Understanding Digital Transformation: Definition, Benefits, and Opportunities
Digital transformation is a term you may be hearing a lot these days, and for good reason. According to recent studies and market analyses, in 2022, the global digital transformation market was valued at an impressive USD 731.13 billion, with a projected compound annual growth rate of 26.7% between 2023 and 2030. This remarkable growth is largely due to the trend of adoption of advanced technologies such as cloud computing, big data analytics and Artificial Intelligence (AI) across businesses worldwide – regardless of their size or stature.
But what exactly is digital transformation and how can it benefit your business? Whether your company is deep into its digital innovation efforts or if this is your first time hearing about the topic, we’ve provided a deep dive into the buzz around digital transformation.
Keep reading for a breakdown of why digital transformation is more important than ever and how to implement digital strategies that will improve your organization’s customer experience and general workflow in the modern era.
Digital Transformation Definition
Digital transformation is defined as the integration of digital technologies into new or existing business processes. This transformation is enabled through the use of cloud computing, AI, Big Data analytics and other advanced technologies. The goal is to create improved customer experiences and optimize internal operations.
To understand digital transformation, we first need to understand two other key terms: digitization and digitalization:
Digital transformation brings digitization and digitalization together as it involves the integration of digital technologies into existing business processes in order to improve efficiency and generate new opportunities. Digital transformation can be applied to any industry, from retail to healthcare and finance to education. In every case, its purpose is to create a more efficient and customer-centric organization.
Let’s dig a little deeper with some help from DocStar:
The technology will continually evolve to incorporate business process automation, robotic process automation, and artificial intelligence. Focusing on one or more of these or other technologies is shortsighted – it’s the way you implement these technologies that’s important. […] digital transformation can’t just focus on the online world – it needs to bridge the gap between online and offline.
It should incorporate the enterprise, supply chain, partners, customers, and employees in terms of strategy and execution.”
DocStar summed it up pretty well and cleared up a lot of confusion around this term. Many people hear “digital transformation” and think of merely digitizing their paper files into electronic documents or shopping online with a TikTok account for marketing purposes, but digital transformation involves incorporating multiple forms of digital technology, software, and artificial intelligence into daily business processes.
Within a digital transformation framework, technology and software are implemented to make processes easier for everyone from the CEO to the new hire to the customer. These modernization strategies are also built to grow with your company and your customers as you expand and as new digital innovations are made.
Why Digital Transformation Adoption Matters in 2023
Digital transformation is transforming the way businesses interact with customers, suppliers and partners. It is not a trend that can be ignored since it provides significant competitive advantages to those companies willing and able to harness its potential.
For instance, advancing cloud technology and mobile applications are revolutionizing the customer user experience as well as allowing real-time data collection. Long-term consumer behavior changes such as widespread acceptance of one-click payments or streaming services, for example, are helping catalyze digital transformations in many industries, from retail enterprises to health care providers.
By embracing the digital transformation tide now, businesses can turbocharge their organizational performance levels and propel themselves into today’s rapidly changing business world. Your business can no longer ignore the push towards digital transformation if you want to stay competitive in 2023. The time is now to leverage the technology and strategies available to create a more efficient, customer-centric organization.
Read more: Stop Delaying Your Digital Transformation.
The Benefits of Digital Transformation
Digital transformation provides businesses with the opportunity to unlock new revenue streams, reduce operational costs, and communicate better with customers. By taking advantage of digital technologies such as automation software, cloud computing, and analytics tools – combined with a comprehensive strategy – companies will be able to drive innovation in their processes and offer more value to customers.
In addition to these strategic advantages, digital transformation will provide business leaders with unprecedented visibility and insights into their operations. Through automation, predictive analytics, and machine learning, teams can gain insight into customer behaviors and trends in order to better serve their customers.
The Acceleration of Innovation
Innovations in technology have accelerated at an all-time high since the invention of the computer and the mobile phone. Businesses and society have imagined new ways of connecting, solving problems, and speeding up procedures. Within only the past year we have seen a huge acceleration in technology and digital software with the onset of the Covid-19 pandemic as the world had to imagine a new way of living, working, and connecting.
These trends in digital innovation will only continue into the future and it’s better to hop on board than be left in the dust. A 2019 study showed that 70% of organizations have a digital transformation strategy or are working on one. Now that we’ve reached a post-pandemic 2023, those numbers are likely even higher. The sad truth is that businesses that aren’t leaning into digital initiatives will be left behind.
Your organization needs to adapt to new technology and the ever-changing digital status quo or you risk losing consumers who have outgrown aged business models and practices. But don’t stress! This is a situation that all business owners are facing, so you aren’t alone. Instead of fearing the future of digital transformation, it’s time to welcome it with open arms as we imagine new possibilities.
Imagine Innovations in your Business Capabilities
Digital transformation is all about getting creative and imagining innovations in your business capabilities with the help of technology. This is the time to brainstorm what you can improve about your business processes.
Take a deep dive into what is and isn’t working in your various business models and processes. What can you do to speed up manufacturing or deliveries? How can you give customers a better-personalized experience? What smart technologies have you read about recently that can be utilized in your business? Posing these questions to your team in all departments will begin to cook up some new ideas that will only benefit your organization’s growth.
The top benefits of adopting a digital model include improving operational efficiency, meeting customer expectations, and improving new product quality. Consider these areas while you analyze your business models, products, and workflows.
Let’s look at some opportunities for digital transformation in different industries:
- Telehealth services
- Automated medical data tracking and analysis
- AI-driven clinical decision support
- Automated shelf stocking and inventory management
- Customer experience personalization through AI technology
- Virtual reality shopping experiences
- Automated KYC (Know Your Customer) processes
- Digital identity verification systems
- Risk scoring & fraud prevention
- Virtual classrooms
- Remote tutoring services
- AI and data analytics to personalize learning
- Augmented reality site mapping
- Predictive analytics for material and labor costs
- Digital project tracking and monitoring
- 3D Printing
- Inventory tracking and management
- Smart grid systems
- Real-time energy usage tracking
- Predictive analytics for maintenance needs
No matter what industry you’re in, digital transformation is essential if you want to stay competitive. Once you can take a deep look at your company as it stands right now, you can begin to envision how it can grow with the acceleration of innovation. With that vision, you can set goals and take concrete steps in your digital transformation journey.
Read more: Benefits of Going Paperless for Utility and Energy Companies.
Setting Digital Transformation Goals for Your Company
Once you have a vision of your company’s digital future, you can begin to set goals. Transformation doesn’t happen in a day but planning that digital transformation can start right now.
What do you want your company to look like in a year? Sometimes it’s easier to break up your digital transformation initiative goals by the department. Once you have that vision for faster procedures on the manufacturing end or more personalized customer experiences for your consumer basis, you can set goals for each department and your company as a goal.
Remember that digital transformation isn’t merely one step in modernization, it is the collection of new technologies and software working together in different areas of your business to improve overall efficiency so that you can grow with modernization. This is why you should set digital technology goals within each department and for your company as a whole.
By the year 2025, where do you want to stand? Do you want your company to be an industry leader? Do you want to increase revenue by X amount? Do you want to penetrate the eCommerce market? Create a smoother onboarding employee experience?
In 2018, studies showed that 39% of executives expected to benefit from their digital transformation initiatives in 3 to 5 years. The companies that are benefiting today are the companies that set goals for this week and goals for years from now. Thinking ahead prepares you for the future as innovation accelerates. Set some goals, big and small, and then you can find some partners and strategies for a successful transformation.
Develop a Digital Transformation Strategy
Developing a digital transformation strategy is a team effort. This is where research, collaboration, and partnerships come in. You may have imagined a vision for your company and set some goals, but tackling the digital transformation process comes with challenges on all fronts. Different aspects of business require a unique modernization strategy.
Many companies fall short in their digital transformation efforts for several common challenges: they lack direction and they try to do it all themselves.
To be successful, your company must take guidance and support from digital transformation leaders.
The partnerships that you make in your digital business transformation strategy will play a key role in your overall transformation. Digital leaders who are responsible for the accelerators of innovation know the ins and outs of end-user experiences and they can also offer predictive maintenance for new market demands. These partners may also see opportunities for new digital capabilities within your company that you didn’t even know were possible while helping you face digital transformation challenges.
Talk to your IT department, shop around for a marketing agency, appoint staff to transformation-specific roles, and look into automation and AI companies.
Your organization’s digital strategy can only benefit from B2B deals that let you focus on running your company while your partners help you run it better for the digital future.
Digital Transformation Success Stories
When we think of the real success stories in digital transformation a few companies come to mind. Netflix is one of the best digital transformation examples. Netflix could have easily died along with Blockbuster movie rental stores, but instead, Netflix imagined new possibilities in their business strategy and successfully developed a digital platform with the user experience in mind.
Netflix adapted to the market demands and created a new status quo in streaming services. Companies like Amazon also made huge strides in customer experience optimization with a modernization strategy that has changed the way we shop from physical stores to eCommerce.
True industry leaders know how to focus on customer experience systems by leaning into innovation and digital technology. The ability to think outside the box and welcome new solutions will create a better future for businesses and consumers.
We Can Help
At Mosaic, we are here to help you begin your digital journey and lay the building blocks for true transformation. As you partner with other companies in more advanced technologies, you will need your accounts payable department to be functioning with top speed and accuracy.
Contact Us today to meet with a digital transformation consultant.