Machine learning, artificial intelligence, cloud computing — the race to digital transformation is underway in virtually every industry. Digital transformation is an intentional integration of technology into all aspects of a business. The result is fundamental change that affects how an organization operates, how employees function in their roles, and how customers interact with the business.
No longer a "nice to have" or a "someday" goal, digital transformation may now be a matter of survival. Frankly put, organizations have two choices: evolve or risk becoming obsolete. Business leaders agree. Seventy-one percent believe they’ll be left behind if they don’t embrace digital technology.1
Digitalization streamlines simple processes.
Did you know that processing 100,000-page documents, at three minutes per page, requires 5,000 person-hours? At $50 per hour, that’s an annual cost of $250,000.2 Digitizing data not only reduces data entry costs, but also eliminates the expense of physical data management by moving it to the cloud. Automation offers a more cost-effective, efficient means of working, so teams can spend their time on more important tasks than paperwork. Traditional back-office functions like accounts receivable, accounts payable and IT are essential foundations of digitalization.
Digitalization also enables employees to access critical data, like pricing, product availability, logistics and financial documents, almost instantly. This facilitates more collaboration and better decision-making, which is especially important as companies shift to remote or hybrid work models.
Minimizing or eliminating physical paper in favor of digital documents and processes, as well as automating systems, is a way to improve business operations. Digital transformation is more than just replacing processes with technology, however. It requires rethinking how you can use technology to achieve operational efficiencies across the organization. As with most business cases, the more effort you put in the more you get out.
Executed properly, digital transformation positions businesses to adapt quickly to a changing environment and new technologies. Investing in digital technology pays off. Sixty-four percent of business leaders say they’ve seen a return on investment, and it’s resulted in increased revenue.3 According to Bain & Company, fully transforming technology can save businesses as much as 30-40%. This includes “modernizing and simplifying architecture, automating with AI and machine learning, and adopting next-gen operating models.”4
Despite the compelling business case, 70% of digital transformations fail.5 While change is exciting, it can also be scary for some and risky.
Employee resistance can cause implementation failure.
Digitalization can make employees uneasy. Fear is understandable when change is introduced, especially technology changes.
Lack of management buy-in can derail efforts.
Of course, no amount of employee support will save a company's digitalization efforts if it lacks support from the c-suite. Business executives provide leadership and set project budgets - and lack of both can doom digitalization efforts.
Moving too quickly can be costly.
Organizations that jump in too fast and move too quickly risk investing time and money into technologies and tools that don't address their organization's needs or missing key steps in the transition process. It's costly and damaging to morale to have to backtrack and start again.
Failure to update processes and procedures will reduce efficiency.
Even the best technology is worthless without the right complementary processes. Organizations that attempt digital transformation without identifying, analyzing, and documenting all the numerous processes used won’t be able to optimize those processes for efficiency.
Lack of training minimizes benefits.
If employees don't have proper training and education on the new digital platform or tools, they won't use them correctly or won't use them at all. As a result, your company will never realize the beneﬁts or be able to optimize processes for efficiency.
Proactive steps to digitalization will clear the way for success.
The decision to digitalize your business shouldn't be forced or rushed. Careful consideration and some tips will help to avoid common pitfalls and accomplish your goals in making the shift.
Clearly define your objectives.
Take the time to answer the "why?" and "to what end?" of digital transformation for your organization. As you progress, regularly monitor your path to make sure the outcome gets you closer to meeting those objectives. If it doesn't, be prepared to pause and re-evaluate.
Be sure leadership and managers are firmly on board.
Recruit and develop change agents who understand the objectives and can communicate them throughout the organization and answer any questions that others may have.
Whether your solution is purchased off the shelf or developed in house, digitalization isn’t cheap. IDC predicts that spending for digital transformation will grow to $6.8 trillion6by 2023. Gartner predicts expenditures of $4.5 trillion in IT spending by the end of 2022 – up more than five percent from last year.7 In addition to the solution itself, you’ll need to budget for training, implementation, monitoring, and upkeep.
Communicate candidly and regularly.
Articulate the rationale, scope, and timeline for change to all stakeholders. Begin communication early so they can prepare and keep them abreast of any changes along the way. This is a situation where over-communicating is preferred to under-communicating.
Be sensitive to employee concerns.
Employees might be hesitant about digitalization and concerned about how it will affect their roles. It's often a challenging mental shift to jettison long-held processes in favor of new ones. Make sure the lines of communication stay open - both up and down the org chart - so you can assure employees that the changes being made are to help them do their jobs, not to replace them.
The level of commitment, investment and work required to realign a company is extensive, but the value of digital transformation is clear: Improved operational efficiency, faster time to market, and the ability to meet customer expectations all give businesses a competitive advantage in the market.
Contact a Synovus Business Banker or your Relationship Manager to learn how you can enhance your customer experience.
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
Celerity, “The State of Digital Transformation Today,” 2021
PwC Global, “It’s Time to Get Excited about Boring AI,” June 24, 2021
Celerity, “The State of Digital Transformation Today,” 2021
Bain & Company, “Reduce, Replace, Rethink: Transforming Technology Costs,” July 20, 2021
Boston Consulting Group, “Flipping the Odds of Digital Transformation Success,” October 29, 2020
IDC, “Digital Transformation Investments to Top $6.8 Trillion Globally as Businesses & Governments Prepare for the Next Normal,” December 8, 2020
Gartner, “Gartner Forecasts Worldwide IT Spending to Exceed $4 Trillion in 2022,” October 20, 2021
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