Everything You Need To Know About the Importance of Digital Transformation in Business:
In this day and age, where technology has taken massive strides to make the world smaller and more accessible than before, your business needs to reciprocate and leverage the pool of opportunities it has found itself in today.
Digital transformation is not a thing of the future. It is an initiative that you and your business need to consider and made a part of your business strategy.
In this blog post, we are going to take a deep dive into understanding what a digital transformation means to your business and how important it can be for the coming years, especially 2020.
So, let’s cut to the chase and get started!
What is Digital Transformation?
Digital Transformation or DX is a term coined to refer to the successful technological advancements incorporated at companies in one way or the other. We are talking about a phenomenon that has triggered all major businesses around the world to consider leveraging the technological advantages for running regular processes or revamping the entire line of products and services.
But, it would be safe to argue that this phenomenon is something the world had already experienced back in the 1990s when technologies like electronic mail and Information Superhighway (Internet) took it by a storm.
Yes, the term is not new for businesses today. But, the meaning has changed drastically. Today, it has become synonymous with the complete digitization of products and services designed for the end-customer.
We have come a long way from automating the back-end systems and other computerized processes in the last several decades to successfully transforming the face of modern services like banking and entertainment through digital transformation.
The trend is on fire, and rightly so, businesses are looking to make digital transformation a top strategic priority for the coming years. But, digital transformation is not a plug and play tool. Although the concept is what the market demands, its implementation is easier said than done.
It is more than replacing the analog meter with a digital one. One of the basic examples is the cost of development itself. Large businesses that have been in the market for many years are facing deep-rooted problems like their products and processes are not structured to be relatable to the customer, they are slow and are marred by the burden of hierarchical decision-making.
What does that mean? Well, there are two conclusions you can make –
- The way most people work and think has not changed a bit to digest the new digital reality.
- Businesses fail to understand that digital transformation is more about changing the company culture to embed and prep it for modern technological advancements without causing any hiccups.
- It requires a change at all levels of an enterprise, which is something very hard to achieve, given how sensitive the present economy, market, and investors are today.
Top Digital Transformation Statistics You Should Know
What’s common between Numbers and Shakira’s hips?
They both don’t lie.
So, here are a few Digital Transformation statistics you should know to understand its importance in the modern-day market.
- As estimated by IDC, almost 40 percent of all the technology-related investments will be made towards making businesses digitally transformed. We are talking about investments worth in excess of $2 trillion!
- CIOs and CEOs are responsible to trigger a top-down digital transformation initiative and have a 28 percent and 23 percent say respectively in the whole business strategy.
- Percentage of companies who have devised a digital transformation strategy or are working on one – 70%. (zdnet.com)
- When it comes to the Internet of Things (IoT), 6 in 10 executives at a company believe that it will be crucial for their business success in the upcoming years.
- Percentage of people who believe that humans and AI working together is the future – 68%. (fujitsu.com)
- Percentage of people who consider the workforce an integral part of digital transformation strategy execution – 71%. (industryweek.com)
- As claimed by a survey conducted by PTC, the top benefits of digital transformation will be –
- Improving operational efficiency – 40%
- Faster time to market – 36%
- Meeting customer expectations – 35%
Well, not so much when you realize that less than 30 percent of an organization’s technology partners are digitally transformed or run any digital transformation initiative.
Why Digital Transformation is Important for Your Business?
Let’s discuss the benefits digital transformation brings to the table. So, here are the top reasons why digital transformation is essential for your business.
Customer Experience Transformation
The modern-day consumers are crazy for Latest X. Latest social media, latest apps, latest technology, or anything latest that brings value to their lives, they want it like now! They are obsessed with solutions that make lives easier for them. Once they realize that there is a possibility, they will make sure they get the answers fast.
That is where the whole digital thing steps in. Customer experience is central to the idea of digital transformation. Improving how the customer interacts with a product or a service is what businesses are looking for, and the cutting-edge technology gives them exactly that.
Today, more than 92% of the business leaders around the globe are working to develop highly successful digital transformation strategies with the objective of enhancing the overall customer experience.
Provides Data-based Insights
To create business strategies that bring in a positive ROI, you need to make arrangements for your team members to make highly informed decisions. How do you do that? You do that by going digital to allow them to track the critical performance metrics and enabling in-depth data analysis to maintain the balance of cost and revenue and create a sustainable business model.
Data-driven insights enable hyper-personalization and allow customers to provide real-time feedback. This is made possible as digital technologies enable coupling both structured and non-structured customer data retrieved from basic customer information and social media metrics, and help companies learn how to devise business and marketing strategies that map to all of that.
Encourages Inter-departmental Collaboration
Change can be dreadful in a work environment that has resisted it for decades. Since digital transformation is the ultimate destination, we highly recommend leaders at companies to foster unity throughout the workforce, from top-level executives to entry-level employees.
The whole idea of a digital transformation has to be communicated well within an organization. This is imperative if you are expecting the workforce from all departments to come together and embrace change.
A digital transformation can go a long way in breaking down social divides and paves the way for solid leadership. Not just that, it can be a moment in time, where the workforce becomes serious at updating their knowledge and intelligence when it comes to digital.
Makes Space for Innovation
Innovation is what drives the entire digital transformation revolution. There are many industries that keep innovation at a pedestal and realize the fact that businesses need to be agile to enable continuous improvement and development.
With digital, the scope of improvement is always there. There’s always something that can be tweaked to boost the ROI without having to increase the cost. The perpetual development in technology and rapid change occurring in the digital landscape is quickly pushing companies to adopt better solutions.
Here leadership is the key. People on top of the chain need to take responsibility to create a safe space for innovation.
Makes Learning and Skillset Updates A Necessity
When it comes to digital transformation, there is so much to learn. New technology will never stop going stratospheric, so the demand for people with the new and updated set of skills will increase. Here are a few skills people would have to learn to make space for them in the coming decade –
- Artificial Intelligence (AI)Augmented Reality (AR)
- Machine Learning
- Big Data Analytics
- Cloud Computing
- Growth Hacking
A recent report on talent in the workforce shows that almost 31% of the companies lack people with digital expertise. Making change is a challenge here. But, it’s essential if companies are looking to gain a competitive edge in the market.
Helps Adapt to the Digital Culture
Leaders at companies need to foster a working culture that revolves around modern digital technology. A robust digital workplace enhances the ability to stay on track and productive without feeling the heat of transformation.
Every successful digital transformation in the world was backed by leaders who were in favor of adopting and applying a company culture that took change as a positive signal. Well, there’s a reason why 90% of the top companies are all set to have a Chief Digital Officer (CDO) by 2020.
Why do Modern Businesses Fail at Digital Transformation?
That’s a legit question, isn’t it?
When digital transformation is so significant, why do businesses fail at getting it right? Let’s find out.
Not Realizing the Market Opportunities
This is one of the most important reasons companies fail to undergo a digital transformation. This awakening that the market needs businesses to go digital is what they are missing. Well, time will take its course and sooner or later, they will have to learn their lessons the hard way.
Are Not Close to Customers
As I mentioned earlier about how customer experience is central to the idea of digital transformation, businesses who know their ideal customer will win the race. Companies who have built a good relationship with their customers will have a vantage point in the quest to go digital. Being close to the customers you serve helps you understand their expectations and apply digital transformation to meet them.
Lack of Communication and Vision
Digital transformation doesn’t happen overnight. It requires months or even years of planning and execution. Here is the time it took these seven top companies to get digitally transformed –
- Best Buy – 7 years
- Target – 8 years
- Hasbro – 7 years
- Home Depot – 2 years
- Microsoft – 5 years
- Nike – 2 years
- Honeywell – 3 years
Since the process takes a lot of time, it is important for the leaders to communicate innovation initiatives with clarity. Setting the right expectations is necessary as well. This can be done by writing down the common vision and have everyone on the same page.
Fear of Change
Since digital is the way forward, there’s no point resisting the idea of digital transformation. Leaders need to come out of their comfort zone and evaluate the possibilities digital technology brings along. Will it prove to be beneficial for the business? What are the risks involved? These and other important questions need to be answered.
A huge challenge can be overcoming the fear of damaging their brand identity. The only logical argument that can be given to help leaders overcome this fear is that brands need to do things that make them relevant over time. What worked yesterday might not work tomorrow.
Lack of Internal Capabilities
This is so true with organizations that just don’t trust anything that was not made ‘in-house’. These old-school habits turn into growth-inhibiting ones, and no one would have a clue. Believe us, brands that didn’t realize digital transformation vanished in thin air. If you lack internal capabilities to take the digital transformation challenge, learn how to outsource or acquire or co-develop the solutions.
Failed at Incorporating a Culture Shift
By now, you know how important it is to have everyone on the same page in the quest to digitally transform a company. One of the biggest challenges with this can be a staff that just doesn’t change or accept the transformation.
Over to You
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