Over the recent past, digital transformation has been one of the hottest buzzwords thrown about at business conferences and events. Businesses all around the world are rapidly embracing digital transformation, yet, it is a topic that is not very clearly understood or well-defined.
Put simply, digital transformation refers to making use of tools and technologies in order to modernize a business. Digital transformation helps businesses stay competitive and build better relationships with their customers in today’s world.
In order to understand why digital transformation is so crucial to an organization’s success, let’s take a closer look at what the term actually means.
What is Digital Transformation?
Digital transformation means leveraging current technologies in order to rework the processes, strategies and products within an organization. Digital transformation is, in fact, a form of business transformation which is influenced by technological innovation, demand and customer behaviour and other external environmental factors.
Why is Digital Transformation so important?
In the simplest terms, any organization that doesn’t undertake digital transformation will soon be left behind by the competition. But, there’s more to digital transformation. Digital transformation can actually provide a range of benefits to an organization.
Some of the benefits that digital transformation can provide to business include:
- Cost Reduction: Digital transformation can enable major efficiency gains and cost improvements to your business. Such quick gains can be invested in the next steps to create long-term returns.
- Sales Productivity: Using a deep analysis of the client base, the insurer can decide which distribution channel is the best fit for which type of leads. This can result in increased sales productivity, and the opportunity can also be used to launch new products to seize market openings.
- Speed to Market: With a fast and agile network, digital transformation efforts can assist your business to market and streamline product development and launch.
- Global Reach: Virtually every company feels the pressure to up its digital game. With digital transformation, you won’t have to wait for your customers to reach out to you. Instead, you would be able to build interactive relationships with them.
- Customer Experience: With features like Customer Relationship Management (CRM) modules, customer service applications, social data gathering, chatbots and more the customer experience can be enhanced.
- Work Efficiency: Businesses that opt to digitize their enterprises with digital transformation can automate error-prone and slow processes resulting in increased speed and accuracy.
Key Technologies driving Digital Transformation
There are a number of technologies that enable digital transformation for organizations. Generally speaking, an organization needs to transform multiple key processes. For example, cloud computing offers a business quicker access to new functionalities, updates and needed software, while data storage allows an organization to be nimble and respond to transformations.
Other technologies which are key drivers of digital transformation include commoditized information technology, mobile technologies, artificial intelligence, machine learning, blockchain, internet of things (IoT), augmented reality and virtual reality and social media.
Case Study of a successful Digital Transformation
Many organizations across different industries have undergone digital transformation successfully. Let’s consider the example of the efficient digital transformation of a fast-growing life insurance company in India.
The mentioned company was facing several operational challenges before digital transformation. First of all, it did not have any automation in filling and processing application forms. This resulted in more working hours for employees. Also, the company did not have any mechanism in place to offer post-policy customer support. The company lacked an effective tracking system for knowing the client’s policy status in real time basis or the agent’s commission. The company also lacked a clear data strategy.
However, through digital transformation, the company was able to address these challenges successfully. The company partnered with a digital transformation partner to develop an Agent Sales Application, a ChatBot, Commission Automation, and Predictive Models. Implementing these new digital transformations allowed the company to reduce turnaround times, application fill-in times and data discrepancy to a significant extent. Thanks to these technologies, the company also brought down customer support costs significantly.
This is only one of several organizations to have undergone digital transformation successfully. Another excellent example of digital transformation is Netflix. Netflix originally used to be a movie DVD rental company back in the day, but today, it is one of the biggest online video streaming services. This just goes to show how much impact digital transformation can have for a business.
Challenges of Digital Transformation
While it is obvious that every organization should embrace digital transformation, some organizations still struggle with legacy technologies. Some of the organizations are unable to allocate money for replacing old technologies, while some others are simply unwilling to do so. Some organizations also struggle at the executive and board level to find qualified leaders who understand the importance of digital transformation.
For businesses to survive in the days to come, embracing digital transformation is a must. This can only be done when leaders and executives surround themselves with technology and business partners that actually understand how digital transformation can make a difference.