What is digital transformation?
Digital transformation is a practice of revamping the existing processes, mainly in business, and integrating digital technologies into all operations. This typically results in moving to the cloud, using machine learning, and implementing automation software, among other things. Enterprise digital transformation delivers a new robust model with higher efficiency, lower costs, and greater customer satisfaction.
The benefits of digital transformation
The main digital transformation benefits:
- Leveraging big data. Businesses tend to collect insurmountable amounts of data about their clients and companies’ functioning statistics. Digital transformation provides the tools to structure, process, and apply this information.
- Personalization. Using software to analyze customers’ behavior allows you to personalize recommendations and communication, improving customer loyalty. With digital transformation, you can tap both into the information already contained in your databases and new data, for instance, from your customers’ social media.
- Finding target audiences. In addition to improving your customer experience, you can also enhance your targeting practices.
- Productivity and agility. Digital tools help optimize employees’ workflows, improving their productivity. They also enable companies to leverage continuous improvement (CI), increasing their agility.
- Efficiency. With the right software, you can reduce resource waste while getting better results. For example, you can automate routine tasks, use AI to derive insights into how to allocate your resources, and estimate your budgeting needs more accurately.
Four main digital transformation areas
The key focus areas for digital transformation:
- Processes. The main focus of digital transformation solutions is to reduce costs and increase the effectiveness of a company’s processes.
- Business model. Some businesses strive to challenge the core concepts of how services are delivered in their industry. Digital transformation can be a powerful tool for a makeover of your business model.
- Domain. In addition to innovating your industry, you can also expand into other markets. Amazon represents a vivid example of this possibility. Originally the traditional web retailer, Amazon was able to penetrate the cloud computing services market due to its exceptional digital capabilities and their wide pool of partner companies who needed computing services.
- Corporate culture. Digital transformation shifts all employees’ mindsets and management practices towards greater accountability, decentralized decision making, and collaboration. It encourages self-learning and constant professional growth.
Why is digital transformation important?
The digital transformation process can improve the agility and efficiency of operations, help you boost customer satisfaction, and gain a competitive advantage by providing advanced analytical, management, and automation tools.
Furthermore, the impact of digital transformation is so significant, businesses are widely adopting it. This trend means that, eventually, all enterprises will have to integrate this strategy to avoid lagging behind.