The benefits of digital transformation are multiple and provide quick solutions to all problems. Major benefits include increased agility and transparency, better data and analytics, and improved customer experience. Many companies are adopting digital solutions for their benefit. In this blog, we will be discussing the 13 major benefits of digital transformation for a better understanding.
I. What is Digital Transformation?
Digital transformation refers to the process of integrating digital solutions into the general business operations, to avail the benefits that it guarantees. Some of the major digital transformation benefits that make all companies implement it are higher efficiency, improved customer satisfaction, and increased revenue.
The process involves the use of technology to cater to the growing needs of the industry. These technically advanced tools include smart sensors, AI-powered chatbots, and methods like machine learning and cloud-based systems.
In the next section, we will elaborate on the key benefits of digital transformation that make it a go-to process for all companies.
II. Key Benefits of Digital Transformation
The process of digital transformation has several benefits that make it quite popular among companies. Here is a list of the 13 key benefits of digital transformation that you must know about:
a. Enhances customer satisfaction
Customers are a priority of all companies and their demands are quite dynamic. Most customers prefer personalized products that cater to their needs. Similarly, they also look for companies that do not require them to invest too much time in selecting services. This is how the benefits of digital transformation attract companies.
As per Accenture, CX or customer experience has “emerged as the key driver of sustainable business growth.” With the use of digital tools, companies can cater to the problems and demands of customers through AI-powered chatbots that are available round the clock. It can also help suggest similar items to purchase by analyzing their previous experience.
b. Provides data-centric insights and analytics
The benefits of digital transformation also include the collection of accurate data as all business operations are automated. This makes data collection easier, along with other tools like smart sensors, and weighing scales. This also provides better insights and reduces the possibility of human error.
Well-defined data provides you with a better understanding of customer behavior, which can be further utilized to create a good business strategy. With better data and analytics, companies can make more rational decisions, keeping in mind the company’s overall benefit.
c. Improves user experience
With digital transformation, companies can improve user experience by making it smooth and effortless. This also involves ensuring that customers do not face any issues while using the services and creates a seamless environment through AI, and other digital solutions.
As per McKinsey’s Employee Experience Survey, “People who have a positive employee experience have 16 times the engagement level of employees with a negative experience and are eight times more likely to want to stay at a company.” This speaks volumes about why you must invest in enhancing the experience of your users.
d. Encourages collaboration and improves communication
Communication is the key to success and the benefits of digital transformation provide solutions to facilitate the same. Technology can be used to remove unwanted elements, slow response time, and inefficiency in the system. It also provides a single platform for collaboration between the various departments, thereby allowing employees to lay forward their concerns without hesitating.
e. Ascends agility and transparency
As per McKinsey, in 2017, 92% of the respondents to its survey agreed that agility and flexibility are important to grow one’s business rapidly. Since the market is quite dynamic, all companies are expected to be quick in their responses and cater to the demands of the customers efficiently. The benefits of digital transformation help your company adopt continuous improvement (CI) strategies, thereby making it more agile.
Also, it is essential to maintain transparency within the organization for success in the long run. When business operations become transparent, the trust of employees heightens exponentially. It enables them to know the company better and develop a good standpoint. Transparency may be increased by documenting all processes well and enhancing visibility. This will also be beneficial in identifying pain points, if any.
f. Mitigates human error
With automation, even the most minuscule tasks are done quickly. The benefits of digital transformation include reducing the dependence as well as the burden on humans to finish repetitive tasks thereby mitigating any errors that may be caused otherwise. After all, digital solutions are less risky than the others.
To cite an example, digital transformation benefits the banking industry by providing enhanced security through automated checking of details and security pins that are verified digitally. Companies can also reduce the chances of data malfunction or loss through proper risk management.
g. Encourages digital culture and future growth
Digital transformation is not just a process for the present, but a project with a vision. It ensures a long-term plan for companies that guarantees growth in the future. The process also provides all employees with the required tools to create a seamless work environment and encourage collaboration. It is the benefits of digital transformation that attract companies towards the process.
Barry Thomas, senior retail-commerce consultant at Kantar says, “One out of two or one out of three jobs requires reskilling.” This makes it important to focus on the experience of employees and provide them with the best tools and means. To be sure, a digital culture helps companies remain sustainable and promotes reskilling of employees now and then.
h. Better resource management
One of the key benefits of digital transformation is that it manages resources quite well by combining them and preventing any overlaps. It can consolidate several software, databases, and applications for smoother functioning of the company. Moreover, it helps companies use data to their advantage by securing it on cloud-based systems and making access to them easier.
i. Higher profitability
Digital transformation makes your business operations more efficient and productive, thereby increasing profits exponentially. As per Gartner, around 56% of CEOs believe that improvements in the digital sphere have increased their revenue manifold. Digital transformation can fasten business processes and create a more innovative and agile environment.
According to SAP Center for Business Insights and Oxford Economics, 85% of the organizations deploying digital solutions report increased their market share. It also puts an end to repetitive tasks and enables employees to focus on tasks that require human attention. This further results in higher productivity and an increased ROI.
j. Decreases costs
One thing that you do not want in your business is larger costs and this is where you must adopt digital solutions. As per Gartner, almost two-thirds of digital transformation initiatives begin with an aim to reduce costs. The benefits of digital transformation include efficiency of assets, improved employee productivity, and reduced production cost.
Moreover, thanks to better data analytics companies can be sure of what they use and how much. Better management of resources also reduces wastage and decreases unnecessary costs significantly. Other problems like downtime, customer grievances et cetera can also be solved in a cost-effective manner.
k. Enhance the quality of goods and services
If you want to attract more customers, you must ensure that your goods and services are of good quality. Through well-defined codes and strategies, companies can improve the overall quality of their products easily. Other strategies like tracking, reduction of scrap, consistent data management et cetera also help in the long run.
Many companies are also deploying software like product lifestyle management (PLM) to smoothen the manufacturing of products and services. This also allows key stakeholders to access data in real-time efficiently. This is one of the key benefits of digital transformation.
l. Better time-to-market
With the forever dynamic and increasing demands of customers, companies are more focused on delivering their services in the best manner possible. To improve their time-to-market companies are taking advantage of the benefits of digital transformation by fastening product development and managing supply chains vigorously.
Through methods like digital threads, it has become practically easier to access accurate and reliable data as and when required. Companies are also encouraging innovation through constant experiments and making themselves more agile and flexible to cater to the demands of customers.
m. Competitive advantage
As per Dell’s Digital Transformation Index, 2021 around 91% of the organizations have either adopted or are planning to adopt digital solutions for their business strategy. This is primarily because a good digital strategy provides companies the opportunity to outshine their competition and stay ahead of it.
When you improve the quality of your products and services, you are bound to attract a larger audience of customers. It is obvious that everyone demands the best quality and therefore, the benefits of digital transformation help you gain competitive leverage over all other companies in the market.
III. What Does Digital Transformation Involve?
After knowing the benefits of digital transformation it is essential to understand what a digital transformation involves, to be prepared for it at your end. A good digital plan includes the following elements:
a. Applications: Under digital transformation, companies use technical expertise to find solutions to their problems. Such means include the deployment of applications to facilitate processes.
b. Operations: Through automation, companies can use digital solutions to speed up business operations and keep them updated. This has a similar effect on the workflows.
c. Projects: Digital solutions also enable ley stakeholders to get a top view of the entire project, and also understand the allocation of resources among other key processes.
d. Collaboration: Collaboration among the various departments of the company improves communication, and leads to a more successful digital transformation.
e. Analytics: Through better data and analytics, companies can make more rational decisions and implement them accordingly. This makes the entire project planned and successful.
f. Integration: It is also essential to connect the existing systems with the new ones, to ensure that they work together and bring out the best in your company.
IV. How to Use Digital Transformation to Your Advantage?
No matter how much effort you put in, if you do not know how to use the benefits of digital transformation to your advantage, your project is bound to fail. Here is a list of four elements that you must focus on to ensure a smoother and more profitable transformation.
a. Technology: It is important to have a well-planned transformation, which is implemented following a robust strategy. We advise the use of state-of-the-art technology, as this element will be determining the results later on.
b. Long-term plan: For any digital transformation plan to be long-term, companies must take their past and present conditions into account. A better knowledge of the same makes your strategy improve.
c. Team management: A flexible, innovative, and agile team is something that all projects must have. This team should collaborate through communication and be ready for any challenges whatsoever.
d. Flexibility: Our advice is that you work as per your pre-planned strategy but, incorporate any changes that might seem necessary in the process. This means that you need to be flexible in your approach.
V. Frequently Asked Questions
a. Why is digital transformation important?
One of the major benefits of digital transformation is that it helps companies stay competitive and relevant. It provides opportunities to stay innovative and flexible to the changing market dynamics. Moreover, it increases the revenue manifold, enhances customer satisfaction, and improves collaboration across departments.
b. Why is a change in the work culture necessary?
It is essential to have an adaptable work culture that inculcates newer ways of thinking in the employees. This culture must encourage proper communication, collaboration, and innovation through experiments. It is necessary for a successful digital transformation. A smoother environment where all people can share their concerns without being worried is important along with an agile approach.
In this blog, we have elaborated on the top 13 benefits of digital transformation, which make the process quite lucrative for all companies. We have also discussed how you can take advantage of certain elements to ensure that the benefits of digital transformation ensure a successful journey for you. We hope this helps you out!