We’ve seen a lot of rapid changes in the way companies conduct their business in 2020. While some of these changes were expected to happen somewhere down the line, many of them happened long before planned out of necessity.
Whether it’s out of necessity for keeping up with a global pandemic or simply keeping up with the industry’s leading competition, it goes without saying that change is a vital part of any business model. Just imagine a company founded in 1890 refusing to make any changes along the way… obviously, it wouldn’t work out too well.
Keeping up with the times and the competition will always involve some level of change, and today this change is often referred to as digital transformation. This phrase seems to keep popping up, especially in the midst of a remote working world, and there are a lot of questions surrounding it.
What is Digital Transformation?
Since all business models are affected by change in the digital world differently, there’s no set definition for digital transformation. In general terms, though, digital transformation means incorporating modern digital technology into all sectors of a business.
This incorporation results in major changes to how the business operates as a whole, therefore leading to a “transformation” and positively impacting customers and clients as well as employees.
Even though the word transformation may suggest that this change is a dramatic metamorphosis that happens all at once, like a caterpillar transforming into a butterfly, this isn’t actually the case. Incorporating digital transformation into a business strategy is ongoing, and you should think of it as a marathon and not a sprint.
What Does Digital Transformation Mean for My Business?
Like we said, digital transformation looks different from company to company. The concept of “digital” is a loaded word with many different meanings depending on who you’re talking to.
The “transformation” part of it all remains the same - change will always be there - but the digital tools that companies are using to transform will look different across the board.
The fact of the matter is that we’re living in the digital age where business goals should 100% be focused on incorporating current and up-and-coming digital technologies. For a small business, that might mean migrating to the cloud, but for major enterprises, it could be improving an iOS mobile app for a better customer experience.
Why is Digital Transformation Important?
Staying stuck in the past is no way to accomplish business goals. If you fail to make moves to find digital transformation success, you won’t survive (much less thrive). This is a survival issue through-and-through, especially in a world where customer and client expectations are so much higher than in the past.
The Connection Between Digital and Financial Performance
Deloitte conducted a 2020 study on the link between digital maturity and financial performance and found that there’s a very strong correlation between the two. “Digitally mature companies enjoy a wide range of specific benefits arising from their digital transformations that include, but go well beyond, the bottom line. Many of these benefits, such as improved product quality and customer satisfaction, contribute to better financial performance,” says Deloitte.
Another study from IDC shows that “worldwide spending on the technologies and services that enable the digital transformation (DX) of business practices, products, and organizations is forecast to reach $2.3 trillion in 2023… DX spending is expected to steadily expand throughout the 2019-2023 forecast period, achieving a five-year compound annual growth rate of 17.1%.”
The claims made by Deloitte and the numbers reported by IDC are massive indicators of the importance of DX for every business, especially in terms of financial health. If you’re looking to grow and stay ahead of the competition in a digital-first world, digital transformation is the way to do it.
More Reasons Why Digital Transformation Is Vital
Aside from the general goal of surviving and hopefully thriving, there are a few more specific reasons why digital transformation is essential for business growth:
- Customers and clients expect on-demand service and immediate delivery of services, which is hard to achieve without updating digital technologies.
- Digital transformation helps employees to stay productive and work more effectively by moving away from manual processes and automating key functions.
- Cybersecurity is a top priority in the digital age, and DX provides the framework for handling more data while also keeping it safe and secure.
- DX is redesigning the way businesses partner and interact with each other, opening more doors for better communication and stronger partnerships.
The Framework For Successful Transformation
There’s a lot that goes into a successful digital transformation, but most research points to 5 main elements included in the DX framework:
- Customer (User) Experience
- Operational Functionality
- Leadership and Culture
- Workforce Facilitation
- Digital Technology Integration
When developing a DX strategy and implementing digital technologies in order to see change for the better, it’s important to hone in on each of these factors.
You should be asking yourself what digital tools and technologies can help to improve the customer experience, the overall operations, the organization’s leadership and culture, and workforce facilitation. The follow-up question would be how to smoothly integrate these digital technologies to keep things flowing.
Who Drives in Digital Transformation Across the Globe?
All eyes are on the US when it comes to watching digital transformation trends and how businesses are evolving. Many of the world’s largest and most successful corporations were born on American soil - think Walmart, Amazon, and Apple - so it’s really no surprise that the US is a country to watch when it comes to learning how to implement new digital technologies.
Start Your Digital Transformation in the Digital Age
Even if the concept of digital transformation is completely new to you, it’s not too late to get started. There are many ways to start integrating digital technology into everyday business operations, like moving to a cloud-based storage system or focusing on better use of AI and machine learning tools.
Don’t hesitate to reach out to us for more information on how to start your digital transformation in our increasingly digital age.