Why Are Businesses Experiencing A Digital Transformation?

Although it feels like centuries passed from the final stages of the digital revolution, the truth is
we’ve adopted and adapted to its fruits quite rapidly and seamlessly.
We take high-speed internet, hosting servers, apps and even personal computers for granted
because every single one of these became somewhat of household utilities.
In this day and age, businesses have to quickly adjust to new technology trends. It is no longer
a question of whether to incorporate those trends into your business practice, but rather which
and how many to opt for.
Before we ask ourselves why are businesses experiencing a digital transformation, first we have
to know what digital transformation truly is.
For a business to stay competitive, even one with a decades-long, successful track record, it
must undergo full-scale digital transformation. Sometimes that evolution happens without even
realizing, one process at the time, like the Ship of Theseus paradox.

What Is The Digital Transformation?

To put it simply, digital transformation is a process of change to all business aspects with the
goal of utilizing available digital technologies to their fullest. It doesn’t only entail modification of
traditional business methods but building a new model, oriented to the challenges of the digital
era.
It represents the technology integration in every functional business area. Digital business
transformation covers how the company functions from internal processes, organization,
company culture to customer experience and more.
Why is digital transformation important?
It’s not a simple update of outdated equipment, but rather an optimization of the business
strategy with the ultimate goal of increasing efficiency, revenue and reducing costs, as well as
promoting innovation, creativity and attention to developing frictionless client experiences.
So, why are businesses continuing the trend of going through digital transformation?
Basically, it’s a never-ending process, so the better question to ask is how this development
affects the business itself.

How Has Digital Transformation Impacted Businesses?

Digital transformation has become crucial for all types of ventures, both small businesses and
large corporations. Some find it difficult to adapt to new operating models and respond
adequately to customer needs and the competition.
The impact of digital transformation may vary but asides from its primary purpose of increased
revenue, decreased operating costs and improved customer satisfaction, it leads to lowered
fragmentation and optimized operations.
Digital transformation may have started at the IT office, however, it moved beyond as digital
applications and tools permeate every department, from accounting, finance to the
aforementioned operations.
Various organizations are investing in digital technologies at a lightning-fast pace to fuel major
operations including social media, analytical and cloud technologies and more. The global
investments in digital transformation are expected to exceed $7.8 trillion between pandemic
ridden 2020 and 2024!
But when most businesses already “evolved” and are on the path to becoming digital, what’s the
next step? If all have the advantage, no one truly does.
The unprecedented pace at which technology allows businesses to get adjusted to changes
also caused markets to move faster and it’s not showing signs of slowing down any time soon.

What Is Digital Transformation Strategy?

Basically, a digital transformation strategy can be pretty much summed up as a plan of action
describing how a business should reposition itself in the digital economy and environment.
Customer habits change often, the way the business operates should follow closely with
innovative technology.
Although the digital transformation strategy implies the importance of operational effectiveness,
it’s not solely focused on the end goal, but an ever-evolving plan of action that sets an
organization apart from its competitors.
The scope of digital transformation strategy involves managing and harnessing different
opportunities for prospective customers to interact with business:

- Digital devices, apps and platforms: The audience interacts with business websites
and mobile apps via smart devices, desktop computers, TVs and even gaming consoles.
Most of these interactions happen through browsers, apps, video and social media
platforms.
- Digital media: Businesses use different communication channels for reaching and
engaging audiences including advertising, email, PPC and social network ads.
- Digital data: The collected insight businesses collect from these interactions helps them
define their target audience and customizes their offer.
The idea that customers utilize technology to research and find products and/or services that
cater to their needs is not a new concept. However, digital transformation gives organizations
the opportunity to conduct business while simultaneously researching, collecting data and
ultimately reshaping the operating model.
This, in turn, reduces operating costs and increases profit, while nurturing customer satisfaction.
Customer satisfaction is key and here’s why...

Why Are Businesses Experiencing A Digital Transformation?

To meet customers’ needs
Simply answer would be - to better address consumer needs, but what does that mean though?
Creating a satisfactory consumer experience has become a top priority for most progressive
companies.
Thanks to the expansion and growing popularity of smart devices, companies have more data
on consumer experiences and needs than before.
Global spending on customer experience technology is projected to increase from $500 billion in
2019 to over $640 billion by 2022. Why?
For instance, 67% of consumers say that they would pay more for a great experience. The
modern customer demands convenience and servicing. Nurturing customer interaction improves
company reputations, customer retention and secures a healthy conversion rate.
Even if you have a superb product and/or service and years of experience behind it, customers
are rightfully expecting the digital solutions to match it, or they’ll switch to competitors who do.
Companies like Airbnb or Uber have become household names but it wasn’t so long ago we
marveled at their whopping growth. How did they manage that?
By offering their users a seamless experience through digital applications. These apps are
intuitive and easy to use and the services companies like these offer keep expanding, fueling
digital transformation further.

To reduce costs
Digital transformation consolidates processes and operations which leads to reduced expenses.
Investing in the right software improves efficiency by automating repetitive and manual tasks of
old, leaving your employees with more time to focus on actually valuable work. The
aforementioned digital apps, for example, cut the middle man between you and your customers.
The steady rise of artificial intelligence (AI) technology and machine learning open a slew of
possibilities: taking over the essential, mundane, time-consuming tasks, leaving no space for
human errors. They allow companies to save time and labor costs, which in turn, equals
revenue growth.
Why would you hire a dedicated marketer that handles tasks such as sending welcome email or
newsletters when marketing automation software does all that stuff for you? Stop squandering
your talent and focus it on managing high-level duties.

To become more competitive

Market competition was always a battlefield where product/service quality, customer satisfaction
and prices determined a clear winner. Now, companies are also competing through digital apps.
Just look at the arguably undisputed king of the retail – Amazon. To remain competitive
everyone in the industry had to adopt new digital strategies, becoming more innovative in the
process.
The popularity of Alexa and similar virtual assistants, as well as augmented reality technology,
incentivizes businesses to find new ways of helping their customers make better decisions
online.
Even Netflix who singlehandedly ended giants like Blockbuster with a revolutionary new
approach is facing increased competition from Hulu, HBO Go and the latest Disney+, streaming
platforms.
Each company is aiming to be more convenient to users and more accessible. In the end,
everybody benefits from the competition, the end-user the most.
Companies cannot hope to compete if they do not participate in digital transformation.

To drive benefits from data-based insights

Collecting and interpreting data gives digital companies invaluable insights on how to run and
grow the business. The algorithms and analytics allow companies to better answer to and
predict the customers’ needs in new ways.
This data helps you preplan and react appropriately to any change and reach new customers.

To drive efficiency, encourage collaboration and innovation

To better manage the workflow and drive efficiency, most companies no longer rely on emails or
physical meetings, especially in today’s, post-pandemic environment.
Instead, platforms like Slack, Microsoft Teams, Zoom and project management tools are used to
streamline communication and in-house collaboration.
We’re all aware of the frustration caused by searching that one specific email, digging through
inbox and even spam, often in vain.
Not to mention the difficulties when you have to inform a new team member about the project.
You can’t expect the added member to dive into previous threads and be on the same page as
the rest of the team.
Instead, businesses opt for using tools like Asana, Trello, ClickUp, Basecamp, Teamwork, etc.
Each of these project management tools is designed to streamline the process, guide your team
and help you track project statuses, set milestones and meet deadlines.
Internally, these platforms and tools allow the efficient sharing of ideas that can lead to new and
innovative solutions. Employees spend less time answering emails and more time creating
genuine value.
Of course, not everyone feels comfortable with digital transformation. The sheer number of tools
that supposedly make your work easy can easily overwhelm and confuse your employees.
Going digital means that every aspect of the business is transforming and everybody needs to
be on board, from the exec team to the lowest-ranking member. That is why it’s essential to
keep the workforce engaged and demonstrate how every single employee can and will benefit
from this process.

Why Is Digital Transformation Important: Takeaways

It’s never too late to start planning your digital transformation strategy. A good strategy allows
businesses to apply technologies aligned with their business goal, optimize their processes and
corporate culture.
In this day and age, how you do things is more important than what you do. Becoming digital is
just the first step.
The future of business is closely intertwined with technology and that trend is not likely to go
away, ever. Besides automation and streamlined processes, your business should strive to
become digital to:

- Meet customers’ needs

- Reduce costs
- Become more competitive
- Benefit from data-based insights
- Drive efficiency and innovation