Key Drivers of Digital Transformation: Why You Should Embrace Digital Technology

Updated: May 9th, 2024

Unlock Success with Digital Transformation

87% of senior business leaders see digitalisation as a priority, according to Gartner. Digital transformation is a big part of remaining competitive by improving outdated processes or legacy systems using new technology. Whether it’s using cloud technology to improve collaboration and communication or using automation to remove manual, repetitive processes, businesses everywhere are seeing the benefits of growing and adapting to tech. 

Not every business will want to go through a digital transformation for the same reasons. In our experience in helping hundreds of companies go through a successful transformation, we tend to see a lot of the same key drivers of digital transformation. So we’re going to break down those key drivers to help you plan your own digital transformation journey.

The Role of Digital Transformation

Nearly a third of employees doubt their company’s long-term sustainability due to the use of outdated technology, according to Virgin Media O2. By relying on outdated or legacy systems, the risks are much higher and your business won’t be able to react to changing circumstances quickly enough. Research by Deloitte proved this when it found that more digitally mature companies performed better during the covid pandemic than less mature companies. You also run the risk of being overtaken by more technology focussed competitors who can move quicker and get ahead by using technology. There are dozens of examples (from Netflix to Amazon’s AWS) that show how companies embracing tech have become the market leaders.

It’s not just about reacting to external factors though. Digital transformation has a huge impact internally. Automation for example has removed monotonous tasks from employees, allowing them to focus on more interesting work and giving them a higher sense of purpose. By giving teams more valued work you’ll not only improve how your business runs, but create more motivated teams.

Digital transformation has a huge impact internally.

What technology is driving digital transformation?

VOIP (Voice Over Internet Protocol)

With the PSTN switch-off coming in 2025, businesses that are still reliant on traditional phone systems need to find a digital solution if they want to stay connected with customers. Openreach will be switching off the old copper wires that have powered phones in the UK for decades, which could leave thousands of people and businesses with no method of communication if they don’t move to an alternative.

VOIP (Voice Over Internet Protocol) is that alternative. Rather than using phone lines, VOIP uses the internet to convert analogue phone signals into digital ones, so they can be transferred, saved and shared easily. This means that when the PSTN switch-off happens, businesses using VOIP systems will stay unaffected, while those still using the old phone lines will lose connection until they upgrade.

UCaaS

Workers lose up to four hours a week toggling between platforms, according to Harvard Business Review, and your business can spend more than is necessary if you have multiple subscription costs leaving your bank every month. So, if you’re tired of losing productivity and having to switch between platforms for voice, text and video, and you’d rather simplify some of your business payments, UCaaS is a wise choice. 

UCaaS (Unified Communications as a Service) brings all the major communication methods into one simple, affordable app, which can be installed across most digital devices like phones and tablets. Not only is this a money saver, but it’s a time saver, too, as it removes the need for employees to switch between platforms constantly. For example, your workers could be in the middle of a phone call with each other and be invited to an important video conference. However, because both calls are using the same UCaaS system, there’s no need to drop the original call. The workers could simply switch to the video conference with no lost time whatsoever. Less time spent jumping between platforms, means more time can be invested into tasks that bring value into the business.

Cloud Computing

94% of businesses use cloud technology in some capacity, according to Zippia. Moving to the cloud has helped companies and teams move away from fixed and inflexible ways of working, relying on on-premise servers and desktops, to a more flexible work model. Using cloud technology teams can now communicate and collaborate from anywhere with nothing but a mobile device and a reliable internet connection, greatly improving productivity and team efficiency. That’s not just our opinion.Around half of respondents to a survey conducted by Statista said cloud computing has made their teams more productive.

One reason is that cloud technology allows teams to work simultaneously on projects no matter where they are. Before cloud, employees could only work on a document one at a time, making and saving changes, locally, on their own devices, before sending the new version to the next person to work on. Naturally, this was a nightmare for version control and you could never be sure you were working on the latest version of a document. All it took was one change to be lost and the rest of the work became useless.There was also no easy way of figuring out who the last person to work on a document was. It also made data security riskier, with documents being sent (often over email) to multiple people. Using the cloud, documents sit in a secure environment and can only be accessed by people with the required logins.

AI and machine learning

37% of businesses now use AI in some way, according to Gartner. If you’re still handling manual jobs that could be replaced with intelligent, automated systems, you’re losing money and time unnecessarily. For example, many data input requirements can now be handled using automated systems, rather than needing to have a physical worker enter the info on a database. This will save a huge amount of time, as AI can accurately enter information in a fraction of the time it would take a human worker. Plus, AI removes the risk of human error in data input, which can often lead to a domino effect of issues further down the line if not spotted and resolved quickly. This opens employees up to better use their time on more pressing matters, boosting productivity and output as a whole.

Machine learning, on the other hand, is an element of AI that can be used to analyse your machines and systems to solve problems before they happen. If you run a production line and you have several machines churning out products consistently, chances are one of the machines will develop an issue at some point. If that machine shuts down, you’ll lose a significant amount of time, productivity and profits. However, by implementing intelligent systems that utilise machine learning, artificial intelligence could analyse your systems over time and alert you before the fault even happens, allowing you to take the appropriate measures to fix the issue before it becomes serious.

Internet of Things (IoT)

Another term that’s gained a lot of attention recently, the Internet of Things (IoT) refers to devices that are connected and can share data via the internet. Common examples include things like smart appliances, internet-connected fridges or heating systems. These devices have made our everyday lives easier to manage. But the implications of the IoT in business go even deeper.

For example, in healthcare, IoT can be used in devices to monitor the condition of patients, offering medical staff real-time updates, and increasing the chance of staff acting quickly if there’s an emergency. Expect to see more IoT devices entering the business world as technology continues to evolve.

Data Analytics

In the modern world, information is king. Having access to in-depth information about your customers means you can provide a service that is more efficient and personalised. Businesses that don’t take note of customer habits can’t hope to accurately meet their customers’ expectations and will continue to offer products and services that might not match current trends.

Data analytics can open businesses up to a new world of customer information they can use to boost profits. For example, a clothing company could employ data analytics through digital solutions, such as the cloud, to analyse the buying habits of their audience, as well as monitor other info like web page traffic, to better understand the desires of the customer and offer them products and services that are more likely to match their needs. This will lead to greater profits and  greater customer retention, whereas businesses that don’t take advantage of this technology can’t possibly hope to match the same level of personalisation.

Organisational Factors Leading Digital Transformation

Leadership and vision

Without clear and confident leadership, digital transformations will likely fail.

According to Harry Robinson, a Senior Partner at McKinsey:

“Often the CEO doesn’t set a sufficiently high aspiration. During the early stages of the transformation, he or she doesn’t build conviction within the team about the importance of this change or craft a change narrative that convinces people they need to make the transformation happen. People throughout the organisation don’t buy in, and they don’t want to invest extra energy to make change happen.”

So, not only does poor leadership cost the transformation to fail from the top, the effect trickles down to the rest of the staff throughout the company. 

However, leaders with a clear vision, who directly define what they hope to achieve from their transformation with specific goals, can empower the rest of their team to follow the example. If you’re a business leader looking to undergo a digital transformation in your company, you need to lead by example and should surround yourself with people within your business who are knowledgeable about new technologies and who you can rely on to manage the transformation in the various departments within  your company.

Company Culture and Employee Engagement

70% of digital transformations fail, often due to employee resistance, according to McKinsey. Your employees are the backbone of your business and they could be the deciding factor in whether your transformation is a success or a failure, so you need to have them on board.If you find some employees are resistant to new technology due to fear of being replaced, or simply struggle to adapt, there are things you can do to help.

You should always employ technology workshops or relevant training for your staff, so they can be confident in the new technology they’ll be using every day and will feel less threatened by it. You can also choose staff members to become ‘ambassadors’ for the new technology. These should be approachable and reliable members of staff you trust to relay information about the new technology to the rest of your workforce, helping to put them at ease.

Agile and flexible business models

Modern businesses need to stay agile and adapt to changes quickly if they hope to thrive. This is especially true in the case of digital transformation. Without taking note of the progression of your digital transformation, you may continue down a route that will lead to failure, unless you manoeuvre out of it. An agile and flexible business will take note of digital transformation progression, using measurable metrics like customer surveys, to determine the success or failure of its movements. Then, based on this information, they can pivot their strategy if they need to.

Collaboration and Communication

Good collaboration and communication are key if businesses hope to streamline their operations. However, many businesses struggle internally with inefficient systems that cost them time and money. If your employees are jumping between multiple platforms to collaborate, communicate and generally get their work done, you’ll be losing several hours in lost manpower and productivity. 

UCaaS (United Communications as a Service) solves this issue. Rather than having to move between different service providers, UCaaS offers all methods of communication employees need – voice, text, messaging and video – within one easy-to-use system.This will save your  team time, boost productivity and increase employee morale. Better still, you won’t need to deal with multiple subscription plans leaving your business account every month, which can get confusing and costly.

Customer Expectations and Market demands

Personalisation 

Through digital transformation, customer expectations can be met and, in many cases, exceeded. 71% of customers expect companies to deliver personalised content, according to McKinsey. Businesses that are unable to treat their customers like an individual and separate them from the crowd with personalised offers and interactions will lose money in the long run, with 76% of customers becoming frustrated if this doesn’t happen.

However, businesses that can leverage their digital transformation efforts and use digital technologies like data analytics to predict the movements of their audience will stay ahead of the competition. For example, you could onboard data analytics to offer your customers more personalised choices based on their buying and browsing habits over a long period, rather than relying on only the most recent data. If you can predict what your customers want ahead of time, you’re in the best position to retain their customers.

Seamless Omnichannel Experiences

With the abundance of digital technology today, customers expect to be able to reach your company in more ways than one. For example, 41% of customers expect companies to feature live chat options on their websites, according to Forrester. Customers who expect alternatives from the standard phone call when contacting you can feel disgruntled and disappointed when they don’t have any other options, resulting in them taking their business elsewhere. If your customers can currently only contact you by phone or email, you’re closing off a massive portion of your audience who still want to connect with you.

CCaaS (Contact Centre as a Service) can change all this, giving your call centres the technology they need to introduce multiple forms of contact, including intelligent automated live chat options. This way, customers who prefer live chat options will still reach out to your company, while leaving your contact service agents free to stay productive in other ways. Plus, with just how impressive intelligent live chat options are nowadays, customers can find answers to both basic and more intricate questions, without having to speak to a live representative.

Speed and Convenience

The faster you’re able to deliver your products and services, the more efficient you’ll seem in the eyes of your audience. However, companies can be bogged down with slow, inefficient processes, especially when it comes to deliveries. Only 20% of consumers were forgiving of online retailers for delivery delays and disruptions, according to Harvard Business Review. So,  if you offer a delivery service to your customers, you need to make sure your products are being delivered as quickly as possible.

By leveraging digital tools like data analytics, you’ll be able to identify areas of your delivery process – from the warehouse all the way to the delivery itself – where things aren’t going as smoothly as they could be.Then, you can make changes to your processes to ensure products are delivered promptly and on time.

Data privacy and security

Did you know 39% of UK businesses reported falling victim to a cyberattack in 2022, according to GOV.UK. Customers rightly expect companies to protect their sensitive data, which is one of the many reasons GDPR was put in place. The General Data Protection Regulation is a set of rules companies must abide by to ensure their customers’ information is protected in the best way possible. Failure to do so can result in serious fines. With technology evolving at a rapid rate, there is understandable fear around cybersecurity and businesses need to make sure their security is up-to-date and rugged enough to stand up to cyber attacks.

Modern anti-virus software and firewalls can offer protection enhanced with artificial intelligence, which can detect irregular network movements and eliminate cyber attacks before they have a chance to strike. This strengthens business defences, drastically cutting the risk of having to pay out to recover lost data or legal fees in the event of a breach.

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