Whether large or small, any company must embrace digital transformation to succeed in today's rapidly changing world. In fact, since a few years ago, it has become the new norm.
Digital transformation is not only a strategic shift in how a company functions; it is an absolute necessity for businesses today. It involves adopting digital technologies for their fullest innovation and adapting to the ever-changing digital technology advancements.
A mid-2020 Gartner survey revealed that more than two-thirds of boards of directors accelerated their digital business initiatives in the wake of the COVID-19 disruption, and about half foresee changing their organizations' business models because of the pandemic.
What is digital transformation, and why is so important for companies?
In essence, digital transformation is defined as business transformation enabled by technology, and for an organization to satisfy and even anticipate the expectations of its customers, digital transformation necessitates integrating cloud-based tools and technologies into their business operations.
Statista states that the global investment in digital transformation is expected to almost double between 2022 and 2025 from 1.8 trillion to 2.8 trillion U.S. dollars.
Business transformation is essential for companies because it enables greater efficiency in business processes. This can lead to efficient analysis of data and cost savings while allowing businesses to make better strategic decisions.
If companies want to remain competitive and drive revenue growth, they must adopt a business transformation strategy. So, let’s discuss the reasons why companies should invest in this type of approach.
5 reasons to adopt a digital transformation strategy
1. Efficiency Boost
The most notorious benefit of adopting a digital transformation initiative is improved productivity across the entire company. This can be the result of speeding up processes and streamlining operations through digital technologies.
A Digital Transformation Report states that executives believe that one of the top advantages of DT is improved operational efficiencies.
2. Better resource management
Digitalization enables companies to replace legacy systems serving individual business units with modern IT architectures developed to consolidate processes. DT can also help integrate applications, databases, and software into a central repository for business intelligence, leading to process innovation and efficiency across departments.
Similarly, cloud-based systems and demand-based computing resources have assisted businesses in maximizing their technology expenditures by offering as much computing capacity for service platforms as is required at any given time rather than paying for excess capacity to handle infrequent peaks in usage.
3. Increased agility
Today, companies can increase their agility with digital transformation to accelerate their time to market, which opens the door to improvement or innovation. Likewise, digitally mature companies can rapidly scale up or down based on specific needs.
4. Increased revenue
Organizations can anticipate a larger increase in profitability with a sound digital transformation strategy.
As suggested by Deloitte, companies that score higher on the digital maturity graph have more sales, higher annual net revenue growth, and higher net profit margins.
Similarly, research by the SAP Center for Business Insight and Oxford Economics reports that 80% of executives at organizations with mature digital transformations said their efforts have resulted in increased profitability, and 85% said they've experienced increased market share.
5. Cost savings
One of the top benefits of digital transformation for businesses is cost reduction, which is a direct result of the productivity boost that digitalization provides.
Digital transformation benefits in a nutshell
A business modernization strategy is an approach that will provide organizations with the competitive edge they need to differentiate themselves from competitors.
The benefits of investing in a digital transformation initiative include replacing outdated legacy systems, improving processes and efficiency, decreasing costs, increasing profit, more transparent operations, an improved customer experience and ultimately increased profitability.
Why digital transformation is key to staying ahead?
A business transformation effort will allow your company to become more agile, productive, and competitive. When done right, organizations can develop more rapidly and effectively than ever before.
By embracing digital technologies, companies can develop new revenue streams, automate tedious processes, save time and money, or even expand their reach into new markets.
Likewise, integrating technology will allow them to speed up their work and fully transform their processes.
Are you ready to start your digital transformation process? Just get in touch with us to learn how we can contribute to your digital transformation efforts.
