Digital transformation is the integration of digital technology into all areas of a business. It leads to fundamental changes in the way a business operates. Companies prefer digitalization to make their business more efficient and more profitable.
The essence of digital transformation is to make services and data actionable and provide insights to improve an organization. Instead of only moving data to the cloud, processes need to work smartly with a robust business intelligence system.
Why is Digital Transformation Important?
Digital transformation changes the way organizations work. It affects every level of an organization and brings together all the data in circulation to work together more efficiently.
Benefits of Digital Transformation
1. Advanced data collection
Businesses may collect a considerable amount of data about their customers, but the real benefit is optimizing this data for the analytics needed to move your business forward.
Digital transformation creates a way for different functional units of an organization to turn raw data into insights. Thus, business managers; get an at-a-glance view of customer, operation, production, finance and business opportunities.
2. Greater resource management
Digital transformation gathers company resources in a single place instead of cluttered software and databases. The average number of applications used in enterprise businesses in 2020 is around 900. This number makes it difficult to provide a consistent experience. Digital transformation integrates applications, databases and software into a central repository for business intelligence.
Digital transformation covers all areas of the business and achieves efficiency by providing coordination between units.
3. Data-driven customer insights
Data is the key to the door between you and your customers. By better understanding your customer and their needs, you can create a customer-centric business strategy.
Using both structured data (personal customer information) and unstructured data such as social media metrics can drive business growth.
Properly managed data generates personalized strategy and provides agility.
4. An overall better customer experience
Customer expectations are very high when it comes to their own experience. Gartner reports that more than two-thirds of companies say they compete mostly on customer experience.
Experts state that customer experience is the primary driver of sustainable business growth. Therefore, even a single point increase in customer experience scores affects annual growth.
5. Promotes digital culture
Providing the right tools tailored to team members supports digital transformation and fosters a digital culture.
While these tools provide an easy way to collaborate, they also help move the entire organization forward digitally. Digitalization increases inter-departmental harmony, and it forces team members to develop their skills and digital learning.
6. Increased profits
Digital transformation increases the efficiency and profitability of companies.
According to the results reported by SAP Center for Business Insights and Oxford Economics, companies that completed their digital transformation increased their profitability by 80% and their market share by 85%.
7. Increased agility
Digital transformation makes organizations more agile. Digitization enables faster renewal and adaptation while paving the way for improvement.
8. Improved productivity
Having the right technical tools working together streamlines workflow and increases productivity. By automating many manual tasks and integrating data across the enterprise, team members work more efficiently.