Digital transformation is a process where digital technology is implemented in every area of an organization. It can create massive changes to how that business operates. Many companies are going through digital transformation as a way to increase profits and become more efficient.
Nine out of 10 businesses are now on the cloud. As more data is moved to it, much of the process involves replicating traditional services to work in a digital format. However, authentic digital transformation goes beyond that. It acts as a framework for technology that transforms data and services into important data that can improve all parts of an organization.
Instead of simply migrating information to the cloud, it’s possible to reimagine processes and systems that work together for better business intelligence. Digital transformation is essential today and offers a wide variety of benefits.
The Importance of Digital Transformation
Digital transformation is a method for changing the way an organization in any industry operates. Culture, systems, workflows, and processes are all evaluated throughout the process. The actual transformation affects all levels and departments of the business. It also compiles data from all areas to build an organization where people can work together more effectively.
Implementing advanced processing and workflow automation, such as machine learning and artificial intelligence, can let companies understand the full customer journey in a way that wasn’t possible in the past.
Lots of companies choose to go through digital transformation for cost-related reasons. For example, the process of moving data to a private, public, or hybrid cloud environment can lower overall operational costs. In addition, it frees up software and hardware costs while giving workers the chance to spend time on other projects.
Better Data Collection
Any business that is looking to succeed will be collecting all sorts of information about its customers. However, the largest benefit is the ability to optimize this data for analysis that can guide the direction of the business. Digital transformation builds a system that can gather the appropriate data and incorporate it for a higher level of business intelligence.
This means that all the units across a business can use raw data to create insights used at various touchpoints. When this is done, it creates a single view of the customer journey, finance, operations, production, and business opportunities.
When the top technology tools are working together, it’s possible to streamline the workflow. This process can improve productivity across the board. When manual tasks are automated and data is integrated across an organization, each worker is empowered to work more efficiently.
Improved Management of Resources
Digital transformation helps consolidate resources and information into many tools for business. Instead of using several separate databases and software solutions, all of the resources can be combined in a single place. This is huge when you consider that the average number of applications used in enterprise businesses is 900. This makes it challenging to get a consistent experience.
The use of digital transformation can integrate software, applications, and databases into one spot for all business intelligence needs. It isn’t a unit or a department; digital transformation encompasses all parts of a business and can offer better efficiency and innovation.
Digital transformation can create more agile organizations. Using the same techniques as software development, a business can optimize agility with digital transformation as a way to adopt continuous improvement strategies and improve speed-to-market. This creates an environment for quicker innovation and adaptation while creating a pathway towards improvement.
Improved Customer Insights
Having lots of information about customers isn’t very helpful if you aren’t sure how to unlock the insights it holds. When you know who your customers are and what they need, it frees you to create a customer-centric business strategy. The use of unstructured data, like social media metrics, and structured data, such as personal customer information, can create insights that help a business grow.
Data offers a way to enable strategies that include more agile, personalized, and relevant content.
Choosing to undergo digital transformation can offer better profitability and efficiency. The SAP Center for Business Insights and Oxford Economics offers data that show how these things work together in an organization:
- Leaders at companies that have finished digital transformation can expect 23% higher revenue growth than others.
- Of those same organizations, 85% indicate that they have increased their market share.
- 80% of these organizations have seen an increase in profits after digital transformation.
Improved Customer Experience
Nowadays, customers expect nothing but the best. If you can’t provide that, they tend to move on to a competitor. This is especially true when it comes to customer experience. A world of low prices, nearly endless choices, and quick delivery has made people expect all of those things. It’s a new situation for most businesses to focus on, but it’s extremely important.
Gartner reports that more than two-thirds of companies are competing largely on customer experience, which is likely to increase. Accenture notes that customer experience has become the primary driver of sustainable business growth and that even a point of increase in scores can create millions in annual growth.
Encourages Digital Culture
When every member of the team has the appropriate tools created for their specific environment, digital transformation can encourage a digital culture.
These tools can be used for an easy method of collaboration but also move the organization forward digitally. Having a digital culture is something that will become increasingly important in the future. It creates digital learning and upskilling of employees to take advantage of every benefit of digital transformation.
All in all, digital transformation changes the way companies today operate. It offers better data collection, an improved customer experience, and much more. These benefits offer businesses increase profits and better cost savings.
As time goes on, digital transformation will continue to happen at rapid speeds. When your company goes through digital transformation, it lets you better control your data, improve existing security, and collaborate within an environment of control and visibility.