Benefits of Digital Business
Transformation Back in 2019, at a conference of the Kommersant Publishing House, Aleksey Khorunzhiy, head of the Information and Technical Support Committee of the Moscow Exchange, expressed an interesting idea about digital transformation. He said that most owners and managers consider digital transformation to be the purchase and implementation of new software into an already running process.
In fact, it is a state of disintegration and reassembly of the company anew. This can look like a daunting task for performers. But the benefits of digital business transformation are worth the effort, as they include:
- Eliminate time-consuming manual processes by automating business processes
- Staff development
- Increased customer satisfaction by improving customer experience
- Accurate market segmentation Improved and efficient decision making through real-time data collection
- New products/services
- World-class competition Increased company efficiency, flexibility and scalability
- Revenue growth and cost minimization
- Every company that sets foot on the path digital transformation, will receive these or other benefits if its leadership finds a suitable solution.
Examples of digitalization
An example of the foresight and implementation of digital business transformation can be called the Swedish furniture company IKEA.
She skillfully optimizes costs and “nurtures” a new experience in her customers.
Back in 2017, the company bought TaskRabbit, a site that helps find and hire people to deliver and assemble furniture from IKEA stores. So customers who were interested in such services could be more likely to order them from the company itself. To make it easier for buyers to choose furniture, they can pre-arrange it around the apartment using augmented reality in the IKEA Place app.
In addition, the company has a Space10 project ─ a research and exhibition center with ambitious plans to produce cars with someone in collaboration.
Digitalization of business has not bypassed the beauty industry.
A great example is L’Oréal. Its experts created the Makeup Genius app, which helps 20 million customers find the right products. The application reads and evaluates the parameters of the user’s face using the smartphone’s camera, then shows how to apply makeup correctly. The user can order all the goods that will be needed to create the image they like with one click.
The wind of change caught even children’s toys. Sales of the Barbie brand grew by 29% in the last quarter of 2020. This is the best figure in at least two decades. Of course, this was not least helped by COVID and the lockdown, but the company also began to conduct a digital transformation.
Barbie started a YouTube channel, posted animated films on Netflix. And the voice assistant Alexa is now helping kids with dolls learn different professions. Such stories inspire confidence in the company’s owners that it is possible to repeat the actions of successful colleagues and get the same result. In 2020, everyone rushed to look for a magic pill and a universal model for solving the main task of the year ─ the digitalization of business.
But there are nuances to this.
Business digital transformation model Ilya Letunov, head of Mail.ru Cloud Solutions, believes that in order to build a successful digital business, a company needs to go through 6 stages: get an understanding of the market; form digital expertise; define a strategy and goals; choose tools; develop skills for digital business; prepare an infrastructure for it.
The same number of stages is also mentioned in the book “Teaching an elephant to dance” by the American IT company Red Hat. Tony Saldanha, president of consulting firm Transformant, looks at five stages of digital transformation companies can go through.
The digital transformation of a business entails a change in the business model. Companies can implement digital offerings by starting with a small, simple product or service, like a digital startup. This way they can maintain a competitive edge by constantly introducing new features and services that improve the value proposition.
This also includes developing appropriate offers for different clients. Large companies sometimes solve this issue bluntly ─ they buy suitable startups and build them into their business model.
The rest have to move through trial and error. Most experts and companies agree that a traditional business should start its digital transformation with an assessment of the market and customer requests, overt and covert. A cocktail of insights, out-of-the-box thinking, up-to-date technologies and a quick response to change will allow you to become a strong competitor in the market to continue moving on the digital transformation treadmill.