How can Digital Transformation Reduce Your Business Costs?

Digital business transformation constitutes the implementation of digital technologies in all business areas. It involves new operational processes with improved values delivered to the consumers. Did you know that in 2022, the spending on the technologies and services that enable digital transformation worldwide is projected to amount to 1.8 trillion U.S. dollars? 

By 2025, the amount is expected to reach 2.8 trillion U.S. dollars. 

Below data insights show how enterprises are ready to invest more in digitally transforming tools and technologies. 

By inculcating a digital business transformation strategy, a business can experience a cultural shift towards more intelligent and agile ways of doing business, powered by Artificial Intelligence (AI), Predictive analytics, and the Internet of Things. 

Digital transformation for business growth in the current landscape is more a matter of necessity than a matter of choice! 

Digital transformation changing business landscape post pandemic

In an October 2021 survey, 22.9% of enterprises claimed that Covid-19 had a significant negative impact on their business.

With a lost economic output of almost 2.9 trillion U.S dollars, a 4.5% drop in the global GDP was also reinstated during the November 2021 study. 

We are well aware that the pandemic has drastically affected how an organization operates. However, it has also resulted in massive virtual transformation. 

On a good note, there is a large shift towards business progress after the digital technology adoption. Enterprises are looking at big numbers and opportunities by implementing digital transformation strategies. To mention a few industries that witnessed major transformation changes: 

These strategies have also changed the way businesses operate, especially post-pandemic. Let’s take a glance at some of the working digital strategies:

Industrial IoT (IIoT) supporting social distancing with an automation process

AI and IoT use cases are well known in the manufacturing industry. We have talked about how IoT in manufacturing has been a massive help in breaking digital barriers. Bringing intelligence to the equipment on the factory floor has minimized the time humans spend in close proximity. 

Manufacturing and related industries implemented WIP (Work In Progress) solutions with deep learning that helps in the quality control process. Another big execution in IIoT is image processing and automation tools that have helped keep social distancing in check. 

Digital healthcare implementation keeping spaces safe 

The era of healthcare digitization has been one of the most prominent examples of digital transformation success. In the post covid world, combining AI with robotics has helped enhance patient monitoring, lab automation, neurosurgery, medical device packaging and many other fields. Online healthcare applications have also kept patients and doctors in touch digitally. 

Smart retail creating more engaging shopping space 

Another industry that witnessed remarkable progress in digital transformation is the retail industry. It uses data and AI to refine customer experience, optimize operations and layouts and refine product development. In the world of social distancing, computer vision and big data are being used to track customer volumes in the store and help retailers maintain an engaging shopping space. 

Besides, keeping data digitized helps make more informed decisions about the overall purchase and placement of the product. 

Coming back to the cost factor, businesses always function on a principle of maximizing profits and minimizing gains. This makes us wonder, can digital technologies in business actually result in cost reduction? 

Can Digital Technologies Help in Cutting Unnecessary Business Costs?

If keeping the budget in control is your primary goal, then without any doubt, your biggest asset is technology! Digital business transformation solutions as a concept cover three major sectors – strategy, operations, and management. In the operations sector, one can start storing data in the cloud, amplifying business processes and folders, and optimizing processes. 

Digital transformation strategy enhances business functions by focusing more on customer experience and needs. From the aspect of management, it remolds the entire business model, further seeking commercial and productive opportunities created by the current digital trends.

Technology implications bringing a cost reduction to your business  

Here are some of the digitally transforming tools and technology implications that can get your business cost reduction along with better customer experience: 

Cloud hosting and migration 

As of 2021, over 50% of corporate and public data is stored in the cloud. This shows that companies are increasingly shifting their resources to cloud environments with business agility. Cloud hosting leads to centralizing the entire business from one touchpoint so that every information is accessible to everyone saving cost and time.  

Automation tools 

Automation tools are widely adopted by enterprises of every scale and size. For a business to survive, it constantly needs to focus on lowering operational costs, and that’s when automation tools come into action. They simplify workloads and mundane tasks and increase productivity by bringing efficient management. 

Also Read: AI in Quality Assurance: The Next Stage of Automation Disruption

IoT for better maintenance

IoT technologies reduce cost by prioritizing and optimizing the inventory, revenue system, manufacturing, operational process, and energy management. IoT is the biggest source of predictive maintenance, 5G, and big data, decreasing interruptions and overall development cost. 

Team management tools 

Applications such as keka, Basecamp, Asana are being used by startups and enterprises to manage tasks, projects, and teams efficiently. They enable tracking all initiatives in one system. These comprehensive management tools and software are also a significant help in cost and resource management. 

Shipping and logistics

Technological tools can be the backbone of delivery, purchase, and transportation. Digital tracking of shipping and logistics saves staff requirements and centralized product operations. This is again another example of digital transformation cost reduction. 

How does digital maturity drive revenue?

Suppose you completely understand the importance of digital transformation in reshaping your business. In that case, you know how investing in technology can lead to higher revenue by providing your consumers the well-deserved value. A digitally mature business can work miracles when it comes to a successful customer experience, and such a business can channelize its marketing strategy and improve operations. 

Other targets that can be achieved by digitally mature businesses are: 

• Gross margin
• Product quality
• long term financial goals
• customer satisfaction
• CSR etc. 

Let’s dig more to highlight a few benefits that digital transformation can bring in business cost management.

Benefits of Digital Transformation in Business Cost Management

As simple as said, the cost that is saved in mundane and unproductive tasks can be better invested in customer acquisition. Ideally, a digital transformation in your business can reap the below benefits: 

Resource management

As companies transformed, they slowly replaced the legacy system that served individual business units. Industrial experts state that this end-to-end digital approach can help eliminate manual and associated costs. Moreover, the on-demand technologies can help companies adapt to the modern changes and requirements from the customer end. 

Improved consumer engagement

We cannot avoid how these technologies have enhanced the business-customer relationship. Businesses have varied opportunities to connect with their customers and understand their needs and demands. This is probably how you can meet the shifting needs by allocating the right resources at just the right time. 

Greater innovation 

Impact of digitization in business is huge. It brings new conveniences for industries to experiment and create new products. This digital transformation surrounds you; how? 

• Your personal gym trainer is now available online 
• Amazon delivers you the required package within a day at your doorstep 
• Retailers and marketers are ready to customize their products for you; however, you want them 

Isn’t this a way to greater innovation? 

Faster time to market 

One of the most prominent digital transformation advantages is the reduced product life cycle. Specifically, where development costs are higher, digital technologies are the way to stay ahead. The economics of the entire developing and manufacturing industry might change in the coming years due to ever-evolving digital transformation. 

Increased revenue 

Since our major part of the discussion is focused on cost reduction and management, digital transformation is a massive reason for increased business profitability. Digital businesses have delivered new functionalities that allow business growth and more significant RoI.

To sum it up!

The way we act today is how we are going to be remembered in future. Making right decisions is of absolute necessity today and the right way to innovate through your business is by adapting digital transformation. 

If you need customized technological insights and consultation for your business, we are a click away. Appinventiv can be your door to your business digital transformation. Connect with us!

THE AUTHOR

Saurabh Singh

MENTOR & DIRECTOR