Today we want to talk about the pros and cons of digital transformation. In this article, we’ll explore opportunities and challenges to help you better understand what digital transformation is all about and how to better place your business in that context.
Table of Contents
Basics Of Digital Transformation
Many people ask themselves whether everything will get better with the help of digitization? First of all: only technology – no matter which one – does not make a company digital. It is much more effective to define digital transformation as the restructuring of corporate activities. In concrete terms, the transformation should enable the company to adapt to the ever-present changes and, ideally, to react to them quickly.
Digital transformation involves many complex changes in business processes and corporate culture. This includes the use of modern digital technologies, agile methods and data- driven campaigns. All of this takes place under the influence of competition. Of course, in practice, the transition to transformation is much more complicated and involves much more detail.
Benefits Of Digital Transformation – Is Everything Better Digital?
Flexibility, optimization, efficiency – these are the advantages that you will certainly expect in connection with the digital transformation. But the range is much larger, the following points must not be forgotten:
- Acceleration of business processes
- Cost reduction
- Increase in labour productivity
- Innovations are driven forward, new ways are developed to increase sales and profits.
- Increasing customer service to the point of customer centricity – deepening interaction and collaboration with the customer to add additional value to the company’s products and services.
- With the help of digital data, advertising can be played out in a more targeted manner, parameters such as gender, age, income level and interests of a person can be taken into account more.
- Improving quality assurance and the quality of analytics.
- Artificial intelligence processes the data collected about the customer in order to create suitable offers for him.
Leverage New Ways Of Working
The world of work is being permanently changed by digital transformation. Various platforms and communication tools enable collaboration over greater distances. Not only mobile work in the home office is possible, but also national and interdisciplinary work is made much easier.
The Advantages At A Glance:
- Individual organization of working hours
- Faster sharing of information
- Facilitate collaboration in large teams
- Creative ways of working by using new methods
- Easier organization
- Conservation of resources through the use of digital documents and folders
- Sustainable documentation of work processes and materials – nothing is lost!
Working is therefore becoming more flexible , more independent and – with the right method, also – certainly more creative. By mapping a digital workflow , tasks can be distributed directly with the corresponding documents. At the same time, costs can be saved, for example through online marketing or by using smaller office space.
Working life can therefore become easier, which can have a direct effect on the motivation of employees and thus also on a positive further development of the corporate culture .
Disadvantages Of Digital Transformation
The main condition for a successful digital transformation is the interest of the employees involved, their will to do it and an understanding of why this should be done. If there are only changes because the management ordered it to be so, high efficiency cannot be expected. In any case, the workforce must always be “taken along”, otherwise it won’t work.
Under certain conditions, digital transformation can be vital for a company. There are obvious but also unexpected challenges, like the current pandemic, that force one to make a decision towards digital transformation. In this case, a virtue must simply be made out of necessity – although the topic has not been at the top of the priority list so far – if at all. The alternative is tough but simple: will the company adapt to the current reality, accept the challenge, or will it be swept away from the market?
Develop Corporate Culture
The changed working methods also bring challenges. In some cases, the complexity of the processes is even increasing. Unfortunately, this also means that employees can quickly become overwhelmed by the extensive changes. There may be some disadvantages:
- Flexible working hours lead to overload due to constant availability
- Fear of job loss reduces employee motivation
- Inconsistent regulations lead to dissatisfaction in the company
Increasing costs for further training, the acquisition of IT infrastructure and workplace redesign
Companies are therefore faced with the challenge of integrating digitization into their corporate culture and establishing overarching regulations.
The transfer of work processes to digital is also vulnerable to cyber attacks. By networking and storing all information online, companies can be hit hard by cyber criminals . Along with this, the demands on data protection are increasing . In particular, sensitive data relating to a company’s customer base or product ideas can be attractive targets for attacks. In order to meet these challenges, you must weigh up both the opportunities and the risks for your company in advance. As a rule, however, the advantages of a digital transformation outweigh the disadvantages.
Digital Roadmap – Develop Individual Solutions
What’s the bottom line? The digital transformation offers many opportunities, but at the same time it definitely makes sense to go digital. A coordinated strategy is the “magic word”. It takes an overarching plan. Misguided actionism that leads to quick but short-lived fixes – should be more of an option to avoid.
Note: Digitization is not an end in itself. It’s about simply transforming yourself digitally in a sustainable manner and including both the advantages and disadvantages of the innovations in your considerations. In other words, even with the digital reformation, the wheel is not reinvented, and the tasks of conscientious merchants are not suspended here either.
It is important that you find an individual strategy for yourself and build on existing structures.
In the first step, you can use a digital roadmap to define the current status and use this to develop a concept for a target status.
It is not expedient everywhere to transfer analogue structures to the digital world. Use existing models or learn from other companies that have already taken this step, for example on a “ learning journey ”.
The following questions are helpful and should be clarified in advance:
- Have you defined concrete goals for your digital transformation?
- Have you exhaustively analyzed the effects of digitization processes on your company in all areas?
- Are you open to new approaches and willing to learn from others ?
- Have you defined what you can do yourself and where you need support ?
If you can answer these questions satisfactorily, you can face the digital transformation calmly and use the advantages for yourself. This is how you have the chance :
- Save time through optimized processes
- increase work performance through more efficient collaboration
- fully utilize the knowledge resources of your company
- to promote employee satisfaction through flexible working time models and last but not least
- To act cost-effectively
The fact is – probably no company can avoid the digital transformation. The old adage simply applies here: “If you don’t keep up with the times, you’ll keep up with the times”. With an individual roadmap tailored to your company, you can successfully meet the challenges of digital transformation step by step and achieve long-term success.
Also Read: What Is Digital Business Transformation?