Digital transformation ranks within the top ten business priorities among all industries around the world – for most, it actually makes the top three.
Why are so many diverse companies putting so much emphasis on going digital?
It’s because doing this is an incredibly important step in securing the future of any business from both a preservation and an advancement standpoint.
📊Some Quick Stats on Digital Transformation
Before we delve into why digital transformation is important, it helps to remember some things about what it can do and how far the influence of digitalization, in general, has already spread.
These facts should help convince you that this is something worth paying attention to:
- More and more business is taking place online – Online shopping currently accounts for 15.2% of purchases made globally, and online sales are growing faster than in-house retail ones.
- The people who are buying in person are still looking for digital support – 80% of consumers use their mobile devices to look up information about a particular product online while they are shopping for it in a physical store.
- It’s been proven to pay off – Data-driven (i.e. digital) organizations are 23 times more likely to pull in new customers, 6 times as likely to retain existing customers, and 19 times as likely to be able to improve their revenue as organizations who are still lagging behind in that regard.
- Newer companies are treating it as a matter of course – 55% of start-ups have a digital strategy in place (and probably have right from the start), but only 38% of traditional enterprises also do.
- Leaders know that it’s pointless to resist – 27% of executives believe that going digital is not just something that would be nice to have, but a matter of survival.
Breaking Down the Impetus For Change
Given the above, it’s clear that things are trending toward digital in the world at large, but it’s not immediately clear what is driving that development.
There are three primary things that are pushing a successful digital transformation to the top of most companies’ to-do lists right now: customer experience demands, ecosystem-induced pressures, and technological shifts.
The Customer Experience is King
Every business lives to give their customers what they want, and these days that means more than just offering a quality product or service. You also have to pay attention to the process through which your prospects browse your offerings, access your customer service, and ultimately buy your products.
These things make up the phenomenon known as the customer experience, predicted to be the key thing that consumers will look to in order to differentiate brands from each other in 2020.
A company’s level of digital sophistication has a lot to do with how much they can offer in that department. With enough data to work with, a program can analyze a person’s behavior while on your website and determine what it is that will appeal specifically to them.
It can then send out marketing emails showing off exactly the type of products that a particular lead is interested in and create a coupon code to further pique their interest. If they put any items in their virtual cart and leave without purchasing them, it can send reminder emails to get them thinking about purchasing again. It can even show them items that many people with similar profiles bought in addition to their target item, making them aware of accessories and add-ons that they might also enjoy.
These small touches make customers feel valued and communicate that you are a company that is forward-thinking and willing to make investments to better serve them.
All of this is important from the standpoint of simply meeting customer expectations, but it should also have some pleasant side effects for you regarding your overall revenue.
Customers who are treated to a great personalized experience tend to be much more lucrative for a business than ones who are left to their own devices when shopping;
40% of them have bought something more expensive than what they had planned to purchase because of personalization, while 49% bought something extra and 44% were convinced to shop with that business again in the future.
In other words, customers who are catered to in this way buy more from you when they visit you, and they keep coming back for more over time.
This makes perfect sense from their point of view:
if a business can get you what you want and even suggest other products that you end up also enjoying, why not stick with them?
It’s a convenient solution for them and a wonderful opportunity for extra profits for you.
Ecosystem-Induced Change: What Happens Around Your Company Affects It As Well
In a real-life ecosystem, all of the flora and fauna in one specific region depend on one another to thrive. Each individual piece is influenced by all the other activity going on around it.
If something changes, one species may die out, or it may adapt itself rapidly enough to survive in the new environment in which it finds itself. When we speak of digital transformation being ecosystem-induced, we mean that it is prompted by external developments that make it hard to continue operating without taking that plunge.
One of the best industries to examine as a demonstration of ecosystem-induced digital transformation is the healthcare industry.
Due to the high cost of providing medical care for patients, the industry is under a lot of pressure to digitize as much as possible in order to save money through increased efficiency.
At the same time, healthcare is also often being talked about in the context of the evolution of new laws governing how consumers’ data must be handled.
Because digitalization is such a new concept, lawmakers are just starting to understand that personal data of any kind can be incredibly sensitive and must be safeguarded carefully.
If any of those laws are ever made into a reality, it may actually not be legal for health data to be stored in a non-digital form (following strict guidelines, of course). These two factors make it hard for health care companies, in particular, to put off digitization for much longer.
Every industry faces similar sorts of pressures from outside institutions and their own sub-optimal budget numbers; it’s just a matter of when they will become strong enough to force action.
Another ecosystem factor that often gets overlooked is the potential for collaboration with external groups.
This type of strategy has been key to the success of many big-name brands such as Paypal, and it has a lot of potential for use in smaller companies as well.
Depending on your specific business and its needs, some of the groups with whom you might collaborate include:
- Competitors (yes, sometimes it’s to everyone’s advantage to do so)
As one of the parties in such an arrangement, your company would be responsible for properly handling data and possibly handing out some of your own.
Implementing this type of strategy successfully requires a digital transformation that is done with care and pays attention to every facet of the process – for instance, it will be imperative that you keep your data quality high so that stays reliable and coherent enough to provide useful information.
However, those who pull it off will have far more knowledge at their fingertips, and with that will come many more opportunities for growth and change.
Related : What is contact data quality management?
The Influence and Power of a Digital World
The final major reason to prioritize making a digital transformation within your company is to keep up with what is happening in your industry and to get ahead of the innovations that are sure to come.
Postponing your decision to go digital will not freeze time.
When all your peers start to adopt modern technology and use it to its fullest potential, the landscape in which your company exists will change as well.
Even if you think you would prefer not to capitalize on this opportunity for the time being, however, you should be aware that you’re really only delaying the inevitable. At a certain point, you’ll no longer have any choice about digitizing your enterprise if you want to remain competitive with the businesses around you. If you don’t move to bring in technology and create an experience that is up to the standards that your peers have set, your customers will flock to those other companies instead.
Once you’ve decided to go ahead and start moving in a digital direction, though, you can stop thinking about what you might lose if you fall behind and start looking at what you can gain by forging ahead. If you get started on familiarizing yourself with the capabilities of new technology right now, you’ll soon get to the point where your business can start to think about creating novel applications for these new tools.
This is where you can make the kinds of advancements that will truly put your company on the map. Perhaps the best example of a piece of technology that can make a profound difference to a company’s operations is artificial intelligence or AI.
Related : Getting ready for AI
There are 450% more jobs out there that deal with AI right now than there were in 2013, and there will only be more created as time goes on. Each one of those positions is representative of some companies' attempt to get the remarkable power of this innovation on their side.
Many organizations are using AI systems right now to carry out sales forecasting, automated marketing tasks like sending segmented emails, and basic customer service interactions on a 24/7 basis, and that’s only what it is capable of doing right now.
If you don’t conduct your digital transformation soon, you’ll be missing out on all of these benefits and many more to come.
Where Will You Feel Digital Transformation’s Impact?
Digital transformation has the potential to impact just about every part of your business, but you’ll see its effects more clearly in some parts than others.
The biggest difference is likely to be seen in your daily logistics; 61% of the average knowledge worker’s workday is currently devoted to tasks like administrative upkeep and attending meetings, things which can largely be automated or streamlined when going digital.
Beyond that, you'll notice positive changes in your:
- Customer experience – As we’ve discussed, going digital enables massive improvements to your customer-facing activities.
- Marketing and sales – Digital methods are supremely important in this field and will help you find out what really drives your customers, allowing you to target those critical points to sell to them.
- Risk management – Advanced analytics can help you to choose only the safest paths of investment for more reliable returns.
- Supply chain management – Digital systems can be automatically updated upon encountering changes, meaning that you can update your fulfillment processes in real-time and keep your stock as high as you need to regardless of how many orders you get.
- Human resources – With digital methods in place, you can keep better track of your employees and offer them more ways to contribute to the organization, such as teleworking.
This is just the beginning of what our collective digital evolution will allow companies to do, too.
Many in the field believe that machine learning systems will soon become capable of more complex tasks like product development and providing your customers with service that rivals that of a human staff member in quality at any time they wish.
Companies are finding new ways to put their digital systems to work every day, and those that do it first will have a massive advantage.
With powerful technology, good data to feed it and knowledge of how to use it, the sky’s the limit – but that type of business environment can only be found in an organization that has fully digitally matured.
As always, though, you can join us right now to get more guidance on Digital transformation and similar data-related business tactics right away.