Did you know that in the United States alone, ecommerce sales is expected to exceed $740 billion by 2023, fuelled by mobile shopping, online marketplaces and digitally transformed shopping habits? Well, given, is your business taking in a slice of the revenue pie? If not, you are definitely missing out on the power of digital transformation.
Digital transformation is when companies integrate digital technology into organisational and operational changes to stay relevant, which is especially important for small enterprises.
The COVID-19 pandemic has hastened the speed and potential of digital transformation for large enterprises and small medium enterprises alike. AI tools like virtual assistants or chatbots and cybersecurity threat detectors are getting more popular. According to Deloitte, 77% of CEOs stated the pandemic has accelerated digital transformation plans. Straits Times Singapore has also reported that more than half of Singapore companies surveyed in July 2020 found it easier to drive innovation, compared to pre-pandemic times.
If you are wondering when to introduce the right technologies for your company to embrace digital transformation, the right time is now. Continue reading to find out why.
Why Should Businesses Start Digital Transformation Now?
The best time to start digital transformation is the present. Here are three reasons:
Outdated Technologies Increase Costs
In the long-term, leveraging the best new technology for your business and customers will decrease costs and increase investment return.
However, many businesses are still using outdated systems supported by obsolete languages, databases and architectures. These companies are in fact losing out, since new technologies are built using cloud architectures and approaches to provide real-time updates. Thus, for organisations who are not using relevant technology, they are not getting real-time analytics to grow their business.
Furthermore, worldwide, legal consequences of unintentional data leaks have become more severe. In fact, the European Union’s General Data Protection Regulation can fine up to 4% of an organisation’s global turnover for a cyber breach. Unfortunately, outdated computer systems and older platforms are generally full of vulnerabilities, putting businesses at a higher risk of cyber breaches.
Only the newest and more updated platforms will provide the highest security and compliance options. Focusing on adopting new technology will thereby reduce the liability of using old systems.
Consumers Want A Digitally Transformed Experience
The shift towards digital transformation is an awakening call for businesses to recognise how technology can dramatically improve work processes and customer experiences, helping to manage everything from inventory to email subscription lists. In the last 2 years, pandemic lockdowns have led consumers to shop online. Companies and industries have no choice but to respond. Consultancy McKinsey reported that for many companies, at least 80% of customer interactions are digital now.
It’s not just a change in sales that customers want. As customers increasingly demand for contactless services, companies have to rely on automation technology to create this experience. This is especially so in manufacturing, as automation reduces close contact with human employees to create a product. With fewer processes handled directly by employees, brands can assure positive, safe experiences for their customers. Consumers have signalled that they want a digitally transformed experience, and companies will need to heed this or see revenue decline.
Provide Greater Convenience
Partnerships allow businesses to provide customers with a one-stop platform that is able to service multiple verticals, thereby providing customers with greater convenience.
One key example is Apple’s partnership with Mastercard. Apple Pay allows MasterCard users to use their Apple products for making everyday payments. This partnership allows Apple to enhance their contactless payment systems, while tapping into MasterCard’s pool of customers.
While this entices customers to use the service, it also provides customers with a very streamlined experience. Users can experience ultimate convenience, as it is no longer necessary for them to take out their credit or debit cards to make payments, instead, payment can be made hassle-free through their Apple devices. This leads to a very comprehensive user experience for both Apple and MasterCard users.
To Retain Employees
Providing a safe environment for valued employees is another crucial reason for businesses to adopt digital transformation now. Businesses need to constantly improve employee experiences to avoid a high turnover rate, especially since rehiring and training new employees is both expensive and time-draining
Driven by the pandemic, businesses had to rethink employee experience using existing digital capabilities in a steadfast manner. As McKinsey reports, businesses that previously say it would need more than a year to implement the level of remote working during the pandemic actually took an average of 11 days for a workable solution.
Moving forward, as remote working becomes a gradual norm, businesses will have to use technology meaningfully to provide a condusive online environment for employees.
Consequences Of Not Embracing Digital Transformation
Loss Of Market Share
Businesses need to know that digital transformation is a necessity in order for them to stay relevant, increase competitive advantage and keep market share. According to global market intelligence firm IDC, two-thirds of Global 2000 companies plan to prioritise digital transformation in their corporate strategy and 55% of businesses believe they have less than a year before suffering financially and losing market share.
The digital transformation trend is to offer more value for less money. Office communication technologies, such as Skype, Google Suite, Zoom, support global communication and project development for free or at an affordable subscription rate. Online marketplaces such as Amazon succeed with price transparency and huge discounts. Therefore, companies need to innovate business processes to offer more for less to retain market share. The results from a MIT study shows that digital transformation pays off, as companies that have embraced digital transformation are 26% more profitable than other firms in the same industry.
Lack Of Insight About Target Audience
Not utilising new technology to track consumer insights leads to a weak understanding of consumer behaviour. According to LinkedIn, sales goals and social media presence are related, and businesses who utilise their online social network generally have 45% more sales opportunities, are 51% more likely to reach quota and outsell peers without social media by 78%. Indeed, sales representatives empowered with technology will sell via the right channels, enhancing customer experience for your brand.
In fact, nearly half of all organizations in a PwC survey cited customer experience and satisfaction as reasons for digital transformation. Companies that do so create highly engaged customers, which, according to surveys, buy 90% more frequently and spend 60% more per purchase. Therefore, companies that know how to engage consumers at the right channels will continue to stay relevant, unlike those that refuse to do so.
Companies That Failed To Embrace Digital Transformation In A Timely Manner
Resistance to continue digital transformation will hinder the company’s growth.
Kodak is one such example. Despite being a giant in the photography industry in the 1970s and inventing the world’s first digital camera in 1975, the company continued to develop analogue cameras and traditional film as their primary products. Unfortunately, as social-sharing photo platforms became more popular, their business model was undercut by more affordable digital cameras and photo printing processes. Still, Kodak did little to change.
In 2001, Kodak made a surprise business move and acquired Ofoto, a photo sharing site. However, instead of focusing their business strategies on photo-sharing and social networking, Kodak used Ofoto to try to get more people to print digital images. Eventually, in 2012, Kodak lost its competitive edge and ended up filing for bankruptcy.
Another example is Borders Bookstore, which used to have a sizable market presence selling books, magazines, and music in brick and mortar stores. One of their first errors was to outsource online book-selling to Amazon.com. When Borders started to develop an internal digital presence, it was too late as other online competitors surfaced.
Another mistake was to neglect the potential of e-readers such as Amazon’s Kindle. Borders did not innovate to provide options. This inability to change direction isolated even more of their market share. Eventually, debt-ridden, Borders had to close its doors in 2011.
How Moovaz Can Help
Removing outdated processes, legacy technology and encouraging innovation whilst adopting new technology are important elements of digital transformation. While it can be a massive undertaking, if done right, the business becomes more aligned with customers’ demands and resilient to changes.
With our digitally advanced and user friendly platform, Moovaz connects your customers to many other trustworthy services that they might require, ensuring an easy relocation journey. Embrace digital transformation!