Today, digital transformation is no longer just a technology “buzzword”; it is fast emerging as a necessity for businesses to excel and stay ahead of their competition. In a fast-changing business environment, digital technology and innovation are the only ways to keep up with rapid changes.
The latest industry statistics support the increasing demand for digital transformation across business domains. According to the IDC, by 2023, business spending on tools and technologies that facilitate digital transformation, will increase to $2.3 trillion, which is more than 50% of all IT spending budget. As Jeff Bezos of Amazon puts it explicitly, “In today’s era of volatility, there is no other way but to re-invent.”
Why is digital transformation so important for today’s businesses and what are its benefits? Let find out:
Importance and Benefits of Digital Transformation in Business
Be it through efficient cloud technology or automation, digital transformation can impact any business at multiple touchpoints including business management, business processes, or even organizational culture. Here are 5 major benefits of digital transformation for business enterprises:
According to a McKinsey report, technology-driven B2B companies reported a 10-20% reduction in operational costs just by improving their customer experience through digital transformation. Similarly, manufacturing companies can utilize digital ERP technologies to achieve better insights into their inventory needs and raw materials, thus optimizing their acquisition costs. As an example of successful digital transformation, businesses are saving up-front and long-term costs by moving from in-house IT infrastructure to cloud-powered systems. Adding to the benefits, cloud platforms are easier to maintain and can free up valuable business resources.
An improved customer experience (CX)
Customer data and analytics can be crucial in unlocking business potential and enhancing the customer experience (CX). Digital transformation enables a business to be customer-centric and designs the product or service offerings based on customer insights extracted from social media and other digital platforms.
According to McKinsey, business focus on digital transformation and CX can improve customer satisfaction by 20-30%, translating to a 20-50% improvement in return on investment. Google Cloud VP, Amit Zavery says, “Digital transformation is less of a technology project, and more of a state of agility – always ready to evolve towards whatever the customer wants next.”
Apart from providing improved customer service, digital technologies can enable a personalized customer approach based on individual needs and interests, which can together translate to higher customer engagement, brand loyalty, and revenue growth.
Enhanced team collaboration
Can digital transformation create a progressive culture in your organization? Yes, absolutely. Digital technologies are not just for your customers. They are for your employees too. George Westerman from MIT sums it up perfectly with his words “digital transformation requires changes to processes and thinking – that span your internal organizational silos.” A complete digital strategy can boost team collaboration and improve employee engagement and productivity. Team collaboration can break down functional silos within the organization and ensure that various departments work together to achieve common business objectives.
Among the top benefits, business executives have reported that digital transformation helps in improving operational efficiency by 40% and reducing the time to market by 36%.
With increase in remote working systems, employee-centric functions such as upskilling, training and team collaboration are now being powered by a host of digital tools, ushering in an efficient digital culture within organizations. On its part, Stralynn works towards its customer’s success by facilitating new skill sets within its teams.
Growth in business profits and revenues
Futurist Jim Carroll commented, “With fast ideas comes faster innovation, 60% of Apple’s revenues comes from products that did not exist 4 years back.” According to the SAP Digital Transformation Executive Study, 80% of business enterprises that adopted digital transformation have increased their profits while 85% of them have increased their market share and revenues. A Deloitte report states that 45% of companies have recorded higher revenues after investing in digital technologies.
Overall, digital transformation can highlight flaws in the present business processes and improve transparency—a key to process changes. Plus, in an interview conducted by Harvard Business Review, 84% of business executives agreed that digital technologies can create better market opportunities. These favourable factors, along with reduced costs and operational efficiency, help businesses achieve better profits and revenues. On its part, Stralynn provides IT consulting services that ensures a 40% increase in efficiency for its global clients – along with a 200% growth forecast.
Seamless integration across business systems
The growing number of enterprise systems and software tools can make system integration a difficult task for any business. For example, Norway-based companies reported an 80% increase in the use of digital tools in 2020.
A consistent digital transformation strategy can help bring together all IT resources, including its applications, hardware infrastructure, and enterprise solutions, to form a central repository that can be used to build business intelligence. On a similar note, business applications such as company finance, marketing, and customer service are now easily being connected and integrated through digital technologies.
Digital transformation can synchronize the transfer of vital information between different business systems, thus eliminating errors and enabling faster decision-making. Be it through competency in Salesforce or SAP, Stralynn provides its clients a competitive advantage with its smooth integration process.
Digital transformation has become essential in today’s business environment. It is redefining how companies conduct their business. We have looked at just five benefits of adopting digital transformation in business enterprises, but there are plenty more to gain.