Explore Digital Transformation: A Guide for Businesses in 2024
There is a famous statement which says “Change is inevitable”, which means no one can stop the change from happening. Understanding the change and adapting as per the changes are the key steps to deal with it.
In order to deal with the changes, you need to be aware of the new processes. In the world of business, “digital transformation” is that new process. After the COVID era, adapting to the digital world has become the need of the hour.
Many businesses are still stuck with their outdated systems which makes it difficult for them to grow. This creates issues in solving the problems of the target audience which eventually turns into an unhealthy environment for businesses.
But, who would want this for their business? No one. This situation can be overwhelming but don’t worry as the solution is not far away.
Here, the answer is simple: digital transformation.
This term might sound confusing to many people, but fear not! This ultimate guide by SoftEXedge will explain everything about digital transformation, from its basic definition to its need and importance in the market.
What is Digital Transformation? : The Definition
Digital transformation is the process of using digital technologies to change the dynamics of a business. This includes changing the process of how a business works, delivering more efficient solutions to the customers, capturing new opportunities, and competing in the market using innovative technologies.
As per Ari Libarikian, Senior Partner at McKinsey & Company, “In this era, customers are expecting more and more technologically enabled services. They want to go online and buy stuff. So, a digital business is basically a business that's centered around technology, both in the construction of the product as well as delivery and the service of the product and the experience for the customers end up being typically faster, cheaper, and more seamless and easier because it’s accessible everywhere and it’s much more user-friendly.”
Digital transformation also acts as a holistic approach for the existing businesses to reimagine every aspect of their business. This can help in solving the existing problems more effectively, enhancing the customer experience, and taking the business to a large platform to serve multiple customers.
This concept is different for each business as there is no one-size-fits-all approach.
Importance of Digital Transformation
The market is constantly evolving and there has been a fundamental shift in the way companies used to operate. The word “Digital Transformation” is significantly gaining hype, so let’s have a look at why digital transformation is so important:
Staying Relevant
With constant changes coming up in customer needs, it becomes important for businesses to stay relevant to provide better services to their customers.
So, digital transformation helps businesses to understand the customer expectations in a better way and innovate accordingly to meet their needs. This way digital transformation helps businesses to survive in the market.
Reaching New Customers
Digital transformation helps in reaching new customers as with the growth of multiple social media platforms, the entire world has become a single marketplace.
Beyond geographical limitations, businesses can expand, reach new customers, and provide services through digital channels.This helps businesses to constantly grow in the market.
Streamlining Processes
One of the major challenges with businesses who have not adapted the digital ways is they have to do their tasks manually which is time consuming and increases the possibility of errors.
Yet, using the digital tools, businesses can avoid all this stress as the digital tools help in automating all such manual tasks. Due to this, employees can save their time and focus more on planning the strategic work.
This way, digital transformation helps businesses to increase the efficiency of its employees, the overall efficiency of the business, and better productivity across the organisation.
Making Data-Driven Decisions
Running a business means handling tons of data which can be really hectic with manual processes.So, digital transformation helps businesses in collecting, storing, and analysing vast amounts of data.
This analysed data can help businesses understand market trends, customer needs, and allow them to make data-driven decisions for better outcomes.
Seamless Interaction and Trust Building
In today’s fast paced world where everything is becoming hassle-free, customers also look for a hassle-free, smooth, and personalized experience.
This helps in better customer engagement and leave the customers with complete satisfaction.
To achieve this, businesses can use digital tools like self-service portals or chatbots. Using such tools to understand customer preferences and personalizing accordingly, businesses can make better relationships with their customers and build trust.
Cost Reduction and Increased Revenue
Digital transformation helps businesses in improving their resource allocation, automating their processes, and making data-driven decisions.
All this leads to cost reduction which can be a huge plus point for businesses as they can use their funds in better ways.
Expanding globally, providing better customer experience, and making innovative products based on customer needs can help to increase the revenue of the businesses.
How to get Started on Digital Transformation?
Digital transformation is a journey and while starting this journey, you should consider the following things:
Set your vision
To have a clear picture of your vision, ask yourself what you want to achieve with digital transformation. Do you want to just focus on expanding your business globally? or, do you want to majorly enhance the customer experience?
By asking such questions to yourself, you can get a clear vision and with a clear vision, you will be able to make right decisions in your business ahead.
As per George Westerman, a research scientist at MITs Center for Digital Business, to manage your digital transformation, you need to look at three elements:
- A vision for how you will be different because this technology’s here.
- A governance framework to make sure that everybody's moving in the right direction.
- Customer’s engagement with your company to help build out that vision more and more.
Define your goals
Set specific, measurable, achievable, relevant, and time-bound (SMART) goals that align with your vision.
Identify gaps and needs in your business
Assess the current status of your business and analyze what your business needs at the moment. Is it new software, new assets, better employee training, data security measures, or more?
Choose right digital tools
Do not be overwhelmed with multiple digital tools available in the market. Initially only use the tools that fit in your budget and solve your problems.
Understand your customers
Focus on understanding your customer needs and expectations right from the beginning. This will help you in giving your customer better experience and building trust.
Focus on data security
At the initial stage of digital transformation, keep data security as your main concern. Implement robust security measures to protect your customer data.
Focus on high-impact projects
Look for the areas where you can make the best impact and put your efforts there. Do not try to do everything at once.
This does not mean that you completely ignore short-term projects. Engage yourself in short-term projects too as they will help you get early wins and boost your confidence.
Include continuous learnings and necessary training
Digital transformation will not be an easy transition at first. Your organization and employees will need some time to get adapted to the changes.
Amidst all the changes, ensure to provide necessary training and continuous learning to your employees.
Keep tracking your progress and adapting new strategies
It is important to track your progress to have a better understanding of where you are falling short and need to put more effort into.
Also, based on your results, be ready to adapt to new working strategies and refine your approach. This might seem difficult at first but the right strategy and approach can do wonders in your digital transformation journey and business.
Pre-Digital Era vs Digital Transformation Era
With the rise of business transformation, the world of business has experienced a major shift in multiple ways. Let’s have a look at how things have changed:
Focus
- Pre-digital: Business used to focus on increasing manual efficiency for doing business operations and managing business processes.
- Post Digital Transformation: The focus has been shifted to customers. Now businesses focus more on providing better experience to customers for better customer engagement using digital tools.
Technology
- Pre-digital: Technology was seen as a supporting help and most of the business processes, like data storage and data handling, used to be done manually.
- Post Digital Transformation: Technology is used in all aspects of business and plays a centric role. Business processes like storing and managing the data are being done with automatic procedures using data analytical tools.
Operating speed
- Pre-digital: Business used to operate at a lower pace and it was difficult to adapt to changes.
- Post Digital Transformation: The operating speed for business has increased and became better. Adapting to changes has also become comparatively easy with the availability of multiple digital tools.
Marketing and Sales
- Pre-digital: Marketing entirely used to rely on traditional ways like TV commercials and printing ads on newspapers. Sales used to majorly reply on phone calls and physical meets.
- Post Digital Transformation: Nowadays, businesses use digital marketing tools and majorly focus on building social media presence, email marketing, and SEO. To connect better with customers and understand their needs, sales teams focus on video conferencing, CRMs, and social media platforms for selling.
Security
- Pre-digital: Security concerns were majorly physical and was focused on protecting the data stored on-premises.
- Post Digital Transformation: Cybersecurity is a major concern and businesses focus on securing online transactions and protecting the data stored in the cloud from hackers.
Competition
- Pre-digital: The competition has only been limited to geographic boundaries.
- Post Digital Transformation: Now, the world has become a marketplace without any geographical constraints.
Collaboration
- Pre-digital: Collaboration with brands or external partners used to happen within physical boundaries in the presence of everyone.
- Post Digital Transformation: Social media platforms and cloud-based tools allow hassle-free collaboration with multiple brands or external partners across multiple locations.
Examples of Companies who got Digital Transformation Right
Here are 3 examples of companies who understood their assignment of digital transformation exactly right and fulfilled (and, continue to fulfil) the changing needs of their customers in a better way:
L’Oreal
The cosmetic giant, L’Oreal has used the digital transformation just right which helped the brand in booming its sales. The brand lets you "try on" makeup before you buy it! It allows customers to virtually try on products at home using augmented reality (AR) via their smartphone cameras.
They also launched a ModiFace app on the social media platform for trying on makeup on social media, seamlessly integrating AR try-on functionality.
L’Oreal didn’t stop there! They introduced "magic mirror" devices in stores that let you see how makeup looks on you virtually. They've even embraced the metaverse trend, crafting virtual spaces for online customer engagement.
Disney
Disney has embraced digital transformation in its theme parks. Visitors wear magic wristbands equipped with RFID technology through which data is monitored.
These bands act as all-in-one tools, functioning as admission tickets, hotel rooms keys, and even payment methods. Visitors can also customize their bands by choosing the light themes from the given options.
This innovation aims to create a seamless and magical experience for every guest.
McDonald’s
McDonald’s, a fast-food pioneer, has also embraced digital transformation to keep things speedy.
They installed automated systems, such as touch screen kiosks and self-order stations at their restaurants, so that customers do not have to stand in long queues for ordering their meals and provide them with a hassle-free experience.
Is Digital Transformation really required?
Yes, we believe digital transformation is really required. The way customers interact with businesses is rapidly changing with the increase in the number of social media platforms.
As the social media platforms are increasing and more people are moving towards the same, great opportunities are being created. Now, the businesses can find multiple customers at one place and focus more on catering to the needs of their target audience.
So, if you want to reach multiple customers without geographical constraints in your business, then digital transformation is the key.
According to the International Data Corporation (IDC) Worldwide Digital Transformation Spending Guide, to achieve digital transformation and create value based on the use of technologies for processes, products, services, and experiences, by 2027, the global digital transformation spending is forecasted to reach nearly $3.9 trillion with a five-year compound annual growth rate (CAGR) of 16.1%.
Digital transformation allows businesses to offer a seamless experience for its customers by understanding their needs and giving them personalized products and services.
As per Ari Libarikian, Senior Partner at McKinsey & Company, digital transformation is a requirement. It’s not a luxury anymore.
It can also help businesses to grow in the competitive market. To stay competitive, businesses can use digital tools, leverage social media platforms, study market trends, and implement data-driven strategies.
How is SoftEXedge Playing its Role Here?
At SoftEXedge, we use the latest technologies available in the market to develop websites which are compatible with digital marketing.
Our pricing starts from 25,999 INR for the basic plan and goes up as per the requirement of the customers.
We have divided our team in different categories to make the digital marketing work streamlined. We identify the right target audience for our clients to fulfill their purpose more effectively.
We also do comprehensive research on the new Instagram, Facebook and Google algorithms whenever there's a new update to keep the data up to date.
Conclusion
Digital transformation is the process of using digital technologies to change the process of how a business works, deliver more efficient solutions to the customers, capture new opportunities, and compete in the market using new technologies.
Considering the situation of today’s market, digital transformation holds significant importance because it helps in staying relevant, reaching new customers, streamlining processes, and much more.
When business initially starts transition towards digital transformation, the following points are important to consider:
- Set your vision
- Define your goals
- Identify gaps and needs in your business
- Choose the right digital tools
- Understand your customers
- Focus on data security
- Focus on high-impact projects
- Include continuous learnings and necessary training
- Keep tracking your progress and adapting new strategies
At SoftEXedge, we believe that digital transformation is really required because with everything getting digital, it becomes easy for the businesses to find multiple customers at one place. This creates great opportunities to grow and succeed.
Frequently Asked Questions (FAQs)
What is the main purpose of digital transformation?
The main purpose of digital transformation is to improve how a business operates using innovative technologies.
How does digital transformation affect organisational culture?
Using the digital tools, businesses can avoid all the stress of making many errors as the digital tools help in automating the manual tasks. This allows employees to save their time and focus more on planning the strategic work.
How can digital transformation help sustainability?
With relevant digital technology like AI and sensors and digital tools, environmental challenges like pollution control can be tackled in the right way. This can contribute to the well-being of our planet.
How does digital transformation help in compilation?
Digital transformation majorly focuses on changing the process of how a business works and making it digitally strong. This will ultimately help in better compilation and delivering more efficient solutions to the customers.