In this era of digitization Digital Transformation hardly remains a choice for organizations. It has rather become an inevitable objective of every modern day company. According to studies 55% of start-ups adopt a digital business strategy compared to 38% of traditional enterprises. Another 2017 study by Softchoice revealed that 83% office workers in North America rely on technology to enable them to work with off-site employees in real time where 94% of them need to collaborate with other employees as part of their jobs.
This means we are fast approaching an age where Digital Conceptualization will be a reality over Digital Transformation. That is to say, organizations will have to conceptualize their businesses keeping the Digital adaptability in mind and also taking into account the myriad ways in which digitization might help the business right from the conceptualization stage. Digital tools will become imperative in the smooth functioning of organization structures.
Thus, Digital transformation is the collaboration between technology and business processes. It is no longer optional, but essential. Digital transformation is the overhauling of business processes, systems and even business models to make the best use of the opportunities of digital technologies.
Digital Transformation also means taking a fresh look at a business unit’s or an organization’s approach to business. This needs a rethinking of how an organization uses technology and resources to affect business processes and performance.
How can digital transformation drive profitability?
Companies that leverage digital technology get 10% higher revenues than industry average, are 26% more profitable compared to the industry average of EBIT and Net Profit margin, and are able to increase their value proposition and improve operations by a margin of 79 percent. They also add robust value to their customers.
Some of the benefits of Digital Transformation that lead to higher profitability are:
- Improved efficiency
This is simply a result of increasing workflow efficiencies by replacing manual processes with digital ones.
- Improved customer experience
Customer satisfaction rating increases with Digital Transformation as the processes start working seamlessly to fulfill customer objectives. In fact, customer satisfaction levels are a good indicator for understanding the success of a digital transformation initiative.
- Informed and Quicker decision making
Digital Transformation aids on time information retrieval and this in turn aids better decision making on the part of the business owners. This obviously drives up profitability.
- Boost profitability
Digital transformation can be measured with profit margins. When profits increase, companies have more resources available to implement changes that can improve efficiency and productivity.
- Improved market penetration
Better decisions in the business will lead to higher market penetration and finally to higher profitability. Higher profits also make resources available for implementing changes to improve efficiency and productivity.
In recent years we have seen quite a few organizations losing out to their competitors because they were slow in adapting to the changing scenario of a rapidly evolving business platform that is provided by technology. Polaroid,Abercombie and Fitch, Blackberry, AOL, Xerox, Nokia, Yahoo, Atari, Kodak and Blockbuster were all once big names in their own sphereswho have lost their market to the agility of their competitors.
Kodak, for example, was at one time one of the biggest names in film photography but couldn’t keep up with the digitization of photography and chose to ignore the digital platform to try to keep their film business thriving. Even after investing billions of dollars into developing technology for taking pictures using mobile phones and other digital devices it held back from developing digital cameras for the mass market for fear of eradicating its film business. Kodak even acquired a photo sharing site called Ofoto in 2001 which could have well been the predecessor to Instagram, but again chose to push its users to print digital images rather than innovating on the digital platform itself.
Blockbuster Video, another example, founded in 1985, was one of the most iconic brands in the video rental space, was a Home movie and video game rental services giant. In 2004, Blockbuster employed 84,300 people worldwide and had 9,094 stores. In 2000, Blockbuster had an offer to buy Netflix for US$50 million. The Blockbuster CEO did not take up the offer because he thought it was a “very small niche business” and also, Netflix was losing money at the time. Blockbuster filed for bankruptcy in 2010 and as of July 2017, Netflix had 103.95 million subscribers worldwide, and revenues of US$8.8bn
Digital Transformation is an all-encompassing process that demands almost overturning the processes, workflows and even vision behind organizations; however, when done right it can give companies the big boost they require to remain both relevant and competitive in today’s business horizon.
Checkbox specializes in Embedded Technology, IoT, Mobility Solutions, Blockchain, Data Analytics, AI& Cloud Computing. Checkbox’s experience in technology and business helps in analysing existing processes and identify key areas where technology can drive profitability.
Checkbox partners with clients in their Digital Journey; empowering enterprises in realizing their digital dreams.
Understand:Study current organizational processes and define the transformation objectives
Identify:Identify technology enablers in your domain including defining customer personas, tracking key processes and outcomes that’s could have a significant impact on overall business performance
Envison:Envision the technologies to achieve target business outcomes such as improving the digital customer experience, enhancing the digital workplace, transforming business processes, optimizing infrastructure, simplifying management, and implementing an adaptive cyber-security defense posture.
Execute-Evolve:Design, develop, deploy, manage and continually evolve your digital services via agile, DevOps, as-a-service infrastructure, intelligent automation, personas and context, and finally, digital service management.
Innovate:Capture and analyze data to understand patterns, threats and opportunities. Build a digital strategy that continuously evolves as market understanding, customer preference increases. These data could hold the key to the next digital disruption.