innovative work processes across the business.
In simple words, digital transformation enhances the ability of businesses to stay ahead of the curve.
The Benefits of a Digital Transformation in Business
Many businesses consider digital transformation to be cost-related; they need to understand the benefits of digital transformation. Transforming businesses into digital is like an investment, and it will lower your operational costs by reducing hardware and software costs.
Apart from that, here are some key benefits businesses can get through digital transformation. Take a look.
1. Data Collection:
Knowing the importance of data, almost all businesses are now showing their interest in collecting customer data. When the gathered data is optimized rightfully, it will drive the business towards growth. Digital transformation enables businesses to collect essential data and incorporate it for business intelligence.
This helps businesses to generate an authentic single view of the customer journey and to deliver more personalized services and products to the target customers. In addition, digital transformation helps businesses evaluate the customer data that is collected, stored, analyzed, and shared. This enables businesses to have strong customer relationship management (CRM).
2. Resource Management:
Digital transformation is not about transforming a particular department or functional unit of a business; it encompasses all the aspects of a business. Moreover, it consolidates all the resources and data into a single location. With this, businesses can easily manage their resources efficiently and utilize them in a proper manner.
Almost every department of the business, including sales and marketing, can gain benefits through stronger resource management due to digital transformation. At the same time, businesses should give importance to security everywhere data flows.
3. Data-driven Customer Centric Approach:
When it comes to digital, data becomes the key. Customer data is the primary source for many businesses to unlock customer insights. Gathering, managing, and proper analysis of customer data will enable businesses to understand their customers and their specific needs.
With all the structured and unstructured customer data collected digitally, businesses can be able to create a successful business strategy with a customer-centric approach. This helps businesses in many ways to improve their growth.
4. Better Customer Experience
Apart from just offering benefits to an organization, digital transformation delivers a lot to customers. Customers who engage with digitally transformed businesses will experience a seamless and intuitive shopping journey. As the customer experience (CX) becomes the new battleground for businesses in today’s digital era, modern consumers are expecting more from brands.
To meet the consumer’s expectations, businesses offer full control over the data collected from their customers during email communication, handling digital products, and so on. This becomes possible only because of digital transformation, and it leads to increased customer value and privacy along with improved customer experience (CX).
5. Digital Culture With Collaboration:
Digital transformation offers the team members the right set of tools, a customized work environment, and a well-encouraged digital culture. The digital culture provided through digital transformation will improve collaboration among the team members. When compared with the previous work culture, employees will find a more easy and seamless way to collaborate with others under digital transformation.
The digital culture formed because of digital transformation is key for businesses to remain sustainable in today’s highly competitive market. The culture enforces team members to up-skill through digital learning.
6. Higher Revenue:
Without any secondary thoughts, one can easily point out the fact that digital transformation helps businesses achieve better efficiency and increase profitability. It has been proven through several studies conducted by economic experts around the world.
Here are the few key stats pointed out in the reports submitted by the SAP Center for Business Insights and Oxford Economics. Let’s take a look.
- There has been a significant increase in profits for the 80% of the businesses that have successfully undergone a digital transformation in the past.
- Around 85% of digitally transformed businesses’ market share has increased tremendously.
- According to data analytics, digitally transformed businesses will generate approximately 23% more revenue than their competitors.
7. Improved Agility and Productivity:
Just like in the software development world, digital transformation for business plays a crucial role in increasing business agility. It improves the product’s speed to market and allows businesses to quickly adopt Continuous Improvement (CI) strategies. This eventually leads businesses to be innovative and find the right pathway to improve.
Having the right digital tools for business operations will streamline the workflow. Also, tools play a vital role in introducing automation in the organization. This will lead to an increase in productivity. As automation eliminates the work burden of employees, they can focus on improving their work efficiency.
Wrapping It Up:
Digital transformation helps businesses to overcome the bottleneck situation in handling data and information. Based on the goals and priorities of the business, digital transformation allows businesses to adjust the workflows and streamlines the process to increase efficiency.
In final words, digital transformation will bring more value and strengthen your business’s position in the designated market. It makes business more efficient and drives towards growth. Additionally, Digital transformation enables businesses to free up time and resources by automating processes and digitizing data.
