Although businesses have heard the phrase "Digital transformation - An inevitable trend in the 4.0 technology era" a lot, many units still feel worried about the risks faced if they do not successfully transform. In fact, the transition is varied, complex, and filled with challenges. However, without digital transformation now, it is likely that your business will face the brink of survival in today's fierce market. To help you understand why digital transformation is required, we have listed 10 benefits of digital transformation for businesses. As a result, your business will also have a strong incentive to start its digital transformation journey.
Increase productivity and operational efficiency
The benefit of digital transformation is to increase productivity and business efficiency. You can leverage new technologies into production, automating processes with robotics, machine learning, and AI. With business processes, digital production, businesses will save maximum time, quickly overcome gaps in production and operation activities, reduce costs and estimate risks in advance.
A 2023 report from global consulting firm McKinsey & Company, quantified the benefits AI technology offers. Experts estimate that about half of the work activities that exist in 2023 could be automated in the future with AI. The report also notes that AI could "enable an increase in labor productivity of between 0.1 and 0.6 percent annually, depending on the pace of technology adoption and the reallocation of workers' time to other activities."
In addition, companies that are using digital to improve worker productivity are also contributing to reducing production costs and overhead. The reason for this is that when you operate your factory efficiently, you will avoid incurring costs for wasteful use If you can operate the factory floor more efficiently, you can avoid incurring costs for inefficient energy use or time wasted producing a product.
Digital transformation helps increase productivity and business efficiency
More powerful resource management
The benefits of digital transformation bring businesses indispensable to the consolidation of all information and resources in one toolkit. Instead of dispersing across many different software and databases, digital transformation can integrate applications, software and databases into a centralized repository. As a result, businesses can manage resources more robustly, easily analyze, make accurate decisions as well as reduce supplier overlap.
Moreover, digital transformation is not a department or functional unit, but it covers every area of a business. Implementing digital transformation for businesses, you will see a smoother collaboration process between functional departments, every department can access and view data in a uniform way. And above all, data security, information encryption as well as access decentralization are guaranteed.
Improve better customer experience
Usually, articles shared about digital transformation often talk about the benefits that it brings to the company, but in fact, digital transformation changes the customer experience. Changes and improvements from the transformation of technology support the creation of better services and products, meeting the increasing expectations of customers. For example: More features; Faster delivery; More professional service...
Gartner's analysis also showed that more than 2/3 of companies said they are competing based on customer experience. The Accenture report also points out that CX "has emerged as a key driver of sustainable business growth." Even just one point increase in CX score can grow millions of dollars
The path to digital transformation is basically using digital transformation to enable a closed technique. Businesses can collect more detailed customer data, easily analyze data and make accurate decisions. Digital transformation not only delivers an intuitive customer experience, but also seamlessness from email communication to user portals, digital products, and even the pace at which you reach new leads.
Digital transformation improves customer experience
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Improve the quality of products and services
The quality of products and services will be the strength for businesses to compete in the market. Implementing digital transformation helps businesses create a closed production process, well control the quality of products and services. By applying enterprise digital transformation software systems, the product lifecycle management (PLM) process is significantly improved. Businesses can streamline the product development process, while providing stakeholders with access to the most accurate data relevant to their roles for coherent, consistent quality control.
Increase your competitive position in the market
The benefits of digital transformation in businesses cannot be ignored as supporting to increase competitive position in the market. When digital transformation is implemented properly, transformation initiatives give organizations the ability to quickly identify customer needs, market trends as well as new opportunities for growth. In addition, experts said that from the digital transformation that helps improve customer experience, improve service / product quality, improve production processes, the competitive position of businesses in the market is also enhanced.
Raja Ranganathan, chief growth officer at Randstad Digital, asked, "When my customers want something and I don't offer it, why should I do business?" The answer to this problem is that for organizations that lack the ability to meet market needs, it is difficult to survive in today's market. Therefore, leaders need to support businesses in digital transformation so that they can change the way they create value and deliver to customers, promoting sustainability efforts.
Successful digital transformation helps businesses increase their competitive position in the market
Another benefit of digital transformation is making the organization more flexible. Instead of applying manual methods, traditional production processes, enhancing flexibility with technologies and digital transformation helps improve the speed of market access and create new opportunities. Besides. Digitalization helps shorten product lifecycles, adopt a continuous improvement (CI) strategy, anticipate challenges, and build solutions quickly. Thereby, allowing businesses to innovate, adapt quickly to market changes and increase viability.
Promote revenue and profit increase
According to the June 2023 "Digital Maturity Index Survey" by professional services firm Deloitte Digital, digitally mature companies achieve 6% higher earnings before interest and taxes. Similarly, McKinsey & Company's 2023 study also found that digitally led companies outperformed those that haven't, as shown by financial metrics, including total shareholder returns.
Thus, one of the biggest benefits that digital transformation brings to businesses is to boost revenue and increase profits. Because digital transformation not only supports cost reduction, product improvement, but also focuses on identifying new avenues to make better profits. For example: New products, new business models or revenue streams or additional output and output.
Kamales Lardi, author of The Human Side of Digital Business Transformation and CEO of Lardi & Partner Consulting, said: "New technology solutions enable organizations to innovate their business models, opening avenues for diverse revenue streams."
The biggest benefit of digital transformation is to boost revenue and increase profits
Encourage employee excellence
"Improving the employee experience allows you to retain people," Smith said. This is a particularly important benefit that digital transformation brings to businesses.
A survey from the SaaS 10x company in July 2023 found that about 94% of bank executives would leave their jobs to work for a unit with better technology; 92% will leave for a bank with more ambitious transformation goals. DX experts also analyzed the study, which focused only on the banking industry, but also reinforced what they saw across the sector. Employees tend to want to work with leaders who think new, adopt new ways of doing things, not with those that lag behind.
Moreover, thanks to new technologies applied to the working process, it has helped change internal processes and increase employee experience significantly. Employees feel more comfortable working, and their efforts are also recognized when productivity improves. In particular, digital technologies have supported employees to come up with more valuable creative ideas.
Encouraging digital culture
Another benefit of digital transformation is that it encourages businesses to build a digital culture to adapt to rapid market changes. A recent PTC survey of executives and their employees found that 90% agreed they would prefer to work for an organization that is adopting and investing in digital transformation technology. This shows that digital transformation not only shapes the employee experience but also motivates them to maintain a culture of innovation, creativity and innovation. In addition, team members who want to meet the digital culture must enhance their skills and learn digitally to take advantage of the benefits of digital transformation.
Enabling future digital growth
According to DX experts, the biggest benefit of digital transformation in the enterprise is to drive an organization's successful digital transformation efforts to achieve even more success. In other words, it is easier to understand: Digital transformation is the initial action that sets the stage for all subsequent business development. If you don't invest in digital business model transformation, there's a good chance your company will quickly become obsolete
Over the past few years, many industry giants such as Blockbuster, Toys R' and Kodak have gone bankrupt. The main reason is because they have failed to transform digitally. To survive crises or technological revolutions, businesses must take steps to transform. It helps you stay competitive, improves your ability to move forward, and creates mechanisms for you to innovate more (Quote from Mr. Smith's quote).
Above are 10 benefits of digital transformation for businesses today. There are many studies from experts that have proven the importance of digital transformation in various fields and industries. Therefore, to take a big step forward in the new era, businesses must definitely implement digital transformation successfully.