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Digital business transformation constitutes the implementation of digital technologies in all your business areas. Enterprise digital transformation carries the ability to streamline your business process, manage and reduce your operational cost, and contribute to revenue growth.
Did you know the global digital business transformation spending is estimated to reach about $3.4 trillion by the year 2026?
Therefore, if you have decided to enhance your business processes and manage cost by adapting advanced tools and technologies, your first concern may revolve around “digital business transformation cost”. While there is no accurate answer to this, you may get an idea based on your business needs and digital transformation cost benefit analysis.
This article familiarizes you with various cost management benefits of digital transformation, digital business transformation strategies and models to help you reduce business cost and technology implications that contribute to your digital business transformation cost.
Before you start, it is suggested to outsource the digital transformation of your business to a reliable and trusted partner that helps you achieve all business objectives in digital transformation for business growth.
Now, let’s begin with exploring the cost management benefits of adapting to digital business transformation.
As simple as said, the cost that is saved in mundane and unproductive tasks can be better invested in customer acquisition. Ideally, digital transformation in your business can reap the below benefits that directly contribute to cost management:
As you digitally transform your business, you slowly replace the legacy system that only serves 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 your business adapt to the modern changes and requirements from the customer end.
We cannot avoid how these technologies have enhanced the business-customer relationship. Your business attains varied opportunities to connect with the 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, leading to reduced costs over a period of time.
One of the most prominent digital transformation advantages is the reduced product life cycle. Specifically, where development costs are higher, digital technologies in business 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.
Embracing digital transformation in your business can help you stay in compliance with maintenance schedules along with keeping your systems and equipment in optimal condition. This significantly saves you from paying high energy maintenance bills.
Moreover, by automating your business process, you can save huge overhead costs on administrative tasks, in-house promotions, management tasks and training sessions.
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.
Speaking of maximized revenue with digital business transformation, let’s take a detailed view on how digital transformation drives your business revenue.
As per Deloitte’s recent survey that establishes connection between financial performance and digital transformation, a digitally mature business can effectively maximize its net revenue growth and net profit margin by adapting to a flexible model.
The study further states that a digitally mature business is more likely to achieve below business goals:
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 covers three major sectors in businesses that directly contribute to your revenue– strategy, operations, and management.
Here is a process breakdown of digital transformation with respect to the above mentioned business sectors:
|Digital Transformation Areas||Digital Transformation Process|
|Digital transformation in operations||
|Digital Transformation in Strategy||
|Digital Transformation in Management||
When you inculcate an aligned digital business transformation strategy, you are able to deliver successful customer experience, channelize your marketing strategy and improve operations.
Moreover, these strategies always function on a principle of maximizing profits and minimizing gains which brings back to our next discussion, what technology implications can help you with cost reduction?
Here are some of the digitally transforming tools and technology implications that can get your business cost reduction along with better customer experience:
Cloud adoption is the most significant step to accelerate enterprise digital transformation. As per Statista’s recent survey, 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 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.
Emerging IoT technologies are the answer to how digitalization reduces cost. IoT helps in 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.
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.
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 enterprise digital transformation cost reduction.
So far we have covered various aspects of digital business transformation that can help you save operational and overhead costs. However, we are yet to discover the process of applying the above mentioned technologies to our respective business industry.
Let’s take a few real time industry use cases of digital transformation adoption to understand how various business verticals adapt to modern technologies to save costs.
Below are some of the successful digital transformation applications and practices that various industries follow to manage cost and scale.
Startups and enterprises are now looking at big numbers and opportunities by implementing various digital transformation strategies aligned to their industry needs. Here, we have listed real time digital business transformation examples and practices, businesses follow to manage their costs.
AI and IoT use cases are well known in digitally transforming the supply chain and 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. These given technologies have helped the supply chain sector save over 40% on labor and associated processes.
One real time example of executing digital transformation strategy for supply chain is Appinventiv designing an intelligent logistics and supply chain software solution to help the enterprise get more responsive to its customers’ needs. The solution resulted in 60% increase in supply chain visibility and 40% reduction in transportation and logistics costs.
The innovation in the healthcare industry has been one of the most prominent examples of digital business 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.
The healthcare institutions also get the agility required to optimize operational processes while reducing costs.
One real time digital business transformation example can be Appinventiv building a revolutionizing app solution “YouCOMM” to effectively transform patient’s assistance in emergencies. YouCOMM is now successfully running in various hospital chains leading to 60% growth in nurse’s response time.
Another industry that witnessed remarkable progress in digital transformation is the retail and eCommerce industry. Businesses use 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. Moreover, directly interacting with customers on your business platform (mobile apps) rather than on third party websites can help you cut costs, offer better prices to customers, and generate better revenue.
Two popular instances for digital business transformation in eCommerce are: Adidas and IKEA
Food and restaurant industry often struggles with customer retention that occurs due to unsatisfactory app experience, difficulty in placing an order, or poor in-app user journey. A digital transformation business strategy of adopting enhanced and conceptualized food applications has helped the industry overcome major challenges.
Digital business transformation cost management examples for the food industry can be, Appinventiv redefining the UI/UX strategy for Dominos to increase its mobile app conversion rate by 23%.
Another instance is Appinventiv transforming the digital user journey of Pizza Hut through end-to-end mobile app development. Today the app has over 50k+ downloads along with an increased conversion rate of 30%.
Modern financial customers now look for core banking solutions that offer blockchain functionalities such as wire transactions with crypto, buying and selling of cryptocurrencies, wallet recharge, and other payments using Bitcoin and Ethereum and more.
This is probably why more fintech and banking institutions are embracing blockchain and associated technologies to offer security and personalized services.
For instance, Appinventiv developed a crypto based mobile app for Asian Bank to make cryptocurrency transactions mainstream for consumers.
Similarly, every industry vertical has inculcated a specific digital business transformation strategy to improve productivity and efficiency.
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. However, make sure you have a reliable technical partner by your side for optimizing business processes, automating systems, and propelling innovation.
Appinventiv is a digital transformation consulting services company that helps businesses achieve tangible results and establish agile processes by offering custom-made solutions based on evaluation of their current capabilities.
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!