What is Digital Transformation?
The sudden shock of the global pandemic reinforced the need for a digital world. From connecting with people to running day-to-day business activities, the world had to pace up to transform digitally. Despite being an urgent requirement, businesses still remain clueless about digitalization strategies and digital business transformation.
Let’s take a deeper look at how business transformation takes place with digitalization strategies.
Graph heading: Digital Transformation spending growth forecast worldwide by sector in 2020, pre and post COVID-19
Defining Digital Transformation
Leveraging the cutting edge digital technology into a business model to modify business processes, culture, and customer experiences in order to meet changing business environments and requirements digitally transforms a business. Digital transformation adapts to the current needs of the market and transforms the way businesses operate and deliver value to customers.
The focus point of most digital business transformations has been the customers. Whether digitalization is adopted for record-keeping or to track consumer behavior, the central agenda is to improve the end-user experience to gain a loyal customer base.
The importance of digital transformation
The evolving business environment demands a dynamic and predictive method that helps enterprises and organizations strive. Digital transformation helps businesses to improve the way they function and operate. It assists organizations in being more agile and flexible in a fast-paced business environment.
The advantages of taking a plunge into digital transformation:
-Enhances Productivity: Technology has been transforming businesses for good. Over the years, it has helped enterprises increase employee productivity while keeping the costs of training minimal. Digital transformation lets organizations upskill their employees at cost-effective prices.
-Improves Customer Experience-The modern-day customers expect a real-time experience via multiple touchpoints like apps, emails, social media platforms, and virtual chats. They demand immediate resolutions to their queries and problems. Digital transformation strategies focus on fulfilling these needs, thereby improving customer experience.
-Accelerates business growth-Taking a leap towards the digital revolution makes businesses flexible and adaptive to the dynamic market scenarios.
The digital transformation framework
The transformation process may differ depending on the industry's demands and challenges; there is still a common thread that binds the entire procedure. Business leaders should keep in mind these common themes as they embark on a digital journey. The essential elements of digital business transformation are:
1. Customer experience
2. Operational agility
3. Culture and leadership
4. Workforce enablement
5. Digital technology integration
Impact of Covid in digitally transforming businesses
Covid-19 disrupted the way we were living our lives. The world that was always on the move suddenly came to a total halt. With the world in a complete lockdown, everyone struggled to keep businesses going. The fear of the virus also made people uncomfortable with interactions and direct contact. This pushed organizations, big and small alike, to explore the opportunity to go digital-be it setting up a virtual work environment to shift to a remote work set up or make contactless payment more accessible and scalable.
Organizations, especially SMEs swiftly grabbed the digital nuances to accelerate their business growth in the pandemic world. The change that may have otherwise taken a couple of years happened almost overnight, courtesy of the deadly virus and its implications.
The Digital Business Transformation Strategy
To aid businesses through the power of digitalization, it is crucial to create an impactful digital transformation strategy. A strategy that will address the influence it'll have on a business's customers and employees. The strategy aims to analyze and drive the transformation process towards successful completion. An effective digital strategy bridges the gap between organizational goals and the transforming business environment. It guides the future steps of the business towards growth and success.
The first step of sketching out an effective digital transformation strategy is to identify your business transformation's goals and objectives. The goals could vary from adding value to customer engagements to simplifying the day-to-day activities of a business. After determining the end motive, map out the entire roadmap to the transformation strategy.
Building digitalization strategy roadmap
1. Business Assessment- The first checkpoint of the journey begins with an in-depth assessment of your business’s current scenario. Analyze the strategic goal, the opportunity of growth, and the key performance indicators.
2. Research- Examine the industry trends and study your competition's behavior. Research on the technology and tools that are thriving in the market environment; look into their benefits and disadvantages to understand what will take your business to the next step.
3. Prioritize digital initiatives-The scope and ROI of every digital initiative vary from one another. Prioritize them basis the value they hold in your transformational journey and the impact it will have on your end goal.
4. Create a delivery plan: Plan out a clear structure for every digital initiative; map out the resource requirements and the methods to measure the results of the plan. Analyze and recognize the entire development and delivery processes to adopt a suitable practice.
5. Design the budget and resource plan-Frame the structure of your digitalization and the resources you'd need to adapt it for your business. Create the budget plan for the technology you'd be leveraging to step into the digital business ecosystem.
ERP & Digitalisation: An important checkpoint in business transformation
Enterprise Resource Planning (ERP) solution is a crucial pillar to design robust and sustainable digital transformation strategies. Both ERP and digital transformation procedures go hand in hand to transform businesses
With the help of ERP solutions, running a business becomes a cakewalk. It overlooks the entire business procedure, including finance, manufacturing, supply chain, services, procurement, and more. While your business adopts the digital route for better ROI, an ERP solution simplifies key business processes to aid better inventory management, financial management and other day-to-day activities. It simultaneously provides employees and stakeholders with the benefits of mobile apps and cloud-based solutions.
The emergence of ERP has enabled more than 50,000 businesses with the power of SAP business one solution globally.
Effective ERP examples:
1. Consumer Marketing India (CMIPL) leveraged SAP S/4HANA, a scalable ERP solution to improve operations' visibility and support the ongoing growth. With the solution’s deployment, the company was able to reduce data footprint and improve processing time by 60%.
2. Everest Spices deployed SAP S/4HANA ERP system to improve visibility and reconcile splintered processes, creating a scalable platform for long-term growth. The system aided the business by equipping employees with the ability to make decisions using real-time analysis through accurate data and internal stats. The business witnessed a 20% improvement in auto-dispatch efficiency and a 30% increase in its raw material purchase efficiency.
Digitalization and ERP tools are transforming businesses according to radically transforming customer expectations. Organizations and enterprises cannot steer away from this evolution; to stay ahead in the race, they will have to embrace technology and digital processes. Digital Transformation may seem difficult in the beginning, but with the right analysis and strategy, it only makes your success journey easier and efficient.