Digital Transformation and Disruption in Business
Over the last 15 years the internet has gradually changed our lives, and we can’t even imagine a life without it. Digital transformation and digital disruption is core to every company today. And if you want to be successful, you have to be your best online!
The Internet gradually became a part of our lives, and we enjoy accessing knowledge and share with our friends and colleagues. Today, some politicians are even fighting to get unrestricted internet access as a human right!
Internet is challenging every aspect of our daily lives. Most importantly it is challenging our business. This process is defined as digital transformation, which refers to the changes associated with the application of all technology in our society.
Today all companies are required to establish an online presence. This has become even more important after the extreme growth of social media networks, which is where we spend most time when we are online.
Many small and medium sized businesses seem to think digital transformation and digital disruption do not affect them, but today a majority of potential customers make an online search before buying a product or service. The competition is fierce and online marketing has been proven to be up to 10 times more effective than traditional marketing channels. This is why it is incredibly important to understand the digital transformation thoroughly.[Tweet “if you want to be successful, you have to be your best online! @cloudnames”]
Before defining digital transformation it is important to understand what transformation means for a company. Business transformation is about finding and implementing a new business models successfully.
Companies evolve over time as they continue to develop their products, services, organisation and goals. A successful business evolves with its market, reach new customers, and improves its products and services. When they fail to evolve they have to transform, but transformation is costly, it has it’s own challenges and the risk of failure is grave. Evolution also changes a company significantly but the difference between transformation and evolution is that transformation is visible to customers.
Digital transformation is the intensity of digital initiatives in a corporation to adapt to the digital age. Companies who failed to evolve digitally have to perform a digital transformation. It is essential to do an effective implementation to internalize this change and to deliver a positive business outcome. Otherwise the transformation would become an unnecessary burden for the company budget.
Transformation has three key reasons: Changing competition, changing customer demand or changing technology. For example how we use mobile devices rapidly increase and people use their mobile devices for work, for shopping, entertainment and in short for everything. Therefore it is quintessential for companies to transition to online mobile presence if they have not already evolved to one.
According to a 3 year study conducted by MIT Center for Digital Business and Capgemini Consulting, only one third of companies have effective digital transformation programs in place. Which means that it is not late to do your digital transformation, if you have not started yet.
The real reason why digital transformation is important is a consequence of digital disruption.
The term digital disruption is widely used but rarely defined. It is often misused to define any product related to digital technology and also confused with disruptive technology. The latter is used for new technology that challenge the position of a widely used old technology and eventually become a market leader.
New digital technology breeds new business models and challenges the existing products and services. This change is defined as digital disruption. For example social media is a digital disruption for the media sector. Due to social media marketing campaigns, TV networks need to adjust its advertisement prices to compete with social media.
While digital disruption is a challenge for the related sector, it is often an opportunity for other sectors. If we look at the social media and media sector relation, social media gravely disrupted the media sector, but also social media provides a very important opportunity for small and medium businesses.
Small and medium businesses can focus on specific geographies and market segments with relatively small funds. They can also understand their customers’ needs and problems via social media channels.
Consumers’ want to be understood, and companies need to focus on customer understanding and customer touch points. Social media provides the mean to build online communities and brand loyalty for businesses.
It is imperative for small and medium scale businesses to take advantage of this digital disruption. With, relatively, very small funds it is possible to reach desired target audience.[Tweet “It is imperative for small and medium scale businesses to take advantage of digital disruption @cloudnames”]
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