Why Digital Transformation is Essential for Business Growth
The term “digital transformation” refers to updating business operations via the integration of digital technology into all the different functions within an organization.
Bearing in mind that the word “digital” can mean different things to different people/organizations, you must make sure you and your team are on the same page about the changes that will be taking place.
International business leaders recommend that you consider why you are making these changes and what you want to achieve by them (e.g., improving the customer experience or increasing employee productivity), then use those objectives to tailor your processes.
You can learn more about the business digitalization process from Tatjana Wiest, a Senior Platform Manager at Vaillant, who outlined her role to students at the EU Business School earlier this year. Find the full summary of her lecture here, or continue reading to find out how digital transformation can lead to significant business growth.
1. Software integration
Digital transformation can help you centralize computer-based resources so that instead of storing information on 900 separate applications—and then having to search them all to find anything—you have one master database containing all of your business intelligence.
This will enable your team to work more effectively and improve the consistency of your customer experience.
2. Enhances data collection
Forget oil; data is now the world’s most valuable commodity! Businesses can use it to monitor the consumer lifecycle, tracking engagement rates and spending habits, and so much more. However, a 2019 study by Splunk revealed that most data collected worldwide (55%) goes unused. If you do not analyze the data you collect, you could be missing out on vital insights that tell you how, when, and where your customers shop.
Make sure you set up your centralized CRM or other databases not only to gather and store this information, but also to analyze it. In this way, digital transformation can help you to get to know your customers better. The more you understand your target market, the more you will be able to appeal to them (e.g., through targeted ads on social media), which will necessarily grow your business in terms of both customer base and profits.
3. Improves productivity
Employers are always looking for ways to increase productivity within their organizations. This is especially true now, as many companies are looking to make a permanent transition from on-site to remote or hybrid working solutions. Not only does technology play a significant role in connecting dispersed teams, but automating your processes will also improve the efficiency of your staff, wherever they are working from.
Integrating your data and streamlining manual processes will save time across the board, allowing teams to achieve more in one day than before.
4. Speeds up communication
Private messaging services like WhatsApp and Facebook Messenger are now used more regularly than the social media platforms they originated from. This has led to an expectation of on-demand services and instant responses or resolutions from companies by consumers.
In order to keep up with the needs of a customer base whose attention span is getting collectively shorter, you can utilize agile digital transformation technologies to connect with new potential customers through instant messaging applications.
5. Promotes innovation
Technology is constantly changing and being updated by engineers. However, the fact is, you still need today’s tech to create the next viral app or piece of software that might revolutionize your industry. In this way, by investing in digital transformation, you can create a forward-facing culture within your organization – and a workforce that’s keen to explore what you might be able to achieve in the future.
Look at traditional banks, like HSBC. After losing out to apps like Apple Pay, PayPal, and Google Wallet, they established global innovation centers specifically aimed at developing superior mobile banking services to reconnect with lost customers.
6. Strengthens security
As we have seen, data is a valuable commodity in today’s world—which also makes it highly vulnerable to exploitation. Therefore, data security is a major concern for both consumers and businesses, who stand to lose custom and profits if there is a breach in their systems. Moreover, it has recently become even more crucial to maintain because people have been working from home on personal networks, which may not be protected.
Digital transformation can help protect your information by installing high-tech security measures on any device used for company purposes. But don’t just rely on the software itself; a close working relationship with technology partners is key to keeping data secure because they can offer you insights on updates and new applications as they become available.
7. Consolidates business partnerships
If your organization works with external suppliers, distributors, freelancers, or consultants, you can streamline the process by taking some of the admin online. For example, documents like contracts, order sheets, or invoices need to be created and kept for your records, but instead of waiting for the mail to deliver them or relying on people to access a printer and a scanner, eSignatures can speed up compliance.
By implementing changes such as this, you will save time and resources (which equate to profit) and make your processes more accessible to current and potential business partners.
8. Generates increased profits
Companies that “go digital” are more efficient and thus more profitable. For example, the SAP Digital Transformation Executive study (2017) shows that 80% of organizations that have undergone digital transformation report increased profits, and 85% of respondents said they had increased their market share by digitizing their processes.
An increase in profit will mean you have more money to put back into digital transformation in the future, enabling your business to continue profiting from the benefits of digital transformation mentioned in this article.
