What Is Digital Transformation?

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In recent years, digital transformation has emerged as an imperative for businesses of all sizes.

Whether you look at retail, healthcare, hospitality or financial markets, virtually every industry is looking towards technology to help it become more efficient, productive and profitable. However, while the message that “digital transformation is crucial” is being clearly received, there are still some companies that don’t fully understand what digital transformation really means.

The first thing companies need to know is that digital transformation doesn’t refer to a specific technology or service. Instead, it’s about integrating digital technology into various aspects of the business so that it can operate more efficiently and effectively.

Digital transformation sometimes even means leaving pre-established strategies behind in favour of ideas that haven’t yet been fully defined.

The Driving Factors behind Digital Transformation

The most obvious factor pushing the demand for digital transformation in the current landscape is the rise of new technology. The evolution of everything from artificial intelligence to the internet of things and 5G means that we can now embrace more opportunities in the modern workplace. Companies can embark on digital transformation initiatives to differentiate themselves from their competition, eliminate common pain points in their operations, and attract new customers.

With digital transformation, modern brands can:

  • Build stronger customer experiences: Digitally transformed customer experience initiatives allow companies to offer more meaningful moments to customers. Just look at how customer relationship management (CRM) systems are integrating with interactive voice response (IVR) systems and contact centres to ensure that clients get the service they need in a personalised and contextual way.
  • Engage and empower employees: Digital transformation also supports user experiences in the workplace. With collaboration tools, for instance, team members can connect instantly through video chat, instant messaging and file-sharing applications, without having to worry about switching between apps or calling an in-person meeting.
  • Improve business bottom lines: Digital transformation can even increase profits while lowering initial outlay. For instance, VoIP and cloud communications eliminate some of the expenses associated with old-fashioned telephone systems, while giving businesses better accessibility and scope for the communications stack.
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The Pros and Cons of Digital Transformation

Perhaps the biggest downside of digital transformation is that it forces companies to leave behind the practices and methodologies they’ve grown familiar with. When you engage in a digital transformation strategy, you have to give up some of the components of running your business that you already feel comfortable and confident with in exchange for ideas that might not be thoroughly tried and tested.

Issues with adoption or a lack of interoperability between tools could mean digital transformation initiatives don’t take off as well as a company would hope. Even if a plan is successful, it takes time for companies to get used to a new way of working. However, if a business can cope with the growing pains of digital transformation, the benefits are astronomical, including things like:

  • Access to greater amounts of information and analytics that couldn’t have been collected manually by human employees.
  • A ‘digital culture’ where employees are more agile, adaptable, and responsive to change.
  • Efficient and productive workforces where bottlenecks are found and eliminated quickly.
  • Improved employee engagement thanks to better workflows where people feel empowered.
  • Enhanced customer experience leading to improved brand reputation in any landscape.
  • Reduced expenses associated with maintaining hardware and legacy systems.

However, according to studies, less than 30% of digital transformation initiatives succeed. This indicates that companies who want to truly step into the next generation of their business operations need to not only have the right plan in place, but the right support to make their transformation success.

Digital Transformation and UC

One of the most common examples of digital transformation in the current landscape can be seen in the area of unified communications (UC). Through unified communications as a service (UCaaS), delivered via the cloud, businesses of all sizes can finally leave behind expensive initial investments into extensive hardware and telephone switches.

The growth of the cloud means that companies can tap into the communications technology they need, from video conferencing to instant messaging, without a substantial initial expense. What’s more, UC solutions like RingCentral Office use the cloud to ensure that businesses can upgrade their communications tools as and when their business evolves. With the right UC solutions, companies can digitally transform to a point where all of their communications technology is available to access and manage in the same seamless interface.

Focussing on digital transformation in UC will help companies from all industries to access greater cost savings, improved scalability, and enhanced flexibility. What’s more, a business that communicates well can also serve customers more effectively.

Approaching Digital Transformation as a Business

Digital transformation isn’t something that happens overnight for modern companies. Today’s businesses need to ensure they have the right strategy in place to pursue their transformative goals. This means settling on a selection of specific objectives that you want to achieve in your business – from reducing costs to eliminating inefficiencies.

The starting point is for a business to identify clear goals. The point of digital transformation is to enable a workforce and support productivity, so it’s crucial to examine business processes to understand exactly where and how digital capability could improve them. Once business has a clear set of expectations, it can start looking at the next steps it needs to take in order to reach its goals. 

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Originally published May 26, 2020, updated Jan 17, 2023

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