What Is Digital Transformation? And Why is It Critical To Your Business?

Posted on Mar 19, 2019

Today, we're going to take an in-depth look into the dominating concept of "digital transformation," and why implementing it into your business is no longer an option, its a requirement.

First, let's take a look at what defines "digital transformation."

According to Wikipedia, digital transformation is…

...the novel use of digital technology to solve traditional problems. These digital solutions enable inherently new types of innovation and creativity, rather than simply enhance and support traditional methods.” [link]

So now that we know what it means in at least a fundamental sense, how can it be applied to a particular business environment?

First off, it's important to remember that the concept of digital transformation runs both deep and wide. 

On the most basic level, however, digital transformation is all about how a particular business connects with its customers by leveraging technology to its fullest potential. In doing so, the interaction becomes far more efficient and hopefully, more productive.

There are two aspects to keep in mind to fully understand this wide-ranging concept:   

  1. The elements of digital transformation that directly involve the customer.

  2. The “behind-the-scenes” aspect that that streamlines the internal workings and efficiencies of the business.

By harnessing technology on a constant, steadily upward-trending curve, businesses can dramatically improve their operations, speed, and efficiency. While at the same time, it can ward off the ever-looming threat of rapid disruption. 

For example, consider what Uber has done to the ‘old-school' taxi industry that thrived for well over a century, in just a few short years.

While digital transformation isn’t at all new, it’s evolved quite rapidly in recent years due to innovations such as cloud computing, Internet of Things (IoT), blockchain technology and Artificial Intelligence (AI)

Because these technologies have now spilled into the marketplace and no longer reside in R&D labs and university campuses, digital transformation is sure to spread even faster than ever before.

How does a business get on the right track with digital transformation, anyway?

Most experts agree that the best place to start in its implementation is by looking after the customer.

Look for solutions and innovations that will immediately affect your customers' overall experience. Because once that happens, everything else involved in the implementation process becomes more natural.

What's more, when your customers readily see that your business is staying on the leading edge tech-wise, they will remain confident in continuing to do business with you. Why? Because they’ll be more at ease knowing that your business will by default keep them on that leading edge as well. 

Better yet, by showing your customer that you can improve efficiency for them, while in essence reducing costs and dependency on other vendors or providers, their loyalty should increase as well.  The more tools and capabilities that a business takes on to adequately satisfy their own digital transformation needs, the more of a ripple effect that it will create with its customers.    

Since many companies have other businesses for customers, this means that they will see efficiency and processes improve. Then, in turn, they will determine how they can best apply those improvements when dealing with their customer bases.

While there is tremendous potential in applying digital transformation to a business, there can also be some risks. 

For one thing, it can be easy to fall into a perpetual trap of implementing various initiatives in an ad hoc manner. While some efforts may be beneficial, others may only muddy the waters, or cause unnecessary layers of issues. Proper planning is critical to successful implementation.

It's important to remain focused on ideas and trends involved in digital transformation that will readily improve your business with little or no risk. 

One example would be cloud computing technology. Though the concept of cloud computing has been around for well over a decade, smaller businesses are only now getting a grasp of how it can dramatically improve their business efficiency, especially over the "old-school" client/server setups that most companies have been utilizing over the last 30 years or so.

Other concepts, such as IoT, may not yet be readily adaptable for many types of businesses. That fact underscores the inherent challenge that lies in effectively implementing digital transformation. It's important not to get lost in initiatives that may not deliver tangible benefits, and in fact, may only increase costs and/or reduce efficiency.

Here are some substantial questions to ask when it comes to considering appropriate solutions that involve digital transformation:

  1. Will the implementation of a particular solution address a specific aspect of your business, such as cost-reduction, increasing revenue, or improving customer experience?

  2. Will implementing digital transformation solutions allow you to offer products or services to your clientele that you may not be able to provide now?

  3. How are your competitors implementing a particular technology in a way that you can determine if it will work for you?

Use these as a starting point to determine your business' own custom-tailored digital transformation strategy. Then, only continue to develop new questions to get answered as you go along.

TIP: When it comes to gauging the benefits of digital transformation, data is critical!

Be sure to track cost-benefit data, efficiency ratings, KPI’s and other indicators that will help give you an adequate picture of how well digital transformation is working for the business. Over time, the trends and benefits will become readily apparent, especially if you’re continuously implementing solutions as they become available. 

Another strategy is to look at how the "big players" are implementing their own DT ideas to determine solutions that may work for your business. Google, Microsoft, Amazon, and even Facebook are continually testing new models and concepts that can be readily adapted by even the smallest mom-and-pop corner businesses. The key is to determine which technologies and tools will have the most benefits.

Need help in determining a digital transformation strategy that will directly benefit your business? The professionals at A&A Office Systems can help! 

With our cloud computing, data services, office technology solutions and other innovations, we’ll help you determine how to best benefit from digital transformation. Best of all, in a way that will boost your bottom line, while improving customer experience. 

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