In the current market, it’s no longer a question of whether to incorporate new technologies into your business but rather which ones and how many. For a company to stay truly competitive – even one that has been successful for decades – it might not be enough to simply patch a traditional approach with a piece of digital bandaid. Instead of implementing small changes, current market leaders have undergone full-scale digital transformations. What drives them and how do they benefit from that approach?
Digital transformation is a process of profound change to all aspects of a business with the goal of making the best use of available digital technologies. It doesn’t only mean a modification of traditional methods but rather building a new model designed for meeting the challenges of the digital era. Digital business transformation covers and influences many different aspects of how the company functions: internal processes, organizational culture, customer experience, and more. In other words, it’s not only about updating your technology. A complete digital transformation means changing your business strategy as well as making sure your whole team is onboard with the changes.
When done right, digital transformation improves customer experience, increases revenue, bolsters security, and reduces costs.
Digital transformation helps companies make the best use of big data. It can also apply cloud computing, machine learning, and augmented reality into the company's processes. All these innovative technologies should only be used as integrated parts of a business strategy, rather than being goals in and of themselves. So before you jump on the DT bandwagon, it’s crucial to know what measurable results it can bring for your business. The first step is to consider what business outcomes you want to achieve and how digital transformation can help.
Besides competing on products and prices, companies are also competing through digital applications and customer experience. In many industries, the disruptors are becoming the unquestionable market leaders – the most obvious example being the retail industry and Amazon.
To avoid falling behind, others need to adopt digital strategies as well, which might lead them to becoming more innovative in the process. Irrespective of the industry, the best businesses offer their customers mobile apps that facilitate successful user journeys.
Other digital innovations take things a step further. One example is Augmented Reality, which is being creatively used in retail. The virtual fitting technology enables companies like Macy’s and Walmart to help their customers make better decisions online, which can boost sales and reduce costs associated with returns.
Even industry leaders who have already implemented digital strategies must not stay complacent – they need to steadily integrate new digital tools to remain competitive.
Digital transformation consolidates processes and operations, offering opportunities for significant cost reductions.
Investing in the right software can improve efficiency: automating certain repetitive tasks will free your employees up to do more valuable work. Additionally, there will be no need to hire somebody to perform the most mundane tasks.
Artificial Intelligence can be deployed to take over projects that used to be complicated, time-consuming and prone to human error, such as controlling stock and delivering products on time. After the initial investment, AI allows companies to save significantly on time and labor costs and see their revenues grow.
According to a survey by Adobe and Econsultancy, “companies that prioritized and effectively managed customer experience were three times more likely than their peers to have significantly exceeded their top business goals in 2019.”
Customer experience is having an ever-greater influence on consumer decisions. It drives as much as two-thirds of customer loyalty, outperforming price and brand combined.
Even if you have a great product and years of experience delivering it, customers are expecting the digital solutions to match it. Otherwise, they can easily switch to your competitors.
A major aspect of digital transformation that’s often overlooked is its impact on the organization and its culture.
At its best, digital transformation not only implements new digital tools, but unleashes human potential. When employees, thanks to new communication tools, can spend less time answering emails, they can spend more of their time creating value. When some of their tasks are automated, they can collaborate more with each other and across the departments.
Digital transformation also means that the company will need to embrace change as the default state, and that should include everyone from the leadership all the way through to the lowest-ranking employees being onboard. Going digital means the business is transforming, its employees upskilling and open to constant change.
Of course, not everyone is comfortable with change; in fact, it can be quite frightening. People might feel confused or overwhelmed by the transformation. That’s why it’s crucial to keep the workforce engaged and demonstrate that everybody can benefit from this process. If the management has a clear vision for the digital future of the company, they should be able to communicate it to their workforce. The business that goes through an effective digital transformation doesn’t leave people behind – it lifts them up and guides them through learning new skills for the digital world.
Keller-Williams, the largest real estate franchise in the world, provides a good example of how this can be done. When transforming from a traditional business, they made significant investments in their own software, cloud, and AI. They also invited their real estate agents to participate in building the software, starting KW Labs.
Seeing great response and engagement from the agents, they soon expanded this approach company-wide. Now, the whole company is fully agile, and experimenting became their default mode. This way, they keep their speed to market impressively high and stay innovative, even when compared to players that are smaller and newer to the market.
Thanks to algorithms and augmented analytics, companies have a chance to get ahead of the competition. From managing inventory and marketing to answering and predicting the customers’ needs in ways that were not possible before, collecting and interpreting data gives the digital company valuable insights on how to run and grow the business.
Data also helps to react adequately to changes in the existing customer base and reaching new customers. A relevant data analysis can increase sales and bring costs down at the same time.
For example, in the healthcare industry, monitoring patients’ health data has opened a whole new world of possibilities. Wearables and mobile apps eliminate tedious journaling and prone-to-error self-reporting. They increase patients’ engagement by measuring physical activity and vitals and presenting these data in a user-friendly way. Now, the patient is able to not only track their own health better but also, with the help of algorithms, they can see what the results mean and improve their habits. As a result, healthcare providers are getting new ways of reacting to possible issues and doing so much earlier than before. With the help of AI, they can now discover patterns and predict potential health issues, allowing for timely intervention.
With the results in mind, you can start planning your digital transformation strategy. A good digital transformation strategy enables the company to apply technologies aligned with their business goals and opens up new opportunities in the future.
At Netguru, an experienced digital business agency, we know the process first-hand, having implemented it in companies both large and small. We’ll find the best way your company can go through digital transformation to get the desired results. If you’d like to find out more, get in touch and we’ll answer all your questions.