4 WAYS DIGITAL TRANSFORMATION BENEFITS BUSINESS BEYOND REVENUE GROWTH

BBDO / Google

Be ready for what’s next with digital business transformation

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Drive near-term returns and long-term resilience

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Digital transformation is integrating digital technology into all aspects of a business. It results in substantial shifts in the way a business operates, enabling them to upgrade legacy processes, accelerate efficient workflows, and fortify security. Google calls this continual, value-adding, resilience-building process Route to Ready. As companies that lack a digital transformation strategy and the capability to scale digital solutions, digital laggards often fall behind and lose a competitive advantage.

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Does the process seem long, complex, expensive, and out of reach for you and your team? It doesn’t have to be. That's why Think with Google has teamed up with Boston Consulting Group (BCG) to publish fresh research on the value of digital transformation.

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While revenue growth is vital, there are many other benefits to digital transformation that make it a priority for any business. Let's look at four of the key positive impacts, utilizing BCG research and results-driven, innovative brands that have successfully implemented digital transformation initiatives. It’s time to align your business strategy with digital enablement.

1. Deliver qualitative business outcomes

Digital leaders enjoy improved customer experience, well-connected employees, greater business flexibility, and a more diverse and inclusive workplace. Organizations that make digital transformation a business essential are more equipped to reimagine customer experiences. Digital leaders can:

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• Better build new services and products by extending their value chain reach.

• Develop and deliver new digital services to supplement or enhance physical products.

• Integrate ecosystems to serve unmet client needs (+26% vs. digital laggards).

Digital innovators – Nike: Nike has been focusing on digital transformation for some time, largely via growing its digital marketplace. The company utilizes social commerce using mobile apps to strengthen customer relationships.

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The brand can collect every interaction through its digital ecosystem with initiatives such as the SNKRS app, which help them personalize their message and products better. As a result, they were quick to respond to COVID-19.

2. Ensure long-term resilience

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Digital innovators are significantly more resilient than businesses slow on the digital uptake and will not only be the ‘digital leaders’ of the future but the overall business leaders in their sectors.

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• 14% of US companies improve sales growth and EBIT margins during crises, giving them a competitive advantage over laggards.

• During the pandemic's first two years, digital leaders gained >5pp market share and >5% market capitalization against their competitors.

• 70% of digital leaders expect to gain over 5% of market share in the coming three years.

Digital innovators – DHL: The delivery logistics company built a great supply chain and stock management system. DHL automated almost all steps, making it easy for all personnel. Using smart glasses in partnering with Ricoh and Ubimax, DHL increased packing efficiency by 25%.

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The business also unveiled its future digitalization strategy, named Strategy 2025. Despite the COVID-19 situation, the corporation expects to spend roughly 2.2 billion dollars on improving network quality and modernizing the intercontinental fleet, forecasting profitable long-term growth.

3. Gain a competitive advantage

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Sectors have moved closer in overall digital enablement, those who accelerate tech enablement have a greater ability to gain a competitive advantage.

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• Sectors vary on average only by 10% in digital enablement across the whole research sample per sector.

• The share of digital leaders vs. laggards is revealing. Tech is the strongest sector, with 39% of companies being digital leaders.

• Telecoms has only 16% of digital leaders but a high share of mature mid-tier companies, putting it ahead of energy and consumer goods.

Digital innovators – Starbucks: In 2019, the third-largest restaurant chain added 1,900 units, a 7% unit increase. They achieved this by using Deep Brew, an AI-based tool.

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The system analyzes data such as population, income, traffic, competitor presence, etc. to determine the ideal locations for new restaurants. The program can forecast sales, profits, and other performance markers. Big data has increased sales for the corporation.

4. Enhance data collection

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Most organizations gain heaps of client data, but the true benefit comes from analyzing this data to improve the business. Because of digital transformation, more quality data is available for higher-level business intelligence.

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• Turn raw data into insights across several touchpoints, creating a singular picture of the customer journey, operations, production, finance, and business opportunities.

• Evaluation of customer data collection methods is critical. Encryption of sensitive data into and out of your CRM software is a must when redesigning your digital stack.

• Consider the customer journey and how you can empower your customers with greater control over their data. Consumers are conscious of how their data is gathered and used, so data privacy can be a USP.

Digital innovators – Porsche: With software development projects focused on evaluating the customer experience, the German car manufacturer has long been digitally transforming its business.

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Porsche Consulting Innovation Labs comprises technology and software specialists, i.e., data scientists. Every team works together to integrate big data, machine learning, blockchain, and IoT into actual solutions while maintaining operational agility.

Key Takeaway

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In the age of digital disruption, prioritizing digital transformation is critical. Digitization is the key to growth, redefining how companies operate. The shift will continue to gain momentum. IDC projects that by 2023, digital transformation will account for 53% of all investments in information and communication technology.

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Don't let your company fall behind, use Think with Google for data-driven research, consumer trends, business, and industry insights, and more. The Route to Ready program provides you with the knowledge and tools to accelerate your digital transformation, drive growth, adapt to change, and achieve business results.

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Follow Google’s Route to Ready to become a digital pioneer and reap the rewards of digital transformation. Supercharge your transformation with Google. It’s business essential.