Digital transformation is a very popular term in today’s business world, but when it comes to the practicality of aiming towards digital transformation, what does it mean? This guide helps you understand more about digital transformation and the benefits it can bring to your company.
What is a Digital Transformation?
Digital transformation is, essentially, the implementation of digital technology in such a way that it improves the way your business is conducted. Many experts define it as a culture shift that trickles down to impact how you interact with your customers at the end of the day. Companies that are moving towards this digital transformation look to use digital technology at every level of their business, perhaps by creating new processes to improve operations and creating a digital customer experience to enhance their overall brand perception. Many seek to achieve a full transformation by eventually changing their company’s culture, encouraging innovation and healthy attitudes to change.
There is a difference between digital transformation and digitizing a business. When you digitize a business, you simply introduce a tool that can change how people work, like when modern point-of-sale systems replaced old cash registers. Digital transformation is far more far-reaching; it is about using tech to change how businesses operate.
Not all Digital Tools are Created Equally…
Anyone wishing to guide their business through a digital transformation needs to know that implementing digital technology is not good enough. You need to select the right tools for your business. Often, you’ll have several different tools that all promise similar things. You might opt for the most popular one, as you will have heard its name before, but that will simply be digitizing a process.
To achieve digital transformation, you need to select a tool that works hand-in-hand with your business’s KPI and culture/innovation goals. A good example from 2020 is in businesses having to digitize their communications. If you were simply digitizing comms, you would pick the most popular option, say, Slack. However, if you want to undertake digital transformation, you would compare comms tools, research Slack vs. Teams and other competitors before picking the solution that suits your company’s vision best.
What are the Benefits of Digital Transformation?
- Customer Experience
Tech tools like:
- Customer experience management systems
- Customer self-service
- Customer relationship management systems
Can all enhance your customer experience, leading to higher customer loyalty, lower churn, and a greater ease of doing business.
- Increased Profits
Companies that undergo digital transformation improve efficiency and profitability. Research has found that 80% of those companies report increased profits, and 85% report an increased market share. On average, leaders expect 23% higher revenue growth than competitors.
- Higher Productivity Rates
Having the right digital tools can streamline your processes and increase worker productivity, especially when they involve manual task automation.
- Resource Management
Digital transformation will make accessing digital resources far more intuitive as you bring together different resources and key databases into one place. This is a great way of increasing process innovation and efficiency across departments and teams.
- Improved Data Collection
In the modern world, data is king. Businesses realize this and are collecting loads of data ripe for analysis that can drive the business forward. When this is combined with a digital transformation strategy, this data will be more easily accessible at all business levels, allowing greater communication and innovation at the end of the day.