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The most commonly used ones are digitization, digitalization, and digital transformation. Across industries, the Covid-19 pandemic forced many companies to accelerate their digital transformations to compete and even survive. By transforming your business digitally, you’ll be able to meet your potential customers where they are and how they would like to be reached. For SMEs just getting started, it is totally a waste of time to set up business processes with the hope to transform later. Finding and sharing information became much easier once it had been digitized, but the ways in which businesses used their new digital records largely mimicked the old analog methods. Computer operating systems were even designed around icons of file folders to feel familiar and less intimidating to new users.

Why businesses need digital transformation

This allows for faster innovation and adaptation while providing a pathway to improvement. As you evaluate the customer journey as part of your digital transformation, consider how you can give your clients greater autonomy over their own data — using data privacy as a business differentiator. Consumers are increasingly aware of, and concerned about, how their data is collected and used.

Why Digital Transformation is More Important Today Than Ever Before

Digital transformation can significantly improve a business’s efficiency by automating manual processes, reducing errors and improving productivity. For example, adopting cloud-based solutions can enable employees to access data and collaborate more efficiently from anywhere in the world. If you are a business owner of a huge e-commerce store, you should think about where your clients are from and choose cloud storage in a particular region to reduce latency time. As customer expectations and the pace of change increase, it’s necessary to introduce new ways of working coupled with modern engineering capabilities. Most companies are making suboptimal decisions about how to direct their tech investments.

  • With cost in mind, companies are using digital to improve asset efficiency, support worker productivity, reduce overhead and production costs, and streamline after-market service.
  • The digital age has brought many opportunities and innovations, transforming how businesses interact with customers, improving efficiency, and increasing profits.
  • We will explore the critical components of digital transformation – from strategy to technology.
  • SaaS solutions are more easily accessible by distributed and remote teams, enable real-time collaboration, and reduce friction between departments.
  • What’s more, these initiatives often rely on comprehensive upheavals to business and operating models.
  • An additional layer of this shift is in creating accessible interfaces to efficiently operate new digital tools on all levels, both customer-facing and internal ones.
  • Cloud security has overcome this psychological barrier and finally has been acknowledged as the approach more secure than on-premise data storage in addition to its high efficiency, streamlined updates, and scalability.

These baseline benefits often pave the way for digital transformation to do more within a business, be more sustainable, more data-driven, more compliant – so we’ll discuss those as well. The transformation of systems, processes, workflow, and culture affects all levels of an organization and brings together the company as a whole. By taking advantage of automation and advanced processing, companies can work more efficiently and accurately. It frees up hardware and software costs while freeing up team members to work on other projects. Digital transformation is the process of integrating digital technologies into all operational areas in a business. It usually includes the shift from traditional operating methods to a cloud platform.

What are the four main areas of digital transformation?

In conclusion, it’s time you explore the intersection of your business with engaging and meaningful customer experiences augmented with digital transformation and innovation. To start the digital transformation process, evaluating your organization’s current status is essential. This includes analyzing your website, social media accounts, and customer relationship management system.

Companies should reimagine the customer journey by building new experiences that meet their demands, focusing on relationships. Investing in technology that enhances business relationships can create new opportunities to create stronger bonds with customers. “Transformation,” Genpact’s Srivastava noted, “provides this new digital backbone to deliver this new business functionality that allows you to grow your business, your revenue going forward.” One of the biggest digital transformation benefits is shortened product lifecycles, experts said. That’s particularly important in industries where development costs are particularly high.

Encourages an Environment of Employee Excellence

Domain Transformation – This area offers a great opportunity to move into a new domain or area that a business may not have explored before by acquiring new technologies. Think about Google and its many business offshoots such as Google Nest, an Internet of Things product that provides thermostats and smoke detectors in the home. If you type that question into Google, you’ll get billions of results. There may be a misconception that digital transformation is just about technology, but that’s not the case. In my next blog, I’ll be explaining how you can begin your digital transformation journey. People use their mobile phones almost every time, so just imagine being there for your customers anytime they need you.

At AltexSoft, we’ve come up with a strategic approach to building data-driven organizations. Every time we talk about analytics, the main point of consideration is how to shift from assumptions, based on experience and intuition, to data-driven decision-making. The eventual goals of analytics are to optimize the existing processes to reduce cost, personalize customer experience–we talked about that earlier–and automate operations using gathered data and best practices.

What is digital transformation in business?

The traditional company simply produces and sells products according to what customers order. The transformed company, however, uses a steady flow of real-time data and insights on which products are being consumed, where and how quickly inventory is depleting. This informs production to maximize efficiency in the here and now, but also helps the company predict what consumers will want months or even years into the future. Prior to the COVID-19 pandemic, digital transformation largely focused on customer experience. Now, digital transformation is the centerpiece of operational efficiency and innovation across the organization. Service partners can provide businesses with access to a wide range of technical skills and knowledge, including software development, data analytics, user experience design, and project management.

Having the right transformation strategy and workplace—typically called a transformation office—is critical for all stakeholders. Driving big change in an organization is too difficult to pull off without a plan. There are five major areas companies must address, often in parallel. Explore the evolving power dynamic between people and organizations.

Better resource management

They also expect the same response times on weekends as on weekdays. This need for instant gratification has forced organizations to remain accessible and on-demand, 24 hours a day, 7 days per week. For example, you can get a good understanding https://globalcloudteam.com/what-digital-transformation-means-for-business/ of your customers by evaluating general requests, product quotes and support enquiries. This data can then be used to create highly targeted messages to match customers’ individual preferences, which results in a more personalized experience.

Why businesses need digital transformation

The brand is also planning a ‘Shop and Go’ payment service, a geolocation system for in-store products and chatbots for simpler customer service. Its transformation to digital has always been aggressive as it constantly strives to use technologies and channels to engage customers and drive sales. It embraces an omnichannel approach to enable customers to move from one channel to another easily. As one of the biggest brands on the planet, Nike’s swoosh logo is instantly recognizable. But even Nike needed to undergo a digital transformation to remain competitive and be where their customer was – online. There are a lot of terms when it comes to businesses and digital, so it’s easy to confuse them.