Why is digital transformation key to business success? Success is closely related to the value it creates. Digital is a tool for delivering value to reduce cost and standout from competitors. Firms need to keep up with changing customer expectations, as well as digital advances in their industry.
Rogan Hounsell-Roberts was a founder of a successful scale-up; has helped organisations across many sectors achieve success; a founder of KR5 Consulting; and passionate to help ambitious business leaders succeed.
Competitive forces are part of the reason why digital transformation is important for success. Although competition is good for consumers, there’s a cost. The cost to firms is from the investment in delivering more value. They need to keep investing to stay ahead of the competition.
What is digital transformation?
Digital technology provides the tools for business growth. Let’s assume that a firm can either compete on cost, or by offering something of value that makes them stand out from their competitors. One way of achieving that is to have the right tools to get ahead.
Digital transformation is moving the business from one way of working to a new way of working that makes use of tech to be more competitive. That transformation can be small or big. Existing systems can be re-imagined, often creating new and better ways for customers to connect with a firm. In the middle, there might be new products and services. At the other end of the spectrum, digital can power new and disruptive ways of doing business.
Threats and Opportunities
Rapid technology advances enable firms to engage with customers in new and exciting ways. Social media, mobile, and faster internet have changed how we relate to our world. This has created opportunities for firms to build new touch points with their customers. Customers can now connect with a business, anywhere and at any time they choose.
For firms that fall behind, there are threats from other players that offer better digital experiences and from changing expectations. Customers are more likely to switch to get a better digital experience, feel more in control or simply get things done faster. Customers may also get annoyed when they don’t receive digital experiences they’ve begun to expect as the norm.
See also Scale the Business with Purpose
Common reasons for digital transformation
So, what are the most common reasons for a business to go down the digital transformation route?
- At the top is improve customer experience. That doesn’t have to involve mobile apps or portals, sometimes it’s about providing a faster or better service. For example, Whirlpool use technology to check the model number so that service engineers carry the right parts to fix a machine fault on their first visit.
- Second is to improve efficiency. Using digital technology to increase productivity or empower staff with tools that help them get their work done quickly.
- The third common reason is to introduce a new product or service. For example, RBS introduced a new service that allows the bereaved to close a bank account online without visiting a branch.
Every business is different, and therefore will need to apply technology to meet their unique needs: It’s an essential part of any business, and important for staying ahead of the competition. If you’re looking for help to increase value and your competitive position using technology, then we’d be happy to have a chat to better understand what you’re trying to achieve and see if we can help.
KR5 Consulting helps senior leaders to transform & refine their business for profitable growth. We work closely with leaders to assist them in their Digital Transformation; refining their Business System; and applying Digital Technology.
If you’d like to explore the ideas in this article further or need help and advice, please contact Rogan at firstname.lastname@example.org – to arrange an informal chat.
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