The term “digital transformation” has been thrown around a lot, particularly in the past decade. But what is it? Is it a trend or the latest buzzword? Or is it the direction that all businesses must be headed to remain relevant in today’s modern business environment? In this guide, we will define digital transformation and discuss the reasons why digital transformation is beneficial to your company. We will also talk about the importance of digital transformation in the finance world.
Digital Transformation Defined
Digital transformation refers to the strategic process of integrating digital technology into different areas of a business to change its processes. The goal of digital transformation is to improve productivity, increase agility, and shift the company culture to one that embraces the digital age and its technologies. This may involve taking traditional roles across all departments and changing them to meet the evolving needs of the market and business environment. Therefore, digital transformation is as much about the company culture, employee mindset, leadership, and business model as it is about the integration of digital technologies.
Digital transformation does not happen overnight. It is a journey that may take months or years, and it will continue to change as technology, people, and processes evolve. To build momentum for digital business transformation, senior executives and human resources need to introduce digital transformation strategies and technology partners that encourage employee buy-in.
Digital transformation spend will be dedicated primarily to the right technology, which includes an agile I.T. environment and training. The cloud, whether public, private, or a hybrid cloud, is believed to be critical to modernize your business because it enables the organization to connect applications more seamlessly - making them faster, more dynamic, more collaborative, and more flexible to meet consumer and stakeholder demands.
Many companies begin by investing in a CRM system and business technology that keeps the organization connected to the internet. The next steps will involve gaining the right mix of talent and digital transformation projects, enabling employees and business units to leverage technology and new processes with confidence.
The Benefits of Digital Transformation
Organizations may regard digital transformation as “modernization” and therefore, a necessary disruption for any company that wants to stay relevant in today’s business landscape. However, digitally transforming your organization is more than just survival. It’s about reaping the rewards of having the foresight to recognize how a digital transformation can positively change all aspects of your business – from employee productivity to consumer experience and leadership. Here are the top benefits of a digital transformation:
Remain competitive - Not modernizing when all your competitors have already begun their digital transformation journey means getting left behind. While your competitors are becoming more lean, making decisions faster, and streamlining their processes for maximum efficiency, you may still be using legacy software and outdated I.T. infrastructure that is costing you time and money.
The end of geographic barriers – Digital technologies have opened up businesses to new markets across the globe. Many of us today already use digital communication tools in our personal lives, and they have allowed us to connect to people seamlessly. A digital transformation within a business would mean taking digital technology, such as communication software, the cloud, the Internet of Things, and other tools that enable remote working, to increase workplace flexibility and the ability to connect effectively from anywhere, anytime.
Increase employee retention – Leveraging artificially intelligent tools and business process automation relieves staff from mundane work and will give your employees a boost in morale. Integrating these technologies into your processes shows your team that you don’t want to burden them with time-consuming manual activities. Freeing up their time so they may focus on work that showcases their value comes with its advantages. The reward of digitally transforming your business is a workforce that is more productive, more effective, and more satisfied.
Improve customer experiences – In this time of mobile phones, social connectedness, and social media, businesses have grown increasingly aware of the necessity to engage customers. By becoming a digital business that uses technology as an advantage, you can improve your internal and external processes to become more user-centric. When customers feel engaged, they are more likely to try a new product, become a reference or introduce you to their network.
Data-driven decision-making – Adopting a data management solution drives informed decision-making. The data you generate from digital interactions becomes a wealth of insights that will transform the way you deliver value to your customers. With analytic tools to gain insight into consumer behavior, you gain a deeper understanding of customer expectations. You can use this insight to improve digital marketing, content management, business strategy, and business models. The analytic power derived from data can also be used to make more accurate predictions that will help refine your strategies for business growth.
Digital Transformation in the Finance World
In finance, CFOs and their finance and accounting teams feel the pressure to be more strategic and innovative in areas of business intelligence, risk management, client relations, wealth management, and financial strength and weakness analysis. So if a company’s finance and accounting department is still relying on outdated legacy systems or traditional spreadsheets that force them to perform accounting activities manually, there is little to no time left to focus on high-value work.
When you embrace the digital world and decide to modernize your finance operations with digital strategies, you equip yourself with the tools to make internal processes more efficient. You can achieve this by leveraging advanced accounting software that automates core finance functions, such as payroll processing, accounts receivable, accounts payables, etc. Eliminating document-based communications using the right tools and technologies means reducing the risk of human error, along with miscommunications that lead to the duplication of work. Shifting away from tedious, manual work means gaining more time and flexibility to focus on the strategic activities that support business innovation and growth.
For CFOs, a digital transformation and the elimination of manual finance and accounting work means having more time to strengthen client relations, provide leadership to the accounting team, support the CEO in efforts to expand operations, and ensure the organization is adequately funded.
Technology has changed the way businesses operate and communicate. In today’s fiercely competitive business environment, driving digital transformation is no longer a business strategy suggested by experts but considered essential and inevitable for any company that intends to stay relevant and competitive. It is a solution that can help companies expand to global markets, increase agility, boost productivity and profitability, increase employee morale and retention, and achieve business goals. Beyond the integration of digital technologies, digital transformation needs support from leadership, a culture change, and buy-in from the employees to become successful.