Technology, digital transformation, and digitalization are becoming quite well-known concepts to our generations. It has become a daily routine for almost everybody to use some sort of digital tools to perform daily tasks or request products or services. In this highly demanding and complex environment, businesses are often put at a disadvantage if they don’t embark on a digital transformation journey that would help them boost revenues, improve customer experience, streamline processes, enhance productivity and be ahead of the competition.
Digitalization is transforming almost every industry and it is having a profound effect on the manufacturing and service sectors. It’s reshaping the way how small and medium enterprises interact with their customers and value-chains. For some, digitalization is improving access to new markets, eliminating the barriers that previously existed. The usage of new platforms and algorithms is enabling businesses to better exchange their goods and services and also their labor. In fact, in recent years, there has been an increase in the service sector, for which digitalization has played a major role in reducing transaction costs, increasing trading volumes, and facilitating a mechanism for demand and supply matching. The 2019 OECD Employment Outlook reports that from 1995 to 2015 the employment went down by 20% in the manufacturing sector, whereas it increased by 27% in the service sector. Digitalization is also impacting other sectors of the economy such as the traditional businesses and industries. Even though for these sectors the real challenge remains the early adoption of technological tools before competition pushes them out of businesses, there is an increased tendency to adopt such technologies considering its benefits.
Benefits of digitalization on enterprises
Several studies have been conducted throughout the last years with the overall aim of measuring the effect of digitalization on businesses. In general, the studies point out five key benefits:
- Increasing productivity – Harnessing the power of digitalization enables companies to better evaluate their internal processes and analyze their problems and be more proactive about challenges. That is, digitalization boosts efficiency within companies. According to studies done, companies that have embraced digitization have improved their efficiency by 39%.
- Reducing operating costs – On average, companies that have taken steps towards digitalization, have reduced their operating costs by 20%.
- Improving customer experience – Provided that customer satisfaction is of key importance for the success of many companies, the digitalization has enabled companies to provide better customer experience and improve overall communication. That is mainly done by the usage of new sales channels, such as social media platforms or e-commerce shops. By simply developing a social media page or a website, it enables businesses to provide services and information to their customers on a 24/7 basis.
- New market possibilities – while in the past years the distance was a key obstacle for businesses to open up to new and more distant markets; now with only a well-developed digital communication strategy and nice logistics, companies can reach any business they target.
- Brand recognition – While it is evident that digitalization enables greater fluency in terms of internal processes and operations, for most businesses digitalization has given them a competitive edge in the market.
The digitalization of an organization is no longer an option, but rather a necessity and a prerequisite for success. Given the rapid technological transformations, companies must bear in mind that the market is also evolving and they need to keep up with these changing demands. Therefore, to help businesses adapt to these trends, ECIKS consultants have long-standing expertise in digital transformation that will guide your company through every step until your company is fully digitalized.
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