Digital technology is changing the face of business. And this change is outpacing the speed of transformation in most organizations.
But what exactly is digital transformation, and why is it important?
What is Digital Transformation?
Because digital transformation looks different for each company, it can be difficult to pinpoint a definition that applies to all. However, in the simplest terms, we define digital transformation as the process of integrating digital technology into all facets of a business.
Beyond that, digital transformation is a cultural shift that requires organizations to routinely challenge the status quo, experiment often, and be willing to take risks and fail. It sometimes even involves walking away from legacy processes in favor of newer practices that are still being fleshed out.
According to Paige O’Neill, CMO of Sitecore, “It’s important to keep in mind that digital transformation is not a single project or change, but an organization-wide restructure that extends to the people, the operations, and the technology.”
Why is Digital Transformation Important?
While every initiative will have its own set of goals and deliverables, the main purpose of any digital transformation is to streamline current processes. It also demands a close examination and reinvention of most areas within an organization, from supply chains and workflows to the skill sets of the workforce.
By taking advantage of things like artificial intelligence, cloud-based solutions, and machine learning, companies can improve the end-user experience in a way that wasn’t possible before.
Essentially, if you want to remain competitive in your industry, you must continually revisit everything you do—whether it’s the internal systems you use every day or the way you interact with your customers. If you aren’t evolving, then you’re falling behind.
Let the numbers speak for themselves:
- 55% of startups have already adopted a digital transformation strategy.
- 66% of CEOs say that digital transformation is at the center of their corporate strategy.
- 27% of executives view digital transformation as a matter of survival.
- Data-driven companies are23 times more likely to acquire more customers.
- The top industries for digital-first business strategies are services (95%), financial services (93%), and healthcare (92%).
Digital Transformation Impact on Business
Many companies are reluctant to invest in digital transformation without knowing if and how the investment will pay off in the long run. Though, when done right, digital transformation has been proven to deliver the following benefits to businesses big and small:
Enhanced Data Collection
Data is one of an organization’s most valuable assets and a key pillar for digital transformation. Unfortunately, many companies end up collecting mountains of data without ever leveraging it to optimize their strategies for better business results.
But when you go digital, it’s easier to analyze both structured and unstructured data to generate valuable customer insights. This information can help you better understand your target audience, assist with better decision-making, and pave the way to a higher ROI.
And because you’re using relevant, trusted data, you can grow your revenue by focusing on what matters instead of putting efforts into areas that are not important to your customers.
Improved Customer Experience
Consumer expectations are sky-high these days. People have grown accustomed to having numerous choices, lower prices, and personalized experiences. And mobile devices, apps, and automation have allowed them to get exactly what they want whenever they want it.
With millions of similar products on the market, distinguishing solely on prime offerings is not enough to make your brand stand out. That’s why customer experience has emerged as the new battleground for reaching true differentiation.
A digital-first mindset requires you to re-imagine how to connect the dots along the customer journey.
For sales teams, this means replacing cold calling with relationship-building. Since customers are already active on social media, sales reps can take the opportunity to showcase their expertise and reach out directly to them.
On the other hand, marketing teams can reduce spend on offline marketing activities like direct mail and television ads and instead focus their efforts on highly targeted messages.
Reduce Friction Between Departments
From C-level executives to entry-level employees, enacting a large-scale change across departments can be daunting.
Luckily, digital transformation makes it easy to access the right information at the right time. By exposing your workforce to the latest tools and technologies, you empower them to become more productive in their day-to-day tasks, which can go a long way in boosting their personal and professional growth. Plus, the work environment becomes less hierarchical and less siloed.
For example, digitizing your lead generation efforts improves communication and collaboration between sales and marketing teams. A sales team can acquire a list of leads, and your marketing team can then use those insights to make data-driven decisions about their customer base.
Further, by using technologies like CRM to track the behavioral patterns and feedback of existing clients, organizations can build more products that cater to their target audience and scale their businesses accordingly.
Companies that undergo digital transformation to enhance data collection, improve the customer experience, and reduce friction between departments, will almost certainly see an increase in their profit margins, too.
This isn’t surprising as efficient business operations and bigger profits almost always go hand-in-hand. Although digital transformation won’t automatically fulfill all your business goals, it will help you accomplish them with greater speed and efficiency. This, in turn, will likely result in more revenue.
Transform Your Business Today
With the countless advantages of digital transformation, it’s an important factor to consider when evaluating your company’s performance.
Not only does it strengthen your hold on your designated market, but it enables your organization to be more proactive and meet client demands faster.
When it’s time to take your business to the next level, you’ll need a technology partner that’s prepared to handle the transition. The 5P team has the experience, skills, and knowledge to successfully lead your business to digital transformation. Contact us to learn how we can help you today.