Why You Need Digital Transformation – And Why Companies Fail at It
Digital transformation has become the talk of the town. The problem is, business owners often get it all wrong Many get scared. They hear those two words and imagine a complicated, time-consuming, and expensive process.
The truth? Digital transformation is all about using technology to change the way your business operates. The benefit? Introducing digital innovation into your business makes you more competitive.
In this article, we discuss why there’s no turning back from it and how it benefits your business. We also take a quick look at the most common mistakes – and why working with a digital agency can help you avoid them.
Digital Transformation: Why Now?
Many business owners believe that the only reason they’re forced to think about digital transformation is Covid-19. They think they were doing just fine and didn’t need to think about changing anything. But the truth is, covid-19 has only accelerated the inevitable.
Let’s look at e-commerce. In 2011, online retail sales accounted for just 7,1% of all sales in the US. Less than 10 years later, in 2021, that number jumped to 19.6% of all retail sales in the US. That’s almost 3x the number. Sure, e-commerce growth skyrocketed in 2020.
But the retail share of e-commerce sales was already high pre-covid, so the only thing that the epidemic did was speed up the whole process. What happened in 2020 in terms of digital transformation would have happened anyway.
According to McKinsey Covid-19 has accelerated customer interaction digitization by several years. Based on the results from the same survey, it is believed that the largest shifts that occurred are here to stay – even after recovery.
And it makes perfect sense. After all, why get rid of something that works, gives you a competitive advantage, and, most importantly, is loved by your customers?
Why There’s No Turning Back From Digital Transformation
The data is clear – there’s no turning back from digital transformation. If you don’t take advantage of everything digital transformation has to offer, someone else will. It’s no longer just about growth and efficiency.
Sure, growth is what digital transformation can help your business with. But the reality is, if you don’t embrace digital transformation, it’s likely your business will fail. And the reason is simple. Digital transformation allows you to react to the ever-changing customer expectations faster.
This, in turn, helps you stay competitive. If you can’t keep up – your competitors will outperform you, and take over your market share. It may not happen immediately. But in a year, two, or five, you may find yourself at a point of no return.
How Digital Transformation Helps Your Business
Digital innovation can have a positive impact on many different areas of your business. The most common ways of using digital transformation to make your business more competitive include:
– Improving Customer Experience
Today, your customers can choose between companies in different cities, countries… even continents! And they have all that at a click of a button. If you want them to stay – and choose your business – you need to give them the experience they want. Digital technology can do a lot to help you create those experiences.
Of course, implementing the technology alone is not enough. For example, if you’re selling online, you can’t just create an e-commerce store and call it a day. To make your online store user-friendly, you need to make sure it’s fast, SEO-friendly, and easy to navigate. Because of all the tiny things to look out for, the majority of successful transformations are introduced with the help of a digital agency.
– Optimizing Internal Processes
Digital transformation doesn’t just help boost your online presence or marketing. Continuing the e-Commerce example, the right platform can offer you a lot more than just the ability to sell your product online. For example, it can help you streamline customer, sales, and inventory management. This, in turn, allows you to offer a great user experience to both your customers and employees alike.
– Digitizing Your Marketing
The Internet has disrupted all areas of running a business. This includes the way you communicate with your audience. Today, your audience doesn’t just expect you to be in the channels that they frequent. They want you to use digital innovation to go beyond selling and build a relationship with them. If you don’t – you risk losing them to someone who will.
Why Companies Fail – The Key Mistakes
Despite all the benefits, many businesses still hesitate to invest in digital transformation. Even worse, many of those that invest in transforming their business don’t seem to benefit from it. Of course, every failure should be analyzed on a case-by-case basis. Still, there are three common reasons why digital transformation projects fail:
– Choosing the Wrong Tools
The Internet is full of offers of companies offering services that could transform your business. But which tools are the right choice for you? The key to knowing that is to analyze your situation and understand your goals.
Just because a tool or technology is called a digital innovation doesn’t mean it can help your business. No matter what you do, you need to take your business-specific circumstances into consideration. Otherwise, the whole “transformation” can cost you more than what you’ll get from it.
– Having a Short-Sighted Strategy
Another huge obstacle is the inability to develop a digital transformation strategy. Often, even if business owners choose the right tools they still fail because they don’t know how to use them to their benefit. Most of the time, this happens because they treat transformation as a one-off thing.
In reality, digital transformation is a never-ending process. Of course, that doesn’t mean you need to keep changing the tools that you use. Or that you need to change any of the things that are working right away. Rather, think of digital transformation as a long-term strategy. A strategy that gets adjusted as your goals and business situation change.
– Missing the Big Picture
When thinking about digital transformation, you can’t just focus on one area of your business. To create a true competitive advantage, you need to think about the big picture. True digital transformation is not about a single process or tool. To succeed, you need to take an integrated approach and focus on the end result.
For example, think about how digital innovation can help you transform your customer experience. Or how can it impact the way you communicate with your audience. Can your audience find your brand in the channels that they’re using? And, if they do – can you offer them the same (or better) level of experience your competitors can? This is especially important when it comes to e-commerce. On-site experience often is the decisive factor in your customers’ buying process.
– Lacking an Experienced Partner
Unless you work with a digital agency or have an in-house team of experienced professionals, it’s easy to make all the wrong choices. Unfortunately, many companies still prefer to take the trial-and-error route. Instead of creating a strategy, they do things just because others are doing it.
The problem is – they often do so without any strategy or reasoning behind it. Most of the time, they do so to save up on costs. As a result, they often end up spending a lot more than they would if they hired a digital agency in the first place.
Transform Your Business Today
Transformation is a big word. But digital innovation can bring a huge change to how your business operates. And the good news is, you don’t need to revolutionize your business from the ground up. It can be introduced digital transformation using small, well-planned steps.
To do that, you need a digital agency partner who can guide you through each of those steps. And it all starts with creating the right strategy. Reach out and let’s talk about how we can help you do exactly that – and make your business more competitive.