20. August 2020 - Report
Key benefits of a digital transformation
A digital transformation has been for a while on top of the agenda of many companies. In one of our former publications we focused on the best practices when it comes to conducting a digital transformation. In this brief, we want to highlight some key benefits of a digital transformation.
1. Drives competitive advantage
Companies that invest in digital transformation often create a significant competitive advantage. New technologies can help to improve business processes and for many companies, a digital transformation of their business is simply a matter of surviving in the specific market (e.g., offline retail being disrupted by Amazon, traditional banking being disrupted by FinTechs etc.)
2. Increases revenues and allows for new revenue streams
A smart digital transformation should always help to increase revenues and drive new revenue streams. This can be achieved by offering a better customer experience and improving the sales channels. Likewise, completely new business fields can be opened: e.g., using data to generate valuable and marketable insights. John Deere, the manufacturer of agricultural machines, is a good example here: they started a transformation into a data company using data accumulated in their machines feeding an Operations Center. The data from this platform is now marketed in many ways.
3. Increases profitability
Automizing and simplifying internal processes and interactions with customers allows for saving cost. Obviously, new technologies also come with a price tag but overall, the decision to transform towards a more digital business model should allow for cost savings and thereby improving profitability.
4. Improves operational efficiency
Business processes can improve when technology is involved. In fact: a digital transformation should fundamentally redefine an organization’s business operations to eliminate operational bottlenecks and optimize existing efforts. So, one of the biggest benefits of digital transformations is the improved operational efficiency.
5. Supports an innovative mindset
The transformation towards a more digital company (even if we are talking only about parts of a comprehensive digital transformation) requires employees to deal with new technologies and to think about new ways of working and optimizing processes. This can support a cultural mindset shift and an openness towards digital solutions and innovations.
6. Improves customer experience
Using new technologies can significantly enhance consumer experiences. Automized CRM systems allow to connect with customers by personalized and well-timed messages that address the exact needs.
7. Improves employee experience
Lately digital transformation efforts have put much more focus on employees. Companies are implementing technology for more efficient employee communication, engagement, productivity and retention. Technologies that make it easier for employees to do their jobs make it also easier and faster to respond to customer requests. If collaboration between employees is improved also higher productivity can be expected.
8. Closes existing skill gaps
Technology can help to close skill gaps that most organizations are facing today. It’s no longer necessary to enroll in classroom courses and paying people to teach those courses. Instead, individuals can now sign up to online courses addressing their exact needs. These courses could be open or company-specific. An employer can organize this for their employees by suggesting various training modules and building up an online training curriculum.
9. Improves decision making
Data is a powerful tool when used properly; as such, companies that are digitally driven know how to turn raw data into meaningful business information. Using modern business intelligence tools, companies can get valuable insights and make better decisions based on real data.
It is clear that a digital transformation also brings challenges that need to be tackled carefully. One key aspect why transformation fail is that they are not planned and implanted professionally. Companies in established industries often have a lack of digital expertise. This is a major barrier to innovation for organizations looking to start their digital transformation journey. Get in touch with us to discuss how we can support your digital transformation with experienced consultants and experts that have done many successful transformations before.