Digital transformation is a buzzword in many companies. That doesn't mean everyone understands what it really comprises or the benefits it brings. So what is digital transformation and why is it important?
Transformation in a digital sense is different from digital adoption. While almost all businesses have embraced technology tools to some extent, digital transformation takes things a stage further. It integrates technology throughout all areas of a business, using it to adapt processes from the inside out.
A document scanner might reduce paper in the office without changing how the company works. Digital transformation might use AI to "read' text, extract key data and feed it into a cloud-based analytics system that mines it for insight to predict customer needs. That could transform the way that the company serves customers while cutting costs. That's transformative.
Digital transformation is critical for modern businesses because of the competitive edge that it offers. In its survey of 2,860 executives on the topic, Deloitte found that over three in four of the commercial respondents saw digital as a key industry differentiator. And according to a survey of 100 financial services executives by BDO, 51% are revising their long-term strategic vision and 48% are accelerating some or all digital transformation plans to increase agility and resilience.
Benefits of digital transformation
Efficiency and productivity
Done properly, digital transformation brings an array of benefits. Internally, it accelerates productivity and in turn increases efficiency. Workflows previously hindered by manual intervention slow processes down, introducing human error and extra cost. Automating processes from end to end accelerates them, makes them more reliable and allows businesses to execute more volume. It also frees time for more value-added work. As financial professionals move to more relationship-based ways of serving clients, this additional time to focus on client needs and ability to gather and access data can prove critical.
Increased agility
Digital transformation is about more than efficiency; it's also about being nimble. It employs technologies including the cloud and joined-up DevOps software development. These reduce the time-to-market for products and services while making them easier to adapt as market conditions change.
More resilience
Agility delivers another benefit: resilience. The last couple of years have been some of the most volatile for business in a generation, dramatically changing financial conditions, labor supplies and customer buying patterns. The ability to pivot quickly using technology has become critical to survival, enabling organizations to maintain operations as conditions change . The Deloitte survey found that digital transformation helped over three in four companies weather the challenges of the pandemic.
Faster responses
Digital transformation doesn't just improve responsiveness to adverse events; it also makes businesses more responsive to customer needs. For example, the digitization of manual know-your-client (KYC) practices in financial services lets customers sign up for accounts without the traditional cumbersome manual paperwork or delays.
Accelerated innovation
Beyond responsiveness, digital transformation also enhances customer relationships through the introduction of new products and services. Faster, more powerful development cycles encourage more entrepreneurial product and service development models. Companies can test new concepts with rapid development prototypes and "fail fast" with minimal impact.
Rising revenue
This increased responsiveness and innovation goes beyond cost savings. It can generate new revenues from increased customer acquisition and expanded sales opportunities.
However, a word of caution: digital transformation is more than a technological change. It is such a far-reaching discipline, touching so many processes, that it requires a cultural transformation, too. To succeed in transforming your business, begin with robust support from leadership and strategic buy-in at all levels of management.
Done right, a broad-ranging digital transformation strategy can prepare you to meet your clients' future technology needs and prime your business for years of fresh growth.
Digital transformation is a buzzword in many companies. That doesn't mean everyone understands what it really comprises or the benefits it brings. So what is digital transformation and why is it important?
Transformation in a digital sense is different from digital adoption. While almost all businesses have embraced technology tools to some extent, digital transformation takes things a stage further. It integrates technology throughout all areas of a business, using it to adapt processes from the inside out.
A document scanner might reduce paper in the office without changing how the company works. Digital transformation might use AI to "read' text, extract key data and feed it into a cloud-based analytics system that mines it for insight to predict customer needs. That could transform the way that the company serves customers while cutting costs. That's transformative.
Digital transformation is critical for modern businesses because of the competitive edge that it offers. In its survey of 2,860 executives on the topic, Deloitte found that over three in four of the commercial respondents saw digital as a key industry differentiator. And according to a survey of 100 financial services executives by BDO, 51% are revising their long-term strategic vision and 48% are accelerating some or all digital transformation plans to increase agility and resilience.
Benefits of digital transformation
Efficiency and productivity
Done properly, digital transformation brings an array of benefits. Internally, it accelerates productivity and in turn increases efficiency. Workflows previously hindered by manual intervention slow processes down, introducing human error and extra cost. Automating processes from end to end accelerates them, makes them more reliable and allows businesses to execute more volume. It also frees time for more value-added work. As financial professionals move to more relationship-based ways of serving clients, this additional time to focus on client needs and ability to gather and access data can prove critical.
Increased agility
Digital transformation is about more than efficiency; it's also about being nimble. It employs technologies including the cloud and joined-up DevOps software development. These reduce the time-to-market for products and services while making them easier to adapt as market conditions change.
More resilience
Agility delivers another benefit: resilience. The last couple of years have been some of the most volatile for business in a generation, dramatically changing financial conditions, labor supplies and customer buying patterns. The ability to pivot quickly using technology has become critical to survival, enabling organizations to maintain operations as conditions change . The Deloitte survey found that digital transformation helped over three in four companies weather the challenges of the pandemic.
Faster responses
Digital transformation doesn't just improve responsiveness to adverse events; it also makes businesses more responsive to customer needs. For example, the digitization of manual know-your-client (KYC) practices in financial services lets customers sign up for accounts without the traditional cumbersome manual paperwork or delays.
Accelerated innovation
Beyond responsiveness, digital transformation also enhances customer relationships through the introduction of new products and services. Faster, more powerful development cycles encourage more entrepreneurial product and service development models. Companies can test new concepts with rapid development prototypes and "fail fast" with minimal impact.
Rising revenue
This increased responsiveness and innovation goes beyond cost savings. It can generate new revenues from increased customer acquisition and expanded sales opportunities.
However, a word of caution: digital transformation is more than a technological change. It is such a far-reaching discipline, touching so many processes, that it requires a cultural transformation, too. To succeed in transforming your business, begin with robust support from leadership and strategic buy-in at all levels of management.
Done right, a broad-ranging digital transformation strategy can prepare you to meet your clients' future technology needs and prime your business for years of fresh growth.
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