Call it a trend or a fad, digital transformation is happening and is transforming the way businesses are done. Many companies, including Volkswagen, Dominos, and Target, have invested in digital transformation resulting in increased revenue. Dominos even took the title of “largest pizza company in the world” from Pizza Hut, after earning a whopping global revenue of $12.3 billion in 2018 because of their digital strategy.
Regardless of the industry, digital transformation helps companies thrive in the digital age. As per a report by Forrester Inc., 47% of executives believe digital to influence more than 50% of the sales by 2020.
So, 2020 is the year for you to ignore the buzz about digital transformation. Instead, look into the details to consider investing in Digital Transformation. Here are the five reasons why!
1. Adapt to changing customer behavior and preference
New technologies have emerged; the cost of communication has decreased; the product life-cycle is shrinking. What does this mean? It means that your customer’s preferences are changing by the minute. Implementing a digital strategy that embraces big data will allow you to collaborate with your customers to deliver products/services that appeal to their tastes. Like Starbucks did!
Starbucks took an analytical approach and used data like population density, traffic patterns, and income to identify suitable store locations. As a result, it earned a revenue of $24.7 billion in 2018. Like Starbucks, your business strategy needs to embrace digital transformation to thrive in today’s competitive environment.
2. Increase operational effectiveness and efficiency
Operations is one of the most crucial functions of any organization. When managed properly, these activities can save you millions. Operational innovation allows businesses to achieve revenue goals. Many companies have aced their operational strategy like Walmart.
Walmart decided to quit holding inventories instead, focused on replenishing products directly from the suppliers. By managing the supply chain, it was able to achieve cost leadership. But the whole process is not possible without collaboration with technology. Digitizing the traditional processes increases operational effectiveness and efficiency.
3. Provides you a competitive advantage
Doing business the old way is fine, but remember that the technological paradigm is shifting. With the evolution of AI, big data, the Internet of Things (IoT), industries like healthcare, finance, manufacturing are being disrupted. Soon doing business, the traditional way will not be a solution to technological disruption.
For instance, imagine yourself in the healthcare industry, implementing AI to predict diseases accurately and prescribe suitable medication. The chances of your customers switching decreases with every accurate prediction. By investing in a digital transformation strategy, you are successfully differentiating yourself from the rest in the industry.
4. Enhance or change your business model
A digital transformation will allow businesses to gain more by enhancing or improving business models. For example, let’s look into the transition of Amazon Web Services. It started by satisfying its own IT needs and later transformed to provide cloud infrastructure services to others.
By harnessing the power of digital transformation, Amazon Web Services accounted for 47.8% of the public cloud services market in 2018 (Gartner Analysis). Hence, digital transformation allows the enhancement or change in the business models, which can open doors to opportunities.
5. Improve employee productivity
As much as digital transformation helps outdo organizational performance, it also plays a crucial role in improving employee productivity. For any enterprise with traditional processes, employees often quickly burn out, resulting in lower productivity. For instance, for a non-profit organization with most processes on paper, employees can often struggle with storing, accessing, and retrieving required data. But with an enterprise system, the problems could be easily solved while taming the complexities. Consequently, employees can focus on the outcomes of the processes rather than being engulfed in the confusion.
CEOs of companies, big or small, are not investing in digital transformation because everyone is doing it. They are doing so because they see the benefits it can bring to the business. The way digital strategies have changed, and enhanced enterprises today is not ignorable. Now, it’s your call to take the next steps to digitize your business. We would surely love to be a part of it.
Leapfrog helps small and medium businesses envision and execute digital transformation and innovation. Leapfrog has developed the digital flywheel that accelerates automated digital transformation and innovation.
Book a Free 30 minutes Consultation about how Leapfrog can help you bring digital transformation to your business.