What is Digital Transformation and Why Is It So Important?
Having experience and skills related to digital transformation has now become necessary for the strategic plan of almost all companies. Companies must be prepared for the changing environment of their industry and ensure they have the right talent to train and retain existing human resources to bring new business models to life.
IDC predicts that by 2023, 53% of all investments made by companies in technology will be within the scope of digital transformation. In the light of all this information, the following can be easily predicted; Whatever the vision of a company for the future, a company that wants to grow should put digital transformation first in this vision.
Digital transformation is the application of digital capabilities to processes, products and services to increase efficiency, increase customer loyalty, manage risk and generate new revenue. This transformation includes the adoption of digital technologies in both internal and external operations; At every point that touches the customer, company employees and business partners, including sales, marketing and support works…
To be and remain a company of the future, and to adapt to change, companies must fundamentally change the way they work, be willing to accept cultural change, and rethink their status quo. Digital transformation is not an option for today and for the future; For companies, escaping the comfort zone means reinventing themselves and competing in a world full of technological advances. In the most recent and clearest example of this, digital transformation has played a key role in responding to the disruption of business ecosystems during the pandemic, and many businesses have rewarded their efforts to meet this sudden change.
We can state the 7 benefits that will support the necessity of digital transformation as follows:
1- Increases operational efficiency and productivity.
Having the right technical requirements working together can streamline workflow and increase productivity. Digital transformation enables team members to work more efficiently by automating many manual tasks and integrating this automation across the company.
The need to maintain operational discipline related to safety and performance will remain a priorityfor today’s and future business leaders. With the right set of analytical tools, this data can be turned into valuable business outputs that can be used to make more informed and faster decisions. The more deeply embedded analytical tools are in business operations and the focus of work culture, the greater the impact they can have.
2- It strengthens decision making by deepening data analysis (Big Data).
Businesses of all kinds aim to have lots of customer data. The main benefit they get by doing this is to optimize this data for analytics that can move the business forward. Digital transformation creates a system for collecting the right data and fully incorporating it into the structure for higher level of business intelligence.
Putting data and analytics at the center of a digital transformation strategy allows businesses to leverage big data. It creates a way for different functional units within an organization to transform raw data into meaningful interpretation at various touchpoints. By doing this, it reveals a homogeneous view of customer experience, operations, manufacturing, finance and business opportunities. As part of this process, it is critical to evaluate how customer data is collected, stored, analyzed and shared.
It is important for companies that aim to strengthen their presence in the future to implement a security strategy consistently across all networks, applications and data. Consumers are becoming increasingly aware and concerned about how their data is collected and used. Companies should show that you respect their data by implementing strong security practices when processing data, and by giving customers the opportunity to change their minds at any time, through digital efforts.
3- It provides stronger resource management.
Digital transformation combines information and resources in a set of tools. It consolidates company resources instead of cluttered software and databases and reduces complexity in the use of resources.
As of 2020, the average number of applications used in corporate businesses is 900. Digital transformation can integrate applications, databases and software into a central repository for business intelligence. Over time, digital transformation creates tools to generate time and resource gains by reinforcing business partnerships.
Digital transformation is not a department. It covers every aspect of a business and ensures the efficiency of processes between units. From sales/marketing to finance and operations, every department benefits from sensitive data. As we equip teams with easy-to-use tools to get their work done, it’s important to optimize and secure data wherever it resides.
4- It increases the speed of reaction to demand changes in the market.
Digital transformation is making organizations more agile. Businesses that leverage the power of software development prefer to increase their agility with digital transformation to adopt continuous improvement strategies. These improvement efforts enable faster innovation and adaptation when needed.
Businesses increasingly demand agile hybrid IT services capability and see perfecting the user experience as a critical part of business transformation. Because customer expectations are based on their entire digital experience, not just their interactions with company officials.
5- It provides an increase in profitability.
Digital transformation reduces costs by saving time in processes. It also opens the door to new business opportunities and revenue streams by enabling the creation of new products and services.
Companies that can successfully realize digital transformation increase their productivity and profitability. According to the results reported by SAP Center for Business Insights and Oxford Economics; 80% of the companies that successfully completed the digital transformation increased their profits and 85% increased their market shares.
In this case, which company will be more efficient and profitable? E.g; Is it the company that uses spreadsheets for supply chain management, or that uses predictive inventory analytics, real-time logistics performance metrics, and artificial intelligence to source materials?
6- It promotes a digital corporate culture.
Digital transformation in a company attracts new talent and arouses expert professionals. However, by providing existing team members with the right tools tailored to their environment, digital transformation fosters a digital culture and can bridge the gap, helping employees be more effective and productive day in and day out.
7- It provides a better customer experience.
Digital transformation not only provides efficiency for teams in companies, but also enables smoother experiences for customers.
Demands from customers are increasing day by day and competition is getting fiercer in all kinds of sectors. Firms working with suppliers and distributors, subcontractors and consultants to produce a variety of products and services that appeal to customers are becoming increasingly dependent on each other.
It is a reality where customers have high expectations for digital experiences and this will increase. Consumers are accustomed to endless choices, low prices and fast delivery. Customer experience (CX) is the new battleground for brands. Gartner reports that more than two-thirds of companies say they compete mostly on customer experience.
Digital transformation increases the speed of companies to respond to demand changes in the market and provides a competitive advantage to the company by increasing the quality of the products/services produced.