In 2021, the benefits of digital transformation (DT) are undeniable — from increasing operational efficiencies to improved customer acquisition to talent retention. For business owners, however, reimagining their businesses with technology often feels like a winding road with destination: unknown.
To navigate the steep slope of digital transformation, business owners shouldn’t walk the path alone, to begin with. In this post, we will take a look at the benefits of digital transformation and discuss why Ukraine is one of the best destinations for outsourcing the digitalization of your business.
Why Digital Transformation Is Crucial For Businesses
CEOs of widely known companies believe that digital transformation is not optional. Back in 2016, the Global Technology and Operations Executive of Bank America shared that the company adopted a “transform or wither” approach to introducing technology.
The CEO of Microsoft went as far as declaring that, these days “every company is a software company” because of how closely businesses and technology are connected.
To go deeper with the concept of digital transformation, here are the reasons why top-tier executives and SME owners can’t miss out on digital transformation.
1. Helps stay afloat in a competitive environment
According to a Tech Pro survey, 70% of companies are either undergoing or planning digital transformation. Thus, business owners who don’t implement innovation will seem old-fashioned to investors and unreliable to customers.
Real-time order tracking, improved customer engagement, and high-level data security are the standards companies have to meet, and digital transformation is the only way to hit the mark.
2. Improves customer satisfaction
According to Deloitte, although digital transformation relies on technology — its main goal is not to implement new tools. The key objective business owners should focus on is to engage with and retain their existing customers.
Research confirms that digital transformation is a powerful way to build user-brand relationships. According to statistics, digital transformation helped businesses raise profits up to 50% and increase customer satisfaction rates by 30%.
3. Increases operational flexibility
Even 15 years ago, studies were confirming the positive impact of technology on workplace flexibility. In 2020, due to the Coronavirus pandemic businesses were forced to put more effort into digital transformation — this was a red flag that, in the future, flexibility and adaptability would become the poster qualities of an efficient company.
Even if a company manager doesn’t feel an urgent need to transform processes, it’s better to start digital transformation at your own pace rather than waiting until the need for change is dire.
4. Reduces operating costs
Digital transformation experts suggest that business owners focus on improving operational efficiency rather than reducing costs when implementing changes in the workplace. Having said that, the power of DT as a cost-cutting mechanism is non-negotiable.
In fact, according to a survey conducted by Deloitte, digital transformation reduces the cost of launching products and acquiring new customers. Thus, in the long run, company managers can reduce operating expenses significantly after completing digital transformation.
5. Opens new revenue channels
Other than improving customer acquisition in the fields where a company already operates, emerging technologies are just as helpful in uncovering expansion opportunities and helping business owners access new revenue channels. Here are a few examples of how using digital tools can guide business owners to growth opportunities:
- Expanding the geographical reach of their products services.
- Improving the functionality of their projects using emerging technologies.
- Improving brand awareness by building meaningful partnerships (finding product integration partners, using tools for scaling marketing activities, etc).
4 Common Concerns That Prevent Business Owners From Outsourcing Digital Transformation
As the business climate becomes merciless to digital transformation laggards, a growing number of companies are heavily investing in DT. As a result, the costs of DT have skyrocketed, and building an in-house team for implementing changes has become too expensive to afford.
To that end, outsourcing digital transformation would be a win-win decision for business owners — if only they weren’t scared to make this choice. Here are the concerns business managers bring to the table when discussing DT outsourcing.
#1. “Lower rate means lower service quality”
Business owners believe that hiring a digital transformation team abroad will put them at risk of sloppy, unreliable change implementation. That’s why many prefer to stick with reputable domestic teams — even if they are too expensive to afford.
Reality: the cost gap between US or Western EU-based companies and providers of digital transformation services in other regions rarely has to do with service quality. Rather, it stems from a lower number of local businesses (hence, the demand for digital transformation isn’t as high) and lower costs of living. In other words, there’s no objective data to prove that cheaper services are worse than high-cost ones.
#2. “Communicating and controlling the team will not be effective”
Handing DT strategy development to a company located abroad makes business owners feel uneasy and anxious about the lack of control and direct supervision. That’s why local companies seem to be a safer bet to a lot of team leaders.
Reality: the communication process between the HQ and the outsourcing vendor can be highly effective if both parties work towards fostering efficient collaboration. Here are a few ways to ensure a hurdle-free partnership:
- Schedule meetings at a time everyone on the team is comfortable with.
- Use project management tools to track the status of each project.
- Discuss project management methodology and stick to it.
- Make sure the vendor keeps detailed documentation.
#3. “I am worried about protecting the intellectual property”
Successful digital transformation isn’t about incremental changes — it’s about re-imagining and rebuilding business processes. The team involved in the process will have access to confidential data, and business owners often get concerned with the question “What if a vendor misuses sensitive information?”
Reality: Unfortunately, building an in-house team does not protect business owners from IP theft: 72% of employees admit to hijacking confidential data at their former workplaces. Comparatively, hiring an outsourcing vendor is a lot safer since the service provider signs an elaborate IP protection clause before onboarding.
#4. “Completing digital transformation will take more time”
Not having direct access to talent leads business owners to worry that vendors will take too much time to deliver to set KPIs, thus, dragging digital transformation many years into the future.
Reality: outsourcing digital transformation is a faster way to implement innovation, since company managers get to benefit from well-established infrastructure and don’t need to spend time on training the team. In the case of top-notch outsourcing firms, business owners can count on collaboration with experienced digital transformation specialists.