There is a lot of talk about digital transformation nowadays. So much so it has become unwelcome to broach at strategy meetings. However, in 2023, leaders cannot afford to shy away from digital disruption.
The notion of a tipping point for technology adoption isn’t new, and the pandemic is considered the tipping point for digital transformation. A survey by McKinsey found that businesses’ reaction to the 2019 pandemic sped up the adoption of digital technologies by three to four years. Now customers are accustomed to the notion of digital-first.
Chairman & Managing Director of Bajaj Finserv and a noted digital pioneer in India, Sanjiv Bajaj, says, “This (digital transformation) is making a huge difference with high consumer adoption over the last year across ages, across geographies, and this has enabled our partners to intermediaries to get themselves acclimatised with using digital tools and of course, our employees continue to do that.”
Digitisation is no more just a tool for cost-effectiveness. It is a critical component that needs to be at the core of business strategy. Here is why leaders should religiously rethink existing models and reshape their businesses around digital technologies.
Helps Meet Customer Expectations
Real digital transformation centres around changing the customer experience. And when customers drive this change, it is not an option anymore; but a survival imperative.
Customers want a digital-first buying experience that is fast, easy to use, and highly customer-centric. A Bain and Company report supports this, stating that India has the third-largest online shopper base globally, likely to overtake the USA in a few years. To meet this demand fast and at scale, leaders need to interweave personalised digital selling with the business strategy.
To individualise customer experiences, businesses can employ digital channels such as interactive social media, chatbots, intuitive UI, and augmented reality. When customers feel catered to online, it leads to loyalty via customer engagement, positive reviews and, ultimately, better revenue.
Aids in Agility, Cost-Saving and Profitability
Digital transformation facilitates cost-cutting by:
- Reducing manual labour
- Removing inefficiencies
- Lowering operating costs
- Automating repetitive tasks
- Streamlining processes
This leads to agility, allowing for faster innovation and adaptation through an integrated digital-operating model. Employee time and effort can be saved by workflow automation, leaving them with more time to focus on creative outlets.
Through process optimization, leaders can measure current performance levels and find new ways of increasing overall productivity, which translates to higher revenues. Research supports this, stating that digital leaders achieve earnings growth 1.8 times higher than digital laggards. Moreover, 80% of organisations that have completed digital transformation report increased profits.
Empowers Employees to Work in New Ways
Transformational leaders realise that people are at the core of any business improvement function. Digitally empowered employees can efficiently serve customers by unlocking new ways to work. They can automate routine tasks and lean on digital tools for a multitude of other tasks – from tracking customer orders to collecting sales data.
Leaders should invest in robust digital infrastructure to meet the rising preference for remote work. Companies should focus on building employee communication and engagement channels to retain top talent who demand digital flexibility.
Reports state that companies can raise the productivity of knowledge employees by 20% to 25% by using social technologies that aid in better communication.
Provides Better Scope for Security
Digital transformation can help improve a business’s security posture by allowing for leaner, simplified, more secure networks. Cloud providers like Azure, AWS, and others eliminate a lot of IT complexity by managing all the infrastructure.
According to an IBM report, data breaches in companies with more complex networks are around 50% higher than organisations investing in simplification. Advanced security measures such as multi factor authentication, encryption and network segmentation can help businesses protect their data.
So, for leaders wanting to shift their companies to a more secure landscape, digital transformation is the way to go.
While the future belongs to those who put disruptive technology at the core, not everyone does it right. A Bain & Company study shows that only 8% of global companies have achieved their goals from their digital tech investments.
Before allocating massive budgets, leaders should be willing to go all-in, double down on objectives, and develop a highly-agile, adaptive digital design. Digital transformation for the sake of it, will put businesses in the 92% that nobody wants to be in.
Successful business leaders in India such as Abhijit Shah, Ankit Nalotia and Anika Agarwal demonstrate that digital is not a binary state, but an ongoing innovation. This perpetuates the belief that for future growth, digital strategies need to be true corporate strategies. Companies that put customers at the heart of their operation, establish a digital mindset, and implement digital ways of working are easily the trailblazers of tomorrow.