Why does every company need digital transformation?
In the modern era of technology, digital transformation is no longer a strange concept to businesses. From the top brands to startups, every company is changing and adapting to use the power of technology to distinguish and dominate. However, the question is: why do businesses need to perform a digital transformation? Let’s elucidate the above question in this article.
1. What is digital transformation?
Digital transformation does not imply simply replacing current processes or raising your social media profile and engagement. Digital change involves rethinking and developing business strategies while keeping the customer in mind.
Digital transformation is the process of integrating digital technologies into all areas of an enterprise, leveraging technologies to fundamentally change the way businesses operate, deliver value to customers, and accelerate business operations. Digital transformation is also a revolution in the culture of businesses, requiring them to constantly change, experiment with new things, and comfortably accept failures.
Digital transformation is often applied to change from a traditional business model to a digital one by applying new technologies such as big data, the Internet of Things, cloud computing, etc. While digital transformation is essential in businesses, it also plays an important role in other areas of society such as government, mass media, medicine, science, etc.
2. Why is digital transformation necessary for company growth?
Digital transformation enables businesses to keep pace with changing customer needs
It is obvious that digital transformation is a worldwide trend, but it also provides significant advantages for business management and growth.
2.1 Enhance competitive position in the market
The market is constantly changing, as are customer demands, and there is always a new group of consumers with new requirements and experiences.
Digital transformation is the answer for companies to attract and retain consumers more rapidly. Simultaneously, it boosts rivalry among competitors in the industry.
2.2 Drive revenue growth
For many businesses, digital transformation is a golden opportunity for revenue growth. Businesses will use new technologies to not only support effective corporate governance but also analyze customer insights effectively, optimize operating costs, improve labor efficiency, etc.
2.3 Reduce costs and improve operational efficiency
Optimizing employee performance is the shortest way for businesses to make great strides. Applying digital transformation helps businesses save maximum costs as well as human resources.
Cloud computing can handle data storage, which is managed by third-party companies. This allows your employees more time to concentrate on other initiatives and tasks that add more value to the company.
In general, by implementing digital change, companies can automate duties and processes that were previously time-consuming and manual. For example: customer data collection, financial management, work management, human resources, reporting, etc.
This will have a positive impact on productivity and improve employee satisfaction, as they will no longer have to perform monotonous tasks and will be able to make better use of their skills.
2.4 Enhance customer experience
Customers nowadays have a lot of choices. As a result, businesses not only provide goods and services, but also additional interactions and experiences that help satisfy consumers and support brand loyalty. For example, users are more likely to enjoy purchasing on e-commerce platforms that automatically make product suggestions based on their tastes. Customers demand personalization, and it cannot be achieved without going digital.
Digital technology can provide insights into your clients’ past data, such as interactions, hobbies, and levels of involvement.
Furthermore, they provide methods to quickly evaluate this data in order to personalize the customer experience in order to better meet the customer’s requirements and expectations.
2.5 Drive innovation
Digital technology supports creativity in businesses by providing new tools for the research, development, and testing of new products.
3. What are the key trends in business digital transformation in the coming years?
As digital continues to expand across industries, many businesses are attempting to implement it most effectively across the enterprise. Check out the key tech trends for 2023 and beyond:
- Use a zero-trust security model to reduce hacking and cyberattacks, helping to secure applications, identities, data, networks, and infrastructure.
- Use hyperautomation to execute business and IT processes through Robotic Process Automation, low-code/no-code, or Artificial intelligence (AI) and Machine Learning (ML).
- Use AI and ML to analyze consumer behavior, allows businesses to make better business decisions.
- Use Customer Relationship Management and Customer Data Platform to build better customer data.
- Use cloud and edge computing technology helps businesses store and manage data more efficiently, while providing an environment for new applications.
- IoT is becoming one of the key trends in business digital transformation, especially in the fields of manufacturing, logistics and smart agriculture.
4. Three things to consider before embarking on a digital change project
Due to fierce rivalry and a digitally-driven landscape, organizations must implement “digital transformation” initiatives in order to thrive.
However, launching a digital transformation project solely for the purpose of using new technologies will never result in the long-term advantages that they are intended to provide. In reality, investing in digital change without a comprehensive technology strategy can be detrimental to the business, resulting in increased inefficiencies and dissatisfaction.
Below are three issues to think about before embarking on a digital transformation:
- Businesses must carefully consider which technology to employ in order to provide more value and happiness to consumers. Do not go with the flow because it may not be appropriate for your company strategy.
- Enterprises must understand how to measure the benefits of digital transformation in order to make accurate evaluations and required modifications to increase revenue and profit.
- Cross-functional assistance and integration across all departments are required for successful digital transformation. To get an excellent ROI, companies must modify their complete internal structure and implement cutting-edge technology.
- Companies need to clearly define the goals and plans of your digital change project, and ensure that they align with your overall goals and strategy.
5. A step-by-step approach to developing your digital transformation roadmap
Developing a digital transformation roadmap can be a complex and daunting task
The road to digital transformation is a lengthy experience. The digital transformation roadmap is a strategy that enables you to create and manage your transformation initiative more effectively while also lowering the risk that typically comes with it.
We begin by analyzing your company’s present digital strategy and then progress on to defining your company’s future goals.
The roadmap provides you with an organized method to progress through several processes smoothly. It is built around three key phrases:
5.1 Define the vision
Management must define a transformation strategy, establish bold objectives, and motivate employees to imagine possibilities at this point. These are crucial to accomplishing true revolutionary change. Employees who are satisfied with their existing processes will see no reason to seek a full transformation rather than incremental improvement.
Goals may include:
- Customer satisfaction
- Sales increase
- Cost reduction
- Staff efficiency increase
Furthermore, the leadership should consider funding problems in order to allocate investment properly. There are two options for assisting companies in implementing a transformation plan:
- Form an internal transformational squad.
- Request guidance and implementation from a team of external specialists.
5.2 Ready for a change in culture
Digital transformation is critical to the cultural shift that every company must undergo over time. Employees’ daily duties will be affected as digital transformation strategies are implemented. Employees who are satisfied with their existing processes will see no reason to seek a full transformation rather than incremental improvement.
Business executives must prepare their organizations for these obstacles and cultural changes. The key to digital change is identifying the duties and projects that improve employee output, efficiency, and overall performance.
5.3 Plan out your technology
The third stage in this roadmap is to outline the technology approach firms intend to use. Technology is an important tool for accomplishing objectives.
Some things to consider when planning out your technology
The following are some typical tools required for digital transformation:
- Additive Manufacturing
- Augmented Reality.
- Machine Learning and Artificial Intelligence
- Cloud Computing
- Digital Twin
To obtain your overall objectives, one or more of these technologies would be required. Creating a clear roadmap with technology considerations is a vital part of achieving a digital business transformation strategy.
5.4 Look for partners and experts
Before searching for technology partners and strategies, you should ask yourself the following important questions:
- Will the system and vendor enable scaling?
- Do the partner and your company have a similar goal for digital transformation?
- Will they be open to providing you the necessary assistance for your long-term strategy?
- How does the collaboration work with your current technology?
- Do they have the necessary knowledge and technology for your particular application?
Without those considerations, you will easily meet partners with no professional knowledge, experience, or background in your application.
5.5 Launch and execute
At this point, it is critical to achieve early successes and highlight them in order to inspire staff members to achieve consistent outcomes. Senior management may want to find a spot where a substantial effect could be accomplished and risks managed.
It stands to reason for the company’s strongest talent to be concentrated on these initiatives as they play a crucial role in the organization’s future success. This is also the opportunity to focus on fostering digital culture across all roles and levels.
5.6 Institutionalize digital working
The success of these initiatives must now be replicated at scale for other applications and digital business strategies.
Managers must establish priorities and establish a framework for digital change. Businesses also need to understand where their capital and focus should be allocated to maximize profits. As profits begin to rise, the next stage of change, support, and excitement expands.
Measuring the influence of digital transformation projects is critical for understanding the efficacy of selected approaches and future planning.
6. A business example of technical transformation
Once you have a clear vision of what you want the transformation to accomplish, technology can help you innovate.
Finding out what organizations have done in their digital transformation path is always beneficial, and this information can be useful when brainstorming ideas. It also helps to learn from rivals’ and other organizations’ challenges, pitfalls, and triumphs in driving innovation.
IKEA is a company that has undergone a significant technological transformation
IKEA is one illustration of how digital transformation can transform a traditional company. IKEA is improving its customers’ purchasing experiences and lowering its expenses as an outcome of emerging technologies.
The business purchased TaskRabbit in 2017. This is a website where you can look for individuals to assist you with the assembly or delivery of IKEA furnishings to your residence if you are unable to complete these duties on your own.
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Furthermore, IKEA has used Augmented Reality in the IKEA Place application to help customers choose items and virtually “furnish” the flat before making in-store purchases.
The first evidence of digital transformation at LEGO was its 1997 entrance into the video game industry. Games have since become an essential component of company promotion, driving the sale of their blocks. The games are mostly free, which enhances the promotional value of the goods.
In addition, the business has developed a website to gather customer ideas for block sets. If the concept receives a great deal of interest, the business will consider releasing the kit. This will undoubtedly stimulate the ingenuity of brand followers while also instilling consumer loyalty.
This name has become one of the best instances of digital transformation and has greatly enhanced the visitor experience.
The MagicBand has been introduced in the parks, allowing visitors to make payments, handle bookings, and register their hotel accommodations. Each visitor is then recognized by MyMagic+ straps, which provide them with personalized experiences. The system functions by showing personalized interactive displays throughout the site.
Audi City, the company’s unique showroom idea, was presented in 2012. It ingratiates users with the complete inventory of the brand’s car models in micro-showrooms in city centers, where conventional showrooms with many displayed cars would be impossible to find.
Advanced vehicle configuration is feasible in stores via interactive screens that display the car in full size. You can use your own tablets to look inside the vehicle, watch its movement, and hear the actual engine sound.
Moreover, Audi City hosts nighttime discussion sessions and exhibitions, which strengthen the brand’s positioning even further.
Given the preceding examples of digital transformation, it is obvious that an effective transformation is not only feasible but also profitable. Of course, understanding market requirements, innovation, and a methodical strategy to apply new solutions are all required.
However, if these circumstances are met, it is very possible that businesses will take the leap after digital transformation.
7. Should hire an outsourcing company for digital transformation for your business?
Digital transformation is a time-consuming and labor-intensive process that involves changing the way a business operates and its mindset. To sufficiently perfect digital transformation for a company, the business itself must have a team with excellent technological understanding as well as experience in digital transformation. Because of these complicated requirements, most companies opt to hire a digital development or consulting firm.
These agencies have professionals with a wide range of business and technology expertise who can help with the development and implementation of a digital plan. These outstanding brands will assist these executives in their efforts to utilize digital technologies that allow innovation in their entire company or aspects of their business and working model. These service providers often work very closely with the top-level executives in the business, to be able to come up with the most suitable strategies.
8. The Advantages of Outsourcing Digital Transformation
The following are some of the benefits of employing a digital transformation outsourcing partner:
- Outsourcing digital change ensures that you have enough resources to accomplish the project’s objectives.
- By outsourcing, you can be assured that you will not need to make a significant early financial expenditure.
- Furthermore, experienced outsourcing businesses already protect your company from cybercrime using the most advanced security procedures.
- Hiring a consultancy allows companies to gain access to new technology platforms without worrying about digital transformation expertise.
- Experienced experts will mitigate the risks of digital change that are unfamiliar to companies.
- Businesses do not need to be concerned about expenses because the agency will handle all of the consuming aspects of software and hardware.
Undoubtedly, letting outsourcing organizations transform digitally helps to do it in the most timely and cost-effective manner while eliminating operational costs. This is why you should outsource digital transformation.
9. How do you choose the best digital transition outsourcing firm?
If you are looking for a digital transformation expert, keep the following in mind:
- Determine the company objective and culture in order to discover the best consulting firm for both.
- Define your reasonable price range and select the most appropriate service within that range.
- Investigate the business that will provide services for you such as:
- white papers they have published
- leadership articles
- reviews from customers
- Look for businesses with simple and easy-to-communicate working procedures, which will make it easier for you to collaborate.
- Interview the consultants directly and ask about their experience.
Are you ready for your own digital transformation but still confused about how to begin your tech change journey? Please contact KVY Tech for further advice.
We are a leading web and mobile app development firm with rich experience in building significant digital success for businesses. With practicable digital solutions, we have assisted many companies and individual entrepreneurs in creating key client encounters.
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