Benefits of Digital Transformation
Digital Transformation has become a hot buzzword in the business world. Influencers describe the benefits and how organizations who don’t transform digitally will be left behind and outstripped by competitors. But what exactly is Digital Transformation?
What is Digital Transformation?
The Enterprisers Project describes Digital Transformation as, “Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.”
Essentially using modern, digital tools to find more efficient, data-driven ways of getting things done at every level of business for a positive impact to operations and service delivery. This can extend to multiple facets of an organization or just involve modernizing one aspect that is so pivotal that is completely transforms the business.
Here are a couple examples to illustrate what an impact restructuring business processes around digital technology can have.
Examples of Real-Life Digital Transformation by Industry
Banking / Financial Services: Think about the example of a traditional bank moving to online-only or online-focused. They can offer reduced cost for customers in multiple areas with self-service banking, mortgage applications, self-directed investment options while freeing up the time for their financial advisors to meet and actually advise people rather than filling out paperwork, processing, requests, and other tasks that can be automated or self-directed.
Insurance: Insurance companies often run on older, manual processes for filing, assessing, and approving claims. These organizations can leverage modern technology to streamline processes and offer better customer service. They can do this via self-service portals for support and tracking claims, allow customers to submit claims via mobile app, automated approvals and checks, and integrating with other systems. Basically, analyzing where there are manual touch points in their current workflows and seeing what can be automated or digitized to reduce work required and get claims processed faster.
Manufacturing: Digital transformation in manufacturing can include integrating IoT sensors and devices for real-time tracking of manufacturing, automating manual processes such as inventory control and re-stocking, and using data analytics to identify inefficiencies in the supply chain for further enhancements.
Agribusiness: Agriculture businesses are taking advantage of all sorts of new digital tools to enhance their output and improve processes. This includes precision agriculture technology that can revolutionize how crops are monitored, IoT and sensors in fields, drones, and advanced robotics to improve productivity and reduce the time required for spraying and other tasks.
Non-Profit: Digital technology can facilitate member renewals, provide a more intuitive platform for launching fundraising campaigns, notify donors when their donation is being used in some cases (Canadian Blood Services), and a whole host of other benefits. It can provide a huge ongoing organizational benefit to non-profits who often have tight annual operating budgets.
These are just a handful of examples to demonstrate the wide-ranging effect digital technologies working together can have on different types of businesses. Of course, not all organizations will be able to leverage digital tools the same way but there is a pattern of typical benefits businesses can unlock by using digital technology to revamp processes and provide more value to customers and staff.
Advantages of Digital Transformation
Eliminating Time-Consuming Manual Processes via Business Process Automation
One of the major advantages of digital transformation, is eliminating tasks that unnecessarily waste staff time. By implementing digital technology, you can use software to perform the tasks that were previously being performed manually by staff. Business Process Automation is often seen as the stepping stone to a more holistic digital transformation but it can also be one of the outcomes.
Some key areas digital technology can be used to reduce manual labour:
- Customer data collection
- Email and push notifications based on triggers
- Account changes
- Update to services
- Status updates
- Tech support ticket creation
- Time tracking
The true value comes from connecting these tools to be able to work together to streamline processes for high-volume repeatable tasks, with greater accuracy, and reduced cost as there is less of a need for staff to get involved.
Example of automating an employee onboarding process:
Increasing Customer Satisfaction via Improved Customer Experience
Automating these tasks also improves customer and staff experiences as they’ll see much faster turnaround times when they have an inquiry. One of the advantages of digital transformation, is enabling customers to access your services and support via their preferred method of interaction.
By leveraging digital tools, you can enable omnichannel support, allowing customers to reach out via phone, website live chat, email, mobile app, or through a support forum. By keeping it all digital, companies can provide multiple touch points, track interactions, and facilitate follow-ups and feedback gathering from customers.
Similarly, organizations can use digital tools and processes to make it easier for customers to gain access to their services via ecommerce, mobile platforms, social media, and other digital avenues. Not only do customers get the benefit of accessing services via their preferred channel, businesses can suggest other related offers, products, or services using the data attached to their accounts.
These are processes that can be built and refined once a business is managing these aspects through digital technology and can be refined based on your actual customers’ experience.
Drive Efficiencies and Improved Decision-Making Through Real Time Data Collection
Software-focused, digital processes open up a level of visibility into what is working well and what can be improved. With all data being housed digitally, often in real-time, it makes recognizing patterns and identifying opportunities for enhancements much easier.
Central data repositories can be mined to gain insights on where there are bottlenecks in workflows, which issues resurface the most, employee performance, customer preferences and behaviour, and many other areas. Once a business is using digital tools and develops processes around them, they are much easier to produce reports on and pinpoint areas for improvement as opposed to traditional surveying, sampling, and manual feedback collection.
Companies also drive efficiencies in their supply chain by integrating digital tools at each stage of development to service or product delivery. This can be as simple as tweaking existing processes to include a digital checkpoint or as advanced as automating processes and monitoring the output at each stage via IoT devices.
More data typically leads to faster, more accurate decision-making.
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Gain Flexibility and Scalability
A major advantage of digital transformation is breaking free of restrictive legacy systems and leveraging modern, scalable alternatives. Existing processes in businesses are often based on old technology which requires manual input – creating bottlenecks when workloads spike. Some manual processes simply won’t scale as more and more employees need to process claims, service requests, provide support, or complete other business functions.
Modern software and processes are often easier to integrate so you can connect various parts of your business rather than ‘siloing’ data by department or function. When a task is complete, modern systems can often connect the data or next item to push it forward to where it needs to go – without manual intervention.
Transforming businesses to operate digitally, also allows those organizations to remain nimble and be more responsive to innovations and trends in their market.
Enhanced Reliability and Reduced Risk
As organizations continue to grow, the technology and processes that they’ve relied on for your years can start to fail them.
From a technical standpoint, it can be harder to backup, maintain, and protect data within older systems. This can make them more prone to failing or an easier target for cyber criminals.
From the McKinsey report, Digital risk: Transforming risk management for the 2020s, they claim: “improving the efficiency and effectiveness of current risk- management approaches, digital risk initiatives can reduce operating costs for risk activities by 20 to 30 percent.”
When hiring, if your existing business processes and operations are based around legacy technology, it can be difficult to find professionals with the right skillsets to maintain them. By upgrading to modern digital tools, you’ll have a larger pool of applicants with the right experience to be able to support them properly.
451 Research recently released a report, Managing Risk through Digital Transformation, which states “Nearly half of respondents (49%) said that securing customer data is one of their main digital transformation objectives.”
Benefits of Digital Transformation
Now, while the benefits of digital transformation listed above (automating repeatable tasks, increase customer experience/satisfaction, driving efficiencies, flexibility, reduced risk) are all things most businesses want to achieve – it’s important to keep your specific business and objectives in mind.
What do you want to achieve through digital technology that you can’t do today? What problem areas are you looking to fix? What value do you want to provide your customers that your current processes and technology aren’t allowing?
Approach your digital transformation journey strategically with your end goals in mind. Then, chart your course to get there.