To achieve your desired business outcomes, digital transformation should be at the heart of your company strategy
Digital transformation is not an end goal – it's a continuous process that helps enable you to achieve your desired business outcomes and goals in an increasingly digital world. It's an approach to leveraging technology, including artificial intelligence (AI), to rethink how your business operates, delivers value and measures success. But more than just new software or systems, true digital transformation is a journey of solving problems and driving value.
The essentials of digital transformation
While every digital transformation project is unique, they share three key components:
- Digitization of information: converting analog information into digital format, with a focus on enabling the processing and analysis of data. Examples include scanning documents, using cloud storage, and extracting text and data from PDFs into a searchable database.
- Digitalization of workflows: using digital tools to enhance processes and operations. Examples include automating workflows, improving customer interactions and predicting outcomes.
- Transformation: a strategic shift in how the organization operates, competes and delivers value, through digital technologies. Most successful businesses are in a constant state of digital transformation.
A competitive advantage within reach
In today's fast-paced environment, where competition comes from both larger companies and smaller, digital-native startups, digital transformation is a necessity for mid-market companies. This need is driven by your customers– whether you are a consumer-facing company or a business-to-business company – and their rising expectations around value and the customer experience. On top of that there is an ongoing need for efficiency and keeping costs down.
Today's technology – AI, automation, e-commerce and real-time reporting – is more accessible than ever. With the right guidance, it can be both cost-effective and impactful for long-term success.
Many mid-market companies are leveraging digital transformation to enhance operations and drive strategic decision-making. Here are a few examples of digital transformation journeys with meaningful business improvements:
- By introducing an e-commerce platform, a mid-sized distributor transformed its sales operation and order management. In addition, it was able to provide a better customer experience and enabled the company to free up time for strategic account management.
- Migrating to a real-time portfolio performance management solution unlocked a treasure trove of data-driven insights for a real estate firm. The firm is using those insights to enhance portfolio performance and utilization rates, manage lease expirations and refine lease renewal pricing.
- As part of a project to digitalize its finances, a medical device company moved to a new ERP system and is using its embedded AI to automate purchase orders, perform invoice reconciliations and streamline cash flow management.
- A demand-prediction and inventory-management system, powered by AI, enabled a trucking company to improve fleet utilization and management, as well as maintenance scheduling. This has minimized downtime and costs.
What role should AI play in digital transformation?
Most of today's essential digital tools use AI in some capacity, powering everything from data analysis and predictive modeling to natural language processing and task automation. Advanced AI systems, including large language models, enable businesses to synthesize vast amounts of information efficiently, transforming how we work and make decisions.
AI and digital transformation are deeply interconnected, but successful AI adoption depends on a strong digital foundation. This includes data digitization, cultural shifts, and embracing a digital-first mindset. Moreover, with the AI landscape evolving at an unprecedented pace, companies must develop a clear strategy and invest wisely to ensure alignment with their long-term goals and direction.
Focus on the business outcomes
Digital transformation projects are most successful when they are driven by a clear understanding and focus on business outcomes such as:
- Topline revenue growth
- Reduced costs
- Improved customer experience and customer satisfaction
- Higher employee productivity and satisfaction
Each use case or project should have clearly defined business outcomes so that it stays focused on adding value to the company.
Where should you start your digital transformation?
Rather than tackling several opportunities at once, consider starting with a single project. Break down the transformation opportunities into manageable steps and identify which part of the business offers the biggest opportunity to drive value and show initial success. It is helpful to think in terms of front-office, middle-office and back-office opportunities. Consider both the value that can be realized and the effort that will be required to succeed and choose a project with a high value-to-effort ratio.
For example, consider a digital transformation initiative in customer service, such as a new chatbot integrated into a self-service ordering portal. This project should have tangible short-term results, such as increased efficiency and improved customer and employee satisfaction.
Every digital transformation project can result in more data a company can leverage to drive further success.
Stay ahead: Leverage digital transformation for a competitive edge
Unlike their larger competitors, mid-market companies tend to be nimble, able to make process and culture moves more quickly. Few small and mid-sized businesses are fully embedding digital solutions across their business strategy and operations. Those that do can drive real competitive advantages in an ever-evolving business landscape.
Unlock sustainable growth by embarking on a digital transformation and AI strategy with expert guidance. Tailored solutions can address your unique business needs and drive value. Contact me or another member of Kaufman Rossin's Business Consulting Services team to learn more about how we can help you take the next step, whether you're starting your journey or are well on your way.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
