Digital transformation impacts the way a company operates. A company’s systems, culture, processes, and workflow form the critical elements that determine its success or failure. Embracing digital transformation is accepting to use technology in a synchronized way to bring together data from several elements to enhance efficiency. Taking advantage of advanced processing and workflow automation such as artificial intelligence (AI) can help companies get insights into customer needs in ways that they have never done before. There are several benefits of digital transformation, they include;
Enhanced Data Collection
Many businesses collect a lot of customer data, but the real value is the ability to optimize the data for analysis that can help get the right insights to drive the business forward. DT makes it possible for businesses use collected data to mine insights that are relevant to their business. DT make it possible for the various departments in a company turn raw data into informed business decisions through data analysis. By enhancing insights generation across different functional units, digital transformation helps organizations to have a single view of its customer by understanding the customer journey, finance, production, operations, and business opportunities. It is important for organizations to evaluate and understand the process that is followed when customer data is collected, stored, shared, and analyzed to ensure that best data handling practices are used (Rogers, 2017). Companies must be careful when using customer data, they should ensure that they give their clients more autonomy over their data. Organizations should be transparent and show respect by adopting strong privacy practices to safeguard customer data.
Stronger Resource Management
Digital transformation turns resources and information into tools that businesses use to meet customer needs. With digital transformation, the need for dispersed software and databases is replaced with consolidated resources and information, reducing vendor overlap in the process. Digital transformation enables companies to integrate applications, software, and databases into a central repository that makes it easy for business intelligence (Singh & Hess, 2017). Understanding that DT is not the role of the IT department is important, as it will help firms to clearly know the efforts and resources needed for them to become digital businesses and grab the opportunities in the digital world. Successful digital transformation demands the buy-in from the top leadership and full collaboration of mid-level managers to ensure that everything is done with a single focus, to use resources and information in a way that improves an organization. It is critical to ensure that data is optimized and secured all the time regardless of where it is used. Teams should also be provided with the right tools to accomplish their tasks effectively.
Data-Driven Customer Insights
In this digital age, data is the single most important resource to have. Companies that have the right data can unlock customer insights. Data is enough to provide a competitive edge in the market. Analyzing data can help a company understand its customers, their needs, and preferences and use the insights to become customer-centric (Singh & Hess, 2017). Companies that have invested in understanding their customers continue to outperform those that have not. Thus, organizations need to become data-driven. Firms can use both structured data and unstructured data such as those obtained from social media platforms to get insights that they can use to drive business growth. Using data help organizations to create and use strategies that are personalized and agile, which can easily help increase customer engagement and profits.
A Better Customer Experience
Digital transformation is not only focused on unlocking efficiencies but it also help to deliver better seamless experiences to customers. Organizations that have embraced digital transformation have better email communications, easy-to-use user portals, and innovative digital products and this has greatly made them attract new customers. When it comes to digital experiences, customers come with high expectations. This is due to the exposure they have had in the digital world such as low prices, fast delivery, and endless choices. Brands are now fighting to deliver the best customer experience (CX), as it has huge power to influence customers’ buying decisions. As per a study that was done by Gartner, customer experience in the new battleground for companies (Pemberton, 2022). It is, therefore, necessary for companies to embrace digital transformation as it helps them to deliver amazing and unique customer experiences. One of the best ways that brands can differentiate themselves is by valuing privacy and giving customers control of how their information is collected and used. Doing this makes it easy for customers to trust a brand as they are able to see how companies use their data.
Encourages Digital Culture
Digital transformation promotes a digital culture. Organizations must ensure that their employees have the right tools to get the job done. As much as the digital tools are focused on encouraging better ways for teams to collaborate, they provide the right support needed to digitally advance an organization (Rogers, 2017). For business sustainability, it is a must to adopt a digital culture. The advantage of digital culture is that it forces team members to upskill and digital learn to seamless reap the benefits of DT.
Digital transformation helps firms to improve their profits and efficiency. A research carried out by SAP Center for Business Insights and Oxford Economics found that about 80% of companies that have completed digital transformation enjoyed increased profits (“Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart | SAP Insights”, 2022). 85% of them, say that the digital transformation has helped them increase their market share. On average, leaders of organizations expect digital transformation to help them achieve 23% higher revenue growth than competitors that have not embraced digital transformation.
Organizations that have embraced digital transformation are more agile. Businesses with agility have better speed-to-market and use Continuous Improvement (CI) strategies to ensure that they are always improving and innovating their products and services to meet customer needs (Promsri, 2019). Digital transformation has provided businesses with the confidence to learn from the world of software about the importance of agility and its important in cost reduction and profitability. Agile businesses can innovate faster and adopt clear processes to improve their processes, systems, and culture.
Organizations that have embraced digital transformation have created a better environment for improved productivity. With the right tech tools, the team can collaborate easily and help each other to complete projects in time, hence improving productivity (Singh & Hess, 2017). Integrating data from all functional units in an organization helps to empower team members to work more effectively and efficiently.
Role of IT in an Organization in Regards to Digital Transformation
Information technology plays an important role in helping an organization through its digital transformation journey. Technology powers the digital revolution, and without information technology it will be impossible for an organization to successfully digital transform themselves (Châlons & Dufft, 2017). Some of the critical tools that are enablers of digital transformation include the internet, mobile technology, machine learning, artificial intelligence, computer processing, robots, nanotechnology, and information processers. Thus, by using these technology tools, an organization that is in the digital transformation journey can easily go digital and enjoy several efficiencies.
It is vital for firms to understand that in the digital transformation process, as much as technology is redefining work, communication, customer experience, and every aspect of organizations, technology itself is not the point. The point of using technology is to do things more conveniently, more effectively and faster, and with greater accuracy than before. The point of technology in an organization that is undergoing digital transformation is to help achieve a goal that matters to the organization (Nissen, Lezina, & Saltan, 2018). The technology itself is inessential as it can be replaced. When a new gadget or software that can help an organization achieve its goals in a better way comes to the market, it is adopted and used to replace the old technology. Thus, the technology itself is not the most important aspect of the digital transformation process.
The goal and focus of digital transformation is to help organizations tap into digital opportunities as opposed to helping them do digital. Digital businesses effectively tap the opportunities in the digital age as they are agile, innovative, customer-focused, and competitive. Thus, the role of information technology for digital businesses that is organizations that have embraced digital transformation,is to provide a means by a competitive advantage is delivered (Hsu, Tsaih, & Yen, D2018). Information technology thus, provides organizations with the solutions to their defined problems. Organizations use it to help solve problems that their customers face and in the process get rewarded for their value.
The most important task for organizations that want to benefit from digital transformation is to clearly define and understand the problem to be solved. This is the most important step as it is the starting place for business success. Understanding the problem that customers are facing and creating the best solution in the marketplace is the best way that an organization can win in a big way (Châlons, & Dufft, 2017). Thus, with digital transformation, organizations would be able to perpetually innovate, adapt and solve more problems.
To sum it up, the role of information technology in digital transformation is to provide organizations with the tools to get the job done. Technology, therefore, provides the solutions to the problems that companies are facing. For an organization to be successful with the use of information technology, they have to first and foremost define the problem and understand the context around the problem. To succeed with digital transformation, technology is one of the change blocks that should be considered to attain the desired change. Information technology is the means that organizations undergoing digital transformation use to attain their goals, but what’s more important is what they do with it.
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