Digital transformation is, in fact, nothing new. Businesses from all industries have been gradually turning to technology and modern software solutions to enhance their products and services portfolio, digitize their data, optimize their processes, and cut their operational costs.
For quite a while already, it seemed inevitable that to stay ahead of the competition and meet the customer needs, companies and organizations from virtually every sector would have to go digital. If not by offering digital solutions to their clients, or introducing software for their staff, then at least by being present online.
But in recent months, the digital transformation train has been going full speed ahead. The 2020 coronavirus pandemic shook up the global economy, and many organizations that have been putting off their digitalization, now rush into digital solutions.
Digitization, digitalization, or digital transformation?
The three terms are often used interchangeably, but they’re not the same.
What is digitization?
Digitization is the simplest, straightforward term.
“Digitization is the process of changing from analog to digital form, also known as digital enablement. Said another way, digitization takes an analog process and changes it to a digital form without any different-in-kind changes to the process itself.”
– Gartner’s Information Technology Glossary
If you scan a book, you digitize it.
If you replace the holiday requests at your company with electronic forms, you digitize them.
What is digitalization?
Digitalization goes deeper. The term stands for introducing impactful changes to an organization, ones that have the power to transform its company culture, communications, or business operations — even their business model.
Like those that the coronavirus pandemic has brought to many companies, transforming their daily office life into remote collaboration with both colleagues and clients.
Here’s how Gartner defines digitalization:
“Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.”
– Gartner’s Information Technology Glossary
If you used to run a furniture shop in the city center, but have opened an online store and now ship your furniture worldwide, that’s digitalization.
If you used to host meetups at your headquarters, but have started to organize webinars, that’s digitalization too.
What is digital transformation?
Digital transformation is a bit of an umbrella term for the conjoint digitization and digitalization efforts within an organization, but most of all, it reflects a company’s mindset. The drive to optimize and grow by means of modern technology, from software solutions through cloud computing to big data.
Gartner puts it this way:
“Digital transformation can refer to anything from IT modernization (for example, cloud computing), to digital optimization, to the invention of new digital business models. The term is widely used in public-sector organizations to refer to modest initiatives such as putting services online or legacy modernization. Thus, the term is more like “digitization” than “digital business transformation.”
– Gartner’s Information Technology Glossary
If you take your customer service online (using, for instance: contact forms, emails, audio and video chat, chatbots), that’s digital transformation.
If you stored your company data locally, but have moved to the cloud, that’s also digital transformation.
Confusing? It is, a little — as there still seems to be some disagreement or disorientation on the subject even among the experts. But by now, you should be more or less able to sense the difference between these three terms, and — most importantly — have an idea of the benefits going digital may bring to your business.
Let’s have a closer look at the benefits.
Read: What Is a Digital Transformation Strategy? 4 Essential Principles
What exactly lies behind going digital?
The answer is: going digital can mean many things. From introducing simple digital improvements that make daily work more efficient, such as replacing paper forms with e-forms or managing your company calendar online, through storing your data in the cloud or implementing marketing automation software, to advanced digital solutions like artificial intelligence-based chatbots or the Internet of Things (IoT).
But one thing for sure, it doesn’t mean diving headlong into all of the trending technologies at once. You don’t have to have them all to gain profit. You have to have the right ones. Selecting optimal solutions should always start with a thorough audit of your company’s current situation. Once you know the pain points and bottlenecks, you can look for improvements. Review all the options, and only then draft a plan for implementing suitable digital tools step-by-step.
If you need assistance in your digital transformation process, you can always reach out to us. We’ve got stellar IT consultants and software engineers on board.
Benefits of digital transformation
Modern technology can transform your business inside and out, improving both the internal workings in your company as well as your portfolio of products and services. Automated processes, remote access, lower costs, data-driven business decisions, increased sales…
Sounds good? Read on.
10 benefits of digital transformation:
- Optimized business processes
- Remote access to data
- Increased productivity
- More transparency
- Reduced cost of infrastructure
- More data (and better data)
- Better customer experience
- New or improved products and services
- Increased sales
- Space for innovation
1. Optimized business processes
Imagine the time and resources you could save by replacing recurring tasks that your team members perform on a daily basis. Sending multiple emails to leads and customers, responding to support tickets, processing orders, invoicing, but also tracking the attendance, answering the requests, or handling the payroll — these are just a couple of processes that you can successfully automate using either off-the-shelf or custom software.
2. Remote access to data
Having your work documents at hand when you’re out of office? That’s already the reality. It has become a necessity in times of social distancing and remote work, but even after the pandemic is over, the remote work trend is unlikely to reverse. It’s best to prepare in advance and look for solutions that prove optimal in the long-term. By moving your company data to the cloud, you gain access to it wherever you are — as long as you’re online. You can edit your files, share them with your coworkers, collaborate in real time, and it’s all secure. There’s plenty of cloud solutions to choose from, many delivered by tech giants such as Google, Microsoft, Apple, or Amazon, to name a few.
3. Increased productivity
With the mundane tasks delegated to software, your crew gains precious time that they can devote to more important matters. To things that they love doing and specialize in, things that help them grow — and help your business grow. And remote work? Even though not everyone is cut out for working from home (and not everyone can do it), the possibility to work remotely when needed or preferred makes it easier for employees to maintain their work-life balance.
4. Easier collaboration
By keeping your documents and files in the cloud and using project management software to organize your tasks, you enable real-time collaboration online. With your teammates on the one hand, with your clients on the other. These solutions also increase transparency as to who is doing what and when exactly — and, of course, it’s not meant to encourage micromanagement, but to facilitate teamwork. More often than not, it’s easier to look up somebody’s project board online than bother them with questions.
5. Reduced cost of infrastructure
Another advantage of implementing cloud solutions is that they are far more scalable than traditional, on-site architecture. You don’t have to worry about buying and maintaining the servers, quickly purchasing more or turning some off when the circumstances change — for example, when the traffic on your website or in your online store suddenly increases. In such a case, you just buy extra cloud storage and get access to it almost instantly. This allows you to pay only for the resources that you really need and use at a given point in time.
6. More data (and better data)
They say data is the new gold, and just like gold — it has to be properly processed to gain value and bring profit. Implementing big data solutions is exactly that: analyzing and segmenting large volumes of data. Don’t let the information about your customers just flow around the internet, make it work for your advantage. By unleashing the potential of the data that you gather, you’re setting yourself in the position to make educated, data-driven business decisions. These insights will, for instance, allow you to adjust your offer and customer service to your target audience’s expectations.
7. Better customer experience
Simple as that: more data and better data will help you to answer the needs of your customers even better. Solid data analysis will give you priceless insights into their behavior on your website and their preferences, and thus, help you to improve it. Are people dropping off at the last stage of their journey and abandoning their shopping carts? Is nobody signing up to receive your brand new ebook? Or do visitors just seem to ignore your contact form? What could possibly be causing that? Properly processed big data will give you answers to these and other questions so that you can improve the UX of your web or mobile platform, even your customer service in general.
8. New or improved products and services
You can turn the insights gathered from data analysis into additions or improvements to your portfolio of products and services. Maybe you need to boost the performance of your e-store, work on its mobile version, or add more payment options? Or maybe your customers are counting on you to enrich your offer with a new color version of your product? Maybe they’d like to be able to buy matching accessories? Knowing answers to these questions will most likely quickly result in an increase in sales.
9. Increased sales
That’s right! Data-driven improvements translate into better user experience, better customer service, better sales channels, and better offer. Combine them with optimized business processes and your team at the top of their game, and you have all the bricks to pave the road to success. Of course, digital transformation doesn’t happen overnight, and you need to be ready to invest time and money into making it work, but in the long run, the profit may be well worth the effort.
10. Space for innovation
Once you’re familiar with technology and become a part of the digital world, you may as well feel confident enough to revolutionize your business vertical with a groundbreaking product or service. Innovative technological solutions are born every day: from AI-powered chatbots and voice assistants at your service to virtual dressing rooms enriched with Augmented Reality for a lifelike experience. The sky is the limit!
Don’t hesitate to reach out to us for advice in Research and Development or help with software engineering. Keeping our fingers crossed for your digital success!