What is Digital Transformation?
By:
Eastern Eye Staff
A strategy to reinvent businesses around the globe, Digital Transformation no longer remains a choice but has become a necessity to survive. When choosing between innovation or extinction, you know what’s the right choice to make.
Digital transformation is about creating an entirely new business model and redefining the entire business strategy on the backbone of technology. For example, Amazon has entirely changed and revolutionized the entire concept of shopping. It may also be able to change the corporate culture in the business. To succeed in this, businesses should not consider digital transformation as a support function but as a strategic competency.
It is now crucial for businesses to adapt and take advantage of how the digital world has radically changed consumer behavior and expectations. According to the statistics, e-commerce is growing by 23% every year. About 67% of the Millennials, 56% of the Gen-Z, 41% of the Baby Boomers, and 28% of the other seniors prefer to shop online rather than in stores. Even 55% of the B2B buyer expect mobile access to sellers’ e-commerce platforms.
Now every business should adapt to digital transformation, as their customers, channels, and competitors have already gone digital. Currently, mobile devices dominate the total minutes spent online, searching, reading emails, browsing, and buying. Therefore, businesses that do not want to lose their customers and do not want to head towards extinction should now adapt to digital transformation.
What is Digital Transformation?
- Digital transformation integrates digital technology in all business areas to transform the existing, non-digital business processes and services to meet the evolving market and customer expectations.
- This will completely change or alter how a business is managed and operated and how the value is delivered to the customers.
- It will involve experimenting with new technologies and rethinking the current approach to common issues.
- It can be thought of as continually adapting to a constantly changing environment. This could mean continuously seeking ways to improve the end-user experience for businesses.
Drivers of Digital Transformation
Digitalization entered the market a while ago, but some drivers led to a rapid digital transformation, 2 of which are discussed below.
Disruption by Pioneer Companies
- New technologies are entering the market and making information available in new ways through mobile devices, social media, IoT, cloud computing, etc.
- Companies like Amazon and Netflix adapt these technologies and snatch their competitors’ market share by reinventing their business models, optimizing processes, and providing an improved customer experience.
- Customers expect to conduct all business digitally, from anywhere, with any device, with all the information and content they need.
These activities are forcing businesses to adapt to the digital transformation. You can learn more about this from Simplilearn online bootcamp.
COVID-19
- During the COVID pandemic, consumers have moved dramatically towards online channels for shopping, food delivery, work from home, etc., and businesses have also responded.
- The survey results confirm that there has been a rapid shift towards interacting with customers through digital channels.
- In just a few months, COVID-19 has brought about years of change in companies of all sectors.
- The share of digital or digitally enabled products in their portfolios has accelerated by a shocking seven years.
Why is Digital Transformation Important?
- There may be different reasons for an enterprise to take up digital transformation, the most likely reason is to survive. The companies that haven’t changed their traditional ways of business are far more likely to become extinct or end up in losses.
- During the time of the COVID-19 pandemic, customer expectations changed drastically, which caused disruption in the supply chain and also created pressure in the market. The organizations that were able to adapt quickly to these changes benefited from the pandemic.
- Now the digital transformation is a centerpiece of operational efficiency and innovation across organizations. It is being used to automate the business processes to create an intelligent workflow that increases productivity and serves the customers better.
- Also, the technology uses the data to forecast the trends and the changing behavior of the customers, which helps to prepare the organizations for any upcoming disruptions and also helps to deal with the changes effectively.
Examples of Digital Transformation
BFSI
- Banks and financial companies have adopted digital transformation to deliver faster and hassle-free financial services to users.
- Now users can conduct instant paperless transactions such as Unified Payment Interface (UPI), Net Banking, etc.
- They have also adopted technologies like blockchain, biometrics, and OTPs to improve their security and make transactions more transparent.
e-Commerce
- e-commerce has changed the way of shopping. Now the majority of people prefer to order things online without taking the hassle of going to the stores.
- Increase in online food delivery after the COVID-19 lockdown. This has increased the sales of the restaurants and food outlets.
- e-commerce companies are using technology to predict buying behaviors and running ads for the product that the customer is searching for to improve sales.
Media and Entertainment
- Traditional TV has been replaced by on-demand entertainment.
- The OTT (over-the-top) service providers are currently the most preferred in the entertainment scene.
Hospitality
- Tech-driven offerings in the hospitality sector are online booking of hotels, flight tickets, mobile check-ins, biometric-based access to rooms, automated kiosks, etc.
Benefits of Digital Transformation
Some of the benefits that the organizations have seen with digital transformation are:
Better Decisions
- Digital transformation is different because of the extreme importance of data, which includes data about customers, competitors, supply chain, and market.
- Having all of this data and knowing how to use it can help businesses make better decisions, out of the shadow of opinion and guesswork.
- It brings intelligent options into the light so that the business can do new things in the right way.
Equal Opportunities
- Digital transformation provides low-cost tools and strategies that enable small and medium-sized businesses to compete with major enterprises.
- It has the potential to level the playing field.
Digital transformation totally depends on data, and data depends on effective collection, cyber security, analytics, and application. The companies may have to outsource, hire or train the professionals for collection, protection, analysis, and utilization of data, as it will help in implementing a successful data transformation strategy. Digitally transforming means changing everything from corporate strategy, business process, marketing capabilities, roles and skills required, etc., and therefore data plays a huge role in its success.
