Improving your business processes is always a good idea, and this has been an important objective of companies over time. We’ll take a dive into this and more as we discuss the objectives of digital transformation.
Using the power of the internet and modern technology in general, organizations have been able to enhance old ways of working and eliminate redundancies and waste. The game-changer has been the internet, with its powerful capability to create change. This has given rise to the birth of what is known as digital transformation.
What is digital transformation?
Digital transformation is the use of digital tools in all areas of an organization to change how they operate for the better. This might mean slightly different things to each organization. Whatever the meaning, digital transformation requires total buy-in from the business.
If workers are concentrated on the underlying intent of digital transformation, there is a higher chance that digital transformation will succeed. Here are some of the main objectives of digital transformation:
1 - To improve service
Service improvement is one of the cornerstones of digital transformation. Any internal enhancements cannot be for the sake of themselves. Customers must enjoy a better service and their needs must be met faster and more fully. This will have a positive effect on revenue and profits.
2 - To increase internal collaboration
If a digital transformation project is large enough, it can touch the whole enterprise and foster better internal collaboration. Typical examples are company intranets being used to improve document management processes. Intranets can also open channels of discussion among workers on teams who would otherwise have had little contact.
3 - To optimize processes
Every business operates through a series of repeated processes. These might be commonly related to manufacturing, marketing, or accounting. Digital transformation allows competencies to be refined to improve processes.
With continuous improvement, operating models get better and the positive results can be felt by the business. Process improvement can touch any part of the business. The beauty of digital transformation is that it can target a few parts of the business, or the entire enterprise at once.
4 - To increase efficiency
Efficiency is the natural result of improved processes. Using the unmatched power of modern technology, workflows can become faster, slicker, and more repeatable. Staff spend less time on mundane tasks so they can focus on ideas and innovations.
Customers also benefit from increased efficiency in their dealings with organizations. Customer tools like extranets, portals, and ordering systems can begin to add true value to when they are streamlined and fulfill customer needs.
5 - To become more agile
In a fast-moving marketplace, organizational agility is a desired trait. Gone are the days of rigid, slow-moving organizations that dictate to customers how they will be dealt with. Nowadays, even the largest companies have to adapt to trends and listen to their consumers.
Technology enables businesses to become connected yet flexible. Decision-making time reduces, and learning cycles are made shorter. With digital transformation, vast amounts of data points can be measured and analyzed with the goal of improvement and greater agility.
6 - To create new business models
The digital revolution has opened several new business models. Improvements in technology mean that old business models can be usurped and taken over in no time. Disruption is a keyword in today’s economy, and disruption is mostly driven by digital technology.
When old iterations of technology are replaced by new ones, the fingerprints of digital technology are all over the change. Think of the journey from owning music on devices such as vinyls and CDs. This model was replaced by owning the device and buying the music digitally, in the form of the iPod. Today, music is streamed by subscription services such as Spotify. These redundancies have been driven by technology.
7 - To reduce costs
Cost-reduction is highly-desired in business. Since the days of the industrial revolution which mechanized hand-driven processes, cost reduction has been the difference between business survival and failure. Today, powerful AI performs menial, repeated tasks and takes headcounts out of businesses to save costs
8 - To improve employee performance
Digital transformation can create a work environment where employees can improve productivity in their daily work lives.
Enterprise collaboration tools are great examples of this. Tools like Microsoft Teams can reduce waste and increase productivity in large organizations. The time-savings and productivity improvements are almost unquantifiable when these tools are used to their fullest.
9 - To comply with data security
Data security is a major concern of businesses today, and rightly so. With so many traditional tools and implements now having a digital interface, security becomes paramount as almost anything can be hacked.
As we move into the IoT age, security will be the major watchword. Digital transformation in this sense is not a nice-to-have, but a must-have. Whatever your digital transformation project, your business cannot remain an island of manual processes expecting to compete in a digital marketplace.
10 - To keep your competitive advantage
As some of the major wins of digital transformation are process enhancement and improved efficiency, it holds that businesses that do this best will reap the rewards. They will create and increase their competitive advantage over rivals.
11 – To allow you to focus on core competencies
It is not uncommon for rapidly-growing companies to expend time and effort on non-core competencies. Digital transformation provides a good opportunity for firms to take a long, hard look at what is essential to their business and what is a sideshow.
From there it is a matter of in-sourcing better, or deciding to outsource for the benefit of the company.
Digital transformation is a powerful and necessary journey that many organizations must take. But this switch does not happen easily. You need a strategy and the tools that will support your objectives of digital transformation.
Digital transformation is a powerful way to achieve greater collaboration, agility, efficiency, and productivity. The rewards can be felt across your organization.