According to McKinsey, an astounding 75% of S&P 500 companies are projected to disappear by 2027, largely due to their failure to adapt to the changing landscape.
Take a moment to let that sink in.
In truth, it’s no surprise businesses are struggling when you consider that technology is accelerating at quantum speeds. As a result, many companies are finding that the rule book is being fundamentally rewritten, including how they operate, develop products and services, meet customer needs, and hire talent.
Underlining this step-change is the constant pressure to innovate and digitally transform.
Okay, so you may feel like you’ve heard this all before. After all, digital transformation isn’t new. However, its critical role in whether a company thrives or dies was brought into sharp focus during the pandemic. Suddenly, digital-first was the expected norm, not something exclusive to large businesses.
Companies that already embraced a digital journey reaped the rewards. The most obvious example is the e-commerce behemoth Amazon. Forget doing well; Amazon skyrocketed during lockdown.
In contrast, businesses that hadn’t taken digital transformation seriously found themselves faltering as customers flocked elsewhere. Do you remember the US shopping brand JCPenny, once a mainstay of every mall in America? It saw profits plummet during the pandemic as it struggled to provide customers with the digital experience they needed.
According to McKinsey, 80% of customers interact digitally. Therefore, it’s a no-brainer that businesses must embrace digital transformation and leverage automation to stay competitive.
You might feel this digital imperative doesn’t apply because you’re B2B. The truth is, it does—and even more so. For example, let’s say you’re a wholesale distributor. By embracing a digital-first strategy, you can improve your e-commerce offer by improving product information, enabling contractors to check availability and order online via their mobiles, and creating a faster, more efficient customer experience that saves you time and money.
Not convinced?
Let’s take a deep dive into why you must embrace digital transformation.
Five benefits of digital transformation for businesses that want to grow
1. Greater agility
Transformative technologies like AI, IoT, and VR/AR will only grow and evolve. You can optimise strategies, streamline workflows, and seize new opportunities by utilising data analytics and accessing actionable insights. Businesses need to respond quickly and flexibly to these changing market conditions and ever-evolving customer demands or risk becoming irrelevant. According to McKinsey, highly successful agile transformations deliver 30% gains in efficiency, customer satisfaction, employee engagement, and operational performance. They make organisations five to ten times faster and significantly boost innovation.
2. Improve operational efficiency and cost savings
Beat the competition, minimise risk, reduce costs, increase profits—sound like familiar goals? However, suppose you want to optimise your operations and boost productivity. In that case, you must first automate menial and manual tasks so you can focus on the important stuff, like growing your business. Moreover, according to a Gartner study, 56% of CEOs believe digital advancements have resulted in revenue growth.
3. Enhanced customer experience and engagement
Brands bombard customers with information, all vying for their attention. How do you stand out from the crowd? You start by understanding your customer needs. So you can shape your services or products specifically for them. Think mobile apps, customer portals, multi-channel communications, and VR experiences. What’s more, you can personalise how you interact with audiences, building much-valued customer loyalty. We all know happy customers will stick by you and buy more stuff, which is vital to your business’s growth. For example, Salesforce found that 74% of customers said they wanted a seamless online experience that replicated in-person or through phone interactions.
4. Survive and thrive during the great resignation.
Want to provide a great customer experience (CX)? Yes. But you can’t without fostering a stellar employee experience (EX). Furthermore, digital transformation is critical to supporting businesses in attracting the best talent by building a strong employer brand and a reputation for development and innovation. Research has found that employees that feel good about their workplace are 20% more productive.
5. Gain a competitive advantage.
In a crowded market, many businesses prioritise gaining an advantage over digitally savvy competitors. By optimising processes, you’re also boosting efficiency and reducing human errors, which leads to reduced operational costs. For example, organisations with advanced digital capabilities have shown to be 23% more profitable than their peers.
