For the past few years, enterprises across various industries and around the globe have been implementing strategies that help them automate manual workflows and streamline processes. The digital transformation trend is bigger than ever, and everyone is trying to get in on it. According to Gartner’s IT Roadmap for Digital Transformation, 91% of businesses are engaged in some form of digital initiative or the other. The implication of this is that businesses that want to stand out from their competitors must not just adopt digital initiatives; they have to accelerate digital transformation and achieve their digitalization goals as quickly as possible. In this article, we’ll explain why digital transformation is important and provide some practical strategies and tactics to follow in order to achieve the accelerated digital transformation of your own enterprise.
Why is digital transformation so relevant today?
Digital transformation involves incorporating digital technology into all areas of business in order to change how it is being operated, transform internal processes and deliver better value to customers. Bottlenecks and manual procedures are among the biggest hindrance to optimal service delivery in all industries, but particularly in the banking, retail, insurance, and manufacturing verticals. As technology continues to develop at a rapid pace, enterprises are starting to adopt new digital initiatives to get rid of these bottlenecks.
According to a 2022 study by Cornerstone Advisors, three-quarters of banks and credit unions have already launched a digital transformation initiative. The trend is the same for the insurance industry, where up to 25% of processes are expected to become automated by 2025, according to projections by Mckinsey.
The need to eliminate monotonous and slow processes is one of the key reasons that make digital transformation so relevant today. Adopters also believe it strengthens competitiveness, improves efficiency, and can help reduce operational costs while strengthening customer relationships.
Four benefits your organization gains from digital transformation
The digital transformation approach places technology at the core of the business strategy. This approach offers numerous benefits by boosting innovation across the organization and impacting customer experiences positively. Here are some of the key benefits your organization stands to gain from digital transformation:
1. Increased Innovation
Digital transformation empowers employees with digital tools that are tailored to their specific environment and unique needs. This adoption of digital culture across the organization drives innovation in the long run. With the right tools, employees can improve collaboration, make better data-driven decisions, automate manual tasks and optimize internal processes. Innovating digitally this way is necessary for businesses to remain sustainable in today’s highly competitive business ecosystem where everyone is looking to outdo one other technologically.
A major obstacle to competing with digital-first innovators is traditional IT architecture, which has evolved in a different world than the one we are living in now. Traditionally, architectures are product- and vendor-centric (think ERP, CRM, core banking systems)—each system comes with its own database, which creates information silos.
2. Better customer experience
The modern customer has high expectations from the businesses they interact with. They want personalized services and they want to get things done as quickly as possible. One of the biggest goals of digital transformation is to help businesses serve their customers better. Digital transformation starts and ends with customers; it involves using data to get an aggregated view of customer experience and expectations in order to deliver better services and drive sustainable business growth.
The customer experience (CX) expectations are at an all-time high. In a world fueled by data, we want the digital transformation (DX) transition to happen seamlessly. Businesses want to be able to tell what’s happening in real-time or provide near-second information to application developers.
Delivering the best customer experience means delivering low latency, fast application response times, and fast access to near-real-time data. Your firm’s reputation will depend largely on how responsive your data is, as long as fundamental security and accuracy concerns have been addressed.
3. Reduced costs
The Covid-19 pandemic accelerated digital transformation, resulting in companies accelerating technology initiatives and modifying processes dramatically. Manual processes are not just slow, they’re prone to errors and costly in the long run. A PTC survey found that 40% of executives consider improved operational efficiency as one of the top benefits of digital transformation. In turn, this leads to a reduction in operational costs in the long run.
When asked in a recent Harvard Business Review Analytic Services survey, “What were the primary business goals for your organization’s digital transformation efforts over the past 12 months?” 33% of executives placed ‘Increase productivity/efficiency’ as their top choice. Furthermore, when asked about the primary business goals over the next 12 months the number is even higher—37%.
4. Best results, minimum effort
Building and launching digital apps at unprecedented speeds, no matter what your company’s IT infrastructure is, is the fastest way to accelerate digital transformation.
Currently, many enterprises are relying on legacy systems that were not designed as Agile platforms that can easily scale up to meet the massive market demand for digital services.
Fortunately, achieving digital transformation does not necessarily mean a complete overhaul of one’s technology stack. Using a solution like Smart DIH powers digital transformation by decoupling the enterprise SoRs from its digital applications. With a microservices architecture and a unified API layer, Smart DIH helps accelerate innovations and the rapid building and introduction of new digital apps and services. This way, businesses can launch high-performing cloud-based digital services to power their digital transformation effort while still maintaining their legacy systems.
4 Steps you should follow to accelerate digital transformation
In today’s rapidly changing business landscape, businesses have to evolve and do so as quickly as possible to keep up with competition and changes in customer expectations. Several other external factors can also put pressure on businesses. The 2020 pandemic, for instance, accelerated digital transformation which was necessary to keep up with the harsh economic realities of a global lockdown. But initiating digital initiatives is not enough; you have to adapt to changes quickly by accelerating digital transformation. The following are some of the steps you need to take in order to achieve this.
To get anywhere fast, you must have a clear vision of where you’re headed. Many organizations simply jump on any trendy technology without considering its relevance or overall impact on their operational efficiency. This isn’t an efficient approach to digital transformation. A more effective way to scale your digitization efforts is to have a clear idea of what digital transformation means to your business, and what are the things you hope to achieve with it. This way, you can tailor your efforts towards achieving these goals. You will also find it easier to get a buy-in from top executives and coordinate staff to participate in digital transformation when you establish clear objectives from the very beginning.
Take into account the technology gap
As far as transforming your business digitally is concerned, the difference between where you are and where you want to be is your adoption of the right technology solutions and tools. Your digital transformation efforts should begin with you taking stock of your current technology stack, identifying gaps, and looking for new technologies that plug these gaps effectively. Part of the efforts to plug the IT gap also includes making vital decisions that help integrate your entire data architecture into a unified hub instead of having separate and disjointed technology stacks for each digital tool you use.
Customer experience is the key to digital transformation acceleration
At the very core of digital transformation is the need to curate an improved customer experience. In order to accelerate digital transformation, companies have to focus intently on understanding the needs and expectations of their customers. The adoption of new technology should always align with customer requirements and having current, up-to-date data is necessary for achieving this. Your digital transformation strategy must also be responsive and easily adaptable since customer expectations are prone to rapid changes.
Include your staff in the process, you’re going to need them
According to McKinsey, 70% of digital transformations fail due to resistance from employees. Adopting new technologies is never easy; if you want to achieve accelerated digital transformation, getting employees on board with your digital initiatives is important. Creating a culture that motivates employees to embrace digital change will speed up the adoption of new technology and help you achieve your digital transformation goals faster.
Digital transformation has become imperative for all businesses. In today’s business world, you either evolve digitally or get pushed out by competitors. This is why fast-tracking digital transformation is important. Businesses that are able to accelerate digital transformation stand to partake in the numerous benefits it offers and gain an edge over competitors. The following are some of the core topics we covered in this post:
- Why is digital transformation so relevant today?
- 4 Benefits your organization gains from digital transformation
- Increased innovation
- Better customer experience
- Reduced costs
- Best results, minimum effort
- 4 Steps you should follow to accelerate digital transformation
- Set an objective
- Take into account the technological gap
- Customer experience is the key to digital transformation acceleration
- Include your staff in the process, you’re going to need them