Digital transformation has been a buzzword for years and every year, pundits declared that this was the year of digital transformation.
IDC predicted in late 2018 that by 2020, at least 55% of organizations will be digitally determined, transforming markets and re-imagining the future through new business models and digitally enabled products and services. For many businesses it has been something to think about but there was no real rush to get themselves digitally transformed.
The COVID-19 pandemic forced a hard re-think of how organizations do business. What worked before would not work going forward. Not only did the pandemic force businesses to re-imagine how they marketed, sold and delivered their goods and services, customers and employees are now looking for businesses who have adapted to the new realities.
But what exactly is digital transformation? More importantly, why is it so vital to SMBs now more than ever?
What “Digital Transformation” Means
If you search the Internet for the term “digital transformation”, you will find numerous definitions of it. The definitions vary widely, so it can be hard to quickly learn what digital transformation is all about.
To understand what is meant by the term “digital transformation”, it is helpful to know what it is not. If a company simply moves applications to the cloud, upgrades its IT infrastructure, or implements some other one-off IT project, it is not digitally transforming itself.
Digital transformation involves more than just adding new digital technologies to business operations. It requires a company’s leaders to rethink how the organization does business at a fundamental level — how they can achieve their business goals by leveraging digital technologies in processes throughout the organization. Sometimes, companies are able to effectively integrate new technologies into existing processes. More often, though, they need to design new processes.
Digital transformation usually involves a re-thinking of how a business uses technology, people and processes to change their performance and business outcomes. These changes are typically driven by changes in customer expectations, competition and regulatory requirements. What we have seen over the last several weeks is that a pandemic not only drives the changes, it accelerates the changes due to necessity. However, make no mistake, this is an ongoing process as we know things will be different going forward but we do not yet know all of the impacts of the pandemic.
The benefits reaped from a successful journey are enticing. They include:
- Improved customer satisfaction
- More efficient operations
- Improved decision making
- Increased agility and innovation
- Happier, more productive employees
Realizing these benefits ultimately leads to better business performance overall and increased profitability.
The Types of Digital Technologies Companies Are Using
While each company’s digital transformation is unique, businesses use many of the same types of digital technologies. For example, they use Internet of Things (IoT) devices to collect and process data locally. To respond to customers’ online requests for information, they turn to chatbots. They also use other forms of artificial intelligence (AI) to connect and communicate with customers.
Digital transformation can be disruptive but in the current situation it is not only beneficial but a strategy that will help your business thrive going forward.