Businesses that have effectively embraced digital transformation – in whatever way that works for them – are rapidly outpacing those who have been laggards when it comes to adopting digital technology. So what are the benefits of digital transformation and why should you be interested?
Digital Transformation in a Nutshell
Digital transformation is the term used to describe the use of digital technology to fundamentally reshape business operations in ways that optimize costs, improve the customer experience, create new revenue opportunities, and more.
All industries are undergoing digitization, and companies doing the best job of digitally transforming by adopting technologies such as cloud, artificial intelligence (AI), and big data are creating major competitive advantages. These companies are redefining their business processes to be more efficient, automating tasks, improving communication, and providing new products and services that were previously impossible to offer.
9 Benefits of Digital Transformation Every Business Can Use
With so many opportunities being provided by digital technologies, many businesses and IT leaders are wondering if they’re missing out on any of the key benefits digital transformation can bring.
With that in mind, let’s take a look at some of the opportunities that make digital transformation so important.
1. One of the Biggest Benefits of Digitalization: Improved Data Usage
Most businesses are sitting on a treasure trove of data that they generate simply as a by-product of them conducting their day-to-day operations. Putting that data to use can be challenging, but going to the effort of bringing meaning to it can open the door to business intelligence, and performance and service optimization.
Becoming ‘data literate’ is a journey that requires businesses to first collect raw data and then create the means to analyze and present that data in a way that provides insights that support and drive decision-making.
Data alone can bring immense digitization benefits across operations, finance, marketing and beyond.
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2. Garnering Data-Driven Customer Insights
We’ve already touched on how data can help you to transform the efficiency and performance of the business, but using data to understand and act on customer behavior deserves a special mention of its own.
Businesses that have good access to customer insights are in a much stronger position to provide the products and customer service that will meet their demands.
It will also help them to see where customers might, for example, be abandoning the purchase process because of a pain point on your ecommerce site, or which marketing techniques are the most effective at driving sales.
3. Impactful Digital Transformation Enhances Customer Experience
Alongside optimizing the customer journey, digital transformation can also be the key driver in improving the experience that customers have when interacting with your brand.
The emergence of delightful-to-use digital tools, such as Uber, has sent customer expectations through the roof when it comes to delivering a digital experience.
In fact, many brands today are competing almost solely on the quality of their customer experience, especially those that are digital-first and service-based. Customers like it when digital services are easy to use, powerful and privacy-oriented, so you should consider making customer experience enhancements a key part of your digital transformation strategy.
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4. Encourage Digital Culture in Your Organization
Digital natives now make up a large proportion of both the workforce and consumer landscape, and this is shaping culture both in the outside world and within companies.
Companies that embrace digital transformation are more likely to attract the most talented staff and create synergies among teams that lead to digital innovation.
A digital-first culture can be nurtured by providing the right tools, empowering employees to experiment with digital technologies, and providing ample training opportunities and communications capabilities.
5. Increase Agility, Meet Demands Real-Time
Legacy systems allowed companies to grow and become global, but this expansion came at great cost to IT flexibility and footprint.
With the rise of cloud computing, even the largest companies have been able to dramatically reduce their physical, static IT infrastructure and create environments that are much more agile to the real-time demands on the business.
Take ecommerce as an example; there may be traffic spikes during the holiday season, meaning the company needs to scale up bandwidth, which can be done at the click of a button. Bandwidth can be scaled down during quieter periods to save money.
6. Improve Productivity and How the Business Operates Day-to-Day
Digital transformation presents opportunities to reduce manual workloads and enhance productivity by automating processes or at least reducing the amount of time they take to complete.
Using the example of financial reporting, many companies have used digital tools to reduce the time it takes to complete their quarter-end reports from weeks to mere hours. That translates to a significant cost saving and frees up finance staff to work on more strategic tasks.
7. Better Customer Targeting
You might recall an occasion when you searched for something and then had your device feed ads to you that were related to that search. These ads are being served up by a company that has understood the value of monitoring customer behavior to optimize how it targets customers with its marketing efforts.
With an increasing amount of commerce conducted online, digital transformation of customer targeting is crucial to ensure you are being seen before your competitors.
People are spending more time than ever on social media and using self-service tools on the web to get things done. Digital transformation means understanding and adapting to their behavior and desires.
8. Digital Technology Benefits the Bottom Line
It should go without saying to any accomplished business leader that improving efficiency, enhancing the customer experience, and becoming more productive will enable your company to boost its bottom line. But it’s worth repeating anyway.
An SAP Center for Business Insights and Oxford Economics report found that 80% of organizations that have completed digital transformation increased profitability and 85% increased their market share. The key is to make sure your leadership peers understand the return on investment that digital transformation brings to the business, so they will be more likely to support future digital transformation initiatives.
9. Unlock New Business Opportunities
Digital transformation might have killed off some of your trusty old revenue streams, but it also presents imaginative business minds with lucrative new opportunities – if they know how to capitalize on them.
Take the example of Netflix. The company started out as a DVD rental service and looked to be a dying brand when the format became outdated. It took everyone by surprise by pivoting to become a streaming service and setting the standard in this space – a classic digital transformation story. It took other companies years to catch up.
If you don’t think up new ways to do business using digital technology, your competitors will. Even if your product and service portfolio is strong, always be on the lookout for how emerging technologies can make it even stronger.
Digital Transformation Benefits? More Like Business Benefits
Netsurit has been around the block when it comes to helping businesses realize their full potential guiding them through everything digital transformation requires. Get in touch today to learn more about the digital opportunities you might be missing, and how you can start on the path to embracing digital transformation.