Digital transformation trends are a hot topic. But, what does it actually mean?
It’s the process of transforming an organization’s business model, infrastructure, and work culture to fully exploit opportunities created by digital technologies.
For traditional businesses, the digital transformation journey is not easy. It’s a long, complicated, and sometimes painful process. The challenge is that these businesses have a lot to lose if they fail to adapt.
But the rewards are worth the effort.
In this article, we shall explore the trends and challenges of the digital transformation of traditional businesses. That will help you see how it might affect your company.
You might not have heard the term “digital transformation” used very often until recently. But for those who have, it was a simple concept.
Historically, traditional businesses have typically been slow to adopt new technologies. What we call the “digital divide” was one of the main reasons.
By 2017, 70% of organizations thought their existing IT systems were too complex for them to achieve the desired business outcomes with them.
Digital transformation is the only way traditional businesses can maintain relevance in today’s market.
In order to adapt to the shift to a digital future, companies must transform and improve their business models and technology infrastructure.
Trends in the Digital Transformation of Business Content Delivery and Management Systems 5G networks, big data, AI, and digital twins will fuel the connected customer Today’s enterprise customers want more digital experiences and offerings than ever before.
This is putting huge pressure on legacy companies and creating opportunities for newcomers.
To compete with the big data companies such as Amazon and Google, enterprises will need to combine massive data processing capabilities with real-time data analysis capabilities.
The purpose is to get the customer experience they’re looking at.
And to deliver better experiences, they’ll need access to the cloud.
With smart devices, the cloud will be the physical device that companies will access. The cloud will be the back-end where enterprises store their data and run their digital business systems.
But that’s not all. The Rise of Mobile Apps The digital transformation of a traditional business begins when employees start using mobile devices as their primary work tools.
In the past, many businesses held on to their workstations for decades. Even when mobile apps were just becoming a thing, it was easy to make decisions and stick to routines.
But as the technology of mobile apps has improved over the years, a few features have become almost standard on most apps: Gesture Recognition: Some apps even let you control them with your body.
Some apps even let you control them with your body. Voice Recognition: Similarly, you can control some apps through voice. Similarly, you can control some apps through voice. Contextual Help: The next time you’re in an app and need help, an icon for “actionable suggestions” will pop up.
Traditional businesses operate in silos. They specialize in a narrow range of products and services. That allows them to achieve economies of scale, which allows them to provide superior value at a reasonable price.
But for their customers, these companies are often not the best option.
At scale, you can’t just provide a single product or service that covers all needs. The best customers will always gravitate to an individual or a small group of organizations offering a comprehensive range of services.
This is where a customer-centric approach comes into play.
When customers are treated as individuals and not just as customers, companies can become more agile and responsive to their needs.
Digital transformation isn’t just for tech-savvy startups. Some of the biggest organizations in the world are adopting the digital transformation.
And although the transition is difficult for those still using their business as it was, the benefits will soon become clear.
These organizations will be better positioned to adapt to new challenges, innovate, and grow.
Here are the 3 trends and challenges we’ve seen so far:
1 Physical devices will go digital (or virtual).
2 Blockchain technology will help with security.
3 Businesses will start to switch from advertising and payments to subscriptions and micropayments.
The use of AI will take on a much larger role. More and more, these businesses will focus on customer experience.
Because traditional businesses have limited resources, the transformation process may be challenging for them.
Let’s consider a hotel company as an example. Its most valuable asset is a physical property.
The business, however, is not just about the physical property. It’s about the relationships between the customer and the staff.
A hotel that loses its local staff will lose the trust and the word-of-mouth value of its property. It’s like a bank that loses the customers who keep deposits in its savings accounts.
That’s why it’s important to keep up the good work in each area of the business.
In traditional businesses, like financial institutions, the transformation process can take a lot of time and money.
Traditional businesses struggle to keep pace with a rapid transition to the digital era. There’s a tension between the human side of change and the digital side.
On the one hand, there’s an enormous amount of human knowledge that needs to be applied to the workforce. But, on the other, the digital transformation represents an unprecedented business opportunity for companies.
Change management isn’t just a strategy for keeping employees motivated in the face of disruptive technology — it’s a business strategy.
There’s a misunderstanding that change management is simply about telling your employees what to do differently.
Businesses are well aware of the risks of digital transformation. However, the challenges of successfully navigating the transformation often go unnoticed.
This is a big challenge for businesses, especially traditional ones.
For example, sometimes a company’s financial statements are analyzed during the early stages of digital transformation. At that stage, the company’s gross profit margin can drop by as much as 15%.
The profits that companies earn from digital services can be far lower than from the services that they deliver today.
Besides, in traditional industries, we’re finding that many businesses have not recognized the importance of digital transformation.
The time it takes for transformation to be successful Traditionally, digital transformation is a long process.
Hope you’ve got some insights into some of the top startup businesses to launch during the pandemic and beyond.
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