The Rewards and Risks of Fast Tracking Digital Transformation: RewardsBy Kamran Khalid, Head of Business Analysis Group & Head of PreSales at NETSOL Technologies Inc. on 29-03-2021
As companies start to regenerate and recover from the pandemic, CTOs, CIOs and CFOs have realized the importance of ramping up key business operations by adopting cutting-edge digital technologies. Overarching idea is to ensure business continuity in wake of any calamity and simply optimize workflows. But those decision makers who have placed such initiatives on the back-burner until full recovery are also the ones putting their businesses at risk of being disrupted and eventually being displaced in the near future by competitors.
Studies (McKinsey, 2020) have suggested that even before the recent economic and social shocks that were felt throughout the globe, 92% of companies that were surveyed predicted deviations in their traditional business models due to the rise of global digitization. Now fast-forwarding into mid-crisis, there is greater demand and significant momentum for those deviations in segments such as cybersecurity, data analytics, and improved customer online experience.
Such disruptive trends however come with a real threat of displacement for organizations that might miss their window of opportunity. This information will serve as a pivot of our following argument on why you should fast track digital transformation initiatives.
Ensure stronger footing and avoid market displacement (post-pandemic) by embracing "next normal":
It is safe to say that for businesses to succeed, a digital future must be embraced by acting swiftly and decisively! Change management can do that by ramping up their digital transformation initiatives and arrive at the helm of the "next normal" sooner rather than later.
History has taught us that those who act quickly and embrace change are most likely to come out ahead of their competition. A research conducted by McKinsey highlights that "companies that move early and decisively in a crisis" attain a substantial competitive advantage. This research further highlights that eight years after the recessions of 2007-08, companies that had prioritized a "through-cycle mindset" during the turmoil led their competitors by more than 150% points in terms of cumulative total returns to shareholders. Meaning, adaptive businesses outperformed their competition when the crises was over.
Hence, for business leaders in post-Covid era, it is imperative to digitally transform their places of key business operations so that their companies are able to smartly adopt technology and consequently move ahead of competition by reshaping their core business model.
Transform into a highly optimized business with smart technology, high productivity and low costs:
The idea of using emerging technologies to enhance current operating processes and business models can be defined as digital optimization. A successful digital transition is not only about replacing a legacy system. On the contrary, digital transformation takes place across multiple facets of an enterprise, including the supply chain, workflow, interaction of consumers and staff, etc. A holistic lens is required to highlight areas that need to be optimized.
To further understand the value that a business can gain from optimizing operations, we can study some key digital transformation trends that are expected to rule the business world in the upcoming years:
In order to ensure that the business remains afloat, multiple brands are shifting to automate key business operations after the covid-19 outbreak caused massive disruptions in everyday workflow. The need for AI, Machine Learning, and RPA automation technologies is now more common than ever before. RPA, or Robotic Process Automation, is also gaining popularity as it has the potential to enable companies to minimize costs and maximize performance. Hence, greater profitability!
Moreover, businesses are rapidly moving towards a hybrid cloud infrastructure. With the development of SaaS and unconventional on-premise solutions, hybrid cloud systems have enabled organizations to set a course to meet all their key business objectives. However, the cost of the hybrid cloud is associated with several other factors, such as storage costs, server costs, platform costs, software maintenance costs, and training employees, and much more. Therefore, integrating a hybrid cloud system can be a costly affair. But when the system is deployed appropriately, businesses can reduce their overall IT expenses in the long run. Adding to that management also gets greater flexibility and access to their business and its stakeholders.
In the midst of lockdowns, booming demand for digital tech and remote workforce, cybersecurity has turned out to be one of the most critical pieces of the digital transformation puzzle. From January to April (2020), the world witnessed an unprecedented 238% rise in cyberattacks on financial institutions and overall 630% rise in cloud-based attacks. Businesses now are at a major risk of being attacked by hackers. Hence, the danger of internal security breaches makes cybersecurity crucial! According to the Gartner 2020 Board of Directors Survey, cybersecurity-related risk is rated as the second-highest source of risk for the enterprise, following regulatory compliance risk. Therefore, key decision makers have to fast-track cyber security initiatives by investing more resources to the cause and consequently ensuring a safety buffer zone against cyber threats.
These technologies are set to further mingle with businesses in the future. If your organization has any interest in optimizing operations and find the right mix of cost and efficiency, then digital transformation is the ultimate solution. But delaying such initiatives can put your business at the mercy of highly digitized competitors in the post-covid era.
Better understanding of your customers through transformed customer experience:
Companies which enhance and develop their core competencies to meet consumer needs are leading today in their respective niche (PWC, 2020). Customers' perception of interaction and engagement with businesses is changing rapidly, with technology serving as both a cause and a reaction. Therefore, in order for your customers to prefer your brand over competitors, you need to get to know them better!
To capitalize on this opportunity faster, decision makers are attempting to integrate sophisticated smartphone applications, intelligent chatbots, conversational surveys, world-class UX native apps, virtual reality, and other technologies with their workflows. With omni-channel approach at the helm of digital revolution, organizations now have access to customer related data. Management is set to use this data to better understand customers pain points and needs. As reported by Gartner, more than two-thirds of companies now compete primarily on the basis of customer experience - up from only 36% in 2010! Hence, it is recommended to validate the value of quality customer experience through digital spectrum so that your brand can resonate customer needs through collaborative technologies. Again, if delayed, the whole organization will be at the risk of losing budget and influence over time.
Advice for key decision markers:
When it comes to digital transformation, it's critical to foster a culture where everyone is tech savvy and risk is everyone's concern. A comprehensive and collaborative effort can help shift the culture to understand, embrace, and advance digital transformation. Failure to align the effort with employee values and behaviors can create additional risks to an organization's culture if not managed properly. Companies that focused on culture were 5x more likely to achieve breakthrough performance than companies that ignored culture, according to a BCG study of 40 digital transformations.
Hence, in the long-term, future leaders will only benefit from digital transformation if planned and implemented properly. Employees in a digital culture are encouraged to look outward and collaborate with customers and partners to develop new solutions. More collaborative models will succeed, and leaders will no longer be seen as those who sit at the top. Instead, leadership in the digital age will entail someone who can meet the team's unmet needs, instill a sense of purpose, and monitor and facilitate the creative process. The organization's digital transformation will be guided by this collaborative and innovative culture. There will be skepticism at first on many levels, but if there are people (leaders) who enable collaboration among internal and external stakeholders, digital transformation eventually becomes extremely rewarding.
As per every television commercial, these are unprecedented times. However, from a technological point of view, we were better prepared than we had initially realized. A pragmatic optimism is slowly establishing, based on well-versed practices and trends. Therefore, we must remain open to digital evolution and embrace the new normal sooner rather than later. It is time to revitalize our businesses, our professions, and ourselves. This is indeed an "unprecedented" opportunity that must be taken expeditiously!
If you have any questions, please reach out us here. We, at NETSOL Technologies Inc. will be pleased to engage with you and discuss more about how our experts can help your business to maximize rewards of fast tracking digital transformation.
Kamran Khalid, Head of Business Analysis Group & Head of PreSales at NETSOL Technologies Inc.
Share Via Whatsapp Back to Articles
View our collection of material and relevant resources pertaining to the global finance and leasing industry. Download Infographics, Profiles, Videos and Whitepapers.Explore