Importance of Digital Transformation
Successful digital transformation helps companies leverage advanced technologies to improve their business capabilities, enhance operational efficiencies, and improve customer experiences.
A well-planned digital transformation strategy benefits your business with a competitive advantage.
It reduces time to market
When your business undergoes a digital transformation, it reduces the time to get your products or services to market.
For example, if you plan to launch a new product or service, managing the cumbersome processes involved manually or with the help of a legacy system could be tough, and it increases the scope for errors.
On the other hand, digital transformation introduces streamlined operations and business process automation through cloud-based ERP software. It is a centralized platform that makes it possible for you to access real-time data from the entire organization across the departments and locations.
The information collected could be used to forecast future demands and identify the channels capable of delivering the products or solutions faster to the end-users, which reduces time to market.
It improves solution quality
Digital transformation could improve the quality of your product or service through incremental upgrades according to market demands.
For example, you could use technology to capture your customer data to understand their buying behaviors. This information could be used to efficiently customize and improve your product or service for enhancing your customer experience.
It revolutionizes work culture in a positive way
When you invest in a digital transformation, it becomes an impactful initiative that positively supports your customers and employees.
This is because when your business undergoes any transformation, it requires support from every individual associated. Your employees need to adapt to the changes in the organizational structures and operational processes. Acceptance among all groups would help in making your company’s digital transformation efforts a success and the working environment more enjoyable for everyone.
Digital Transformation Path: Changing the Value Proposition
The path to a digital transformation is different for every company because each business has unique needs and goals. However, the foundation for modifying the value proposition of any business comprises three design patterns - creating a new value proposition, expanding the value proposition, and improving the value proposition. These need to be aligned with the companies’ digital transformation processes to successfully implement the change.
Creating a new value proposition
An organization makes a new promise to its customers regarding the value of the products and/or services they offer.
Expanding the value proposition:
Maintaining the same value proposition but making significant improvements in applying promise more profoundly or broadly for customers.
Improving the value proposition
Keeping the same value proposition, but making small, incremental changes that could have particular significance for users are implied.
Gartner has cited examples from the automotive companies that have embarked on a digital transformation journey by redefining their value propositions. Here are the examples of the three initiatives mentioned above:
TRATON Group (formerly Volkswagen Truck & Bus), which formally focused on selling products, now took a new initiative. The company has launched a new digital logistics platform called RIO to connect the transportation and delivery chain. TRATON Group creates a new value proposition by providing both products and a new connectivity platform.
Porsche always focused on product leadership. The company recently unveiled a new scheme for its customers, Porsche Passport. It is a membership plan that is an alternative to owning or leasing a vehicle. They can use the Porsche Passport application to request their vehicle. The company would select the vehicle and deliver it to their home. Porsche is executing digital transformation by expanding its value proposition.
Jiangnan Automobile, a subsidiary of Zotye Automobile, focused on selling good-enough vehicles at a low price. Jiangnan retained its existing value proposition while improving its operational efficiency. By enhancing its operational efficiency, the company is improving its value proposition to lay the foundation for digital transformation.
Change in Value Proposition: Ripple Effects on Your Business
Change in value proposition always creates ripple effects on your business capabilities. However, this effect is not always the same. It greatly depends on how aggressive the change is and what elements are being changed?
When a new business strategy is announced, or a service is expanded or improved, you would have new objectives and goals beyond handling your core business. This creates ripple effects as you need to:
- Design a new business model to deliver the strategy.
- Design new business capabilities to deliver the new business model and have new risks to manage.
- Have a new operating model, resources, and governance to ensure the new business initiative is handled efficiently.
- Change your financial model to support the new service.
Enabling Digital Transformation Success
Digital transformation has a significant role in your business improvements, and a feature-enabled cloud ERP system would offer you success.
Focus Softnet is a trusted provider of ERP software in Singapore. We have included technologies like artificial intelligence (AI) and machine learning (ML) into our product line to enable your digital transformation success and help you predict and resolve issues related to your business before they arise.
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