Companies can no longer afford to put off digital transformation (DX). While the benefits of DX are indisputable, they can be difficult to achieve without help. In this article, Scott Clark suggests four ways to choose the right DX partner for your industry.
The digital transformation market is predicted to increase at a compound annual growth rate of 26.7% through 2030, and it’s easy to see why. In today’s dynamic and highly competitive marketplace, the barriers to entry are lowering, making it easy for new businesses and services to enter the market. These new companies are already equipped with AI, machine learning, and other high-tech digital tools, while more traditional businesses are playing catch up.
Enterprise digital transformation (referred to as DX) is critical for today’s existing businesses to maintain their margins and stay competitive. However, DX necessitates a fundamental shift in company operations and significant changes to culture, processes, and technology. But the benefits justify the effort: Companies armed with cutting-edge tech are more agile, more cost-efficient, and better equipped to handle the complexities of today’s demanding regulatory environment and ever-changing digital landscape.
The Good and Bad of Enterprise Digital Transformation
Automation is a key advantage of digitally transforming. By automating routine and repetitive tasks, organizations free up valuable resources, reduce costs, and improve efficiency. In fact, reduced costs and increased revenue are consistent benefits for companies deploying automated or AI tech. In McKinsey’s 2022 report on the state of AI, more than a quarter of respondents had attributed at least 5% of their company’s EBIT to automated tech and AI.
As the sophistication of cyberattacks increases, DX is also a great pathway to protecting systems and data. Good security requires up-to-date technology and constant vigilance, making it essential to have a digital transformation expert who can help you stay on top of security trends and implement the necessary measures to protect your business. With the right expert and cutting-edge tech, you can reduce risk and worry less about your company’s data and finances.
While the benefits of DX are clear, there are also significant challenges that organizations must overcome to be successful. In a recent CTG survey of more than 875 leaders across the globe, 85% reported that at least one DX-related challenge led to compromised business performance. It’s understandable, considering how big the task they face is.
To start, it can be challenging to find the bandwidth to prioritize and implement DX initiatives. If a business is running well, it’s unlikely to have many spare cycles for its teams to focus on new large-scale projects. A successful transformation journey can require significant experience and time to prioritize initiatives based on business goals.
Expertise is another significant challenge. Businesses in industries like energy and healthcare should be focused on serving their customers and patients in the most effective ways possible. Trying to stay up to date with the latest technology tools might not be part of their core priorities. Even in technology-focused domains like software development, it’s essential to focus on the primary task of writing code rather than changing workflows or processes.
These are just a few of the reasons why it’s critical to leverage the expertise of digital transformation partners who can bring the necessary knowledge, experience, and resources to the table. An outside perspective allows businesses to gain critical insights from third-party experts who have faced similar challenges in other organizations and know how to overcome them.
When you’re looking for a digital transformation partner, it’s critical that you make an informed decision. Here are four ways to ensure you start your journey on the right foot:
- Find a partner that will progress your business goals.
An experienced partner will care about your company’s objectives and provide solutions that align with those goals. Instead of taking a one-size-fits-all approach, choose a partner who is able to listen and respond to your unique needs. If you’re looking to achieve a certain result with your DX, such as serving more clients in a day or easing the workloads for specific roles, a committed partner will help tailor your transformation to support those goals.
- Look for experts in your industry.
Because DX encompasses so much, it’s essential to choose a partner with experience and expertise in your industry. They should understand industry-specific challenges and trends, as well as the technologies and solutions that can address them. For example, if you’re a healthcare provider, you need a partner who understands the nuances and regulatory complexities of the industry, such as compliance with HIPAA regulations.
- Consider cost structure.
You want experts who can meet with your team and coordinate the projects onshore while the heavy lifting happens offshore, where costs are lower. If a prospective partner doesn’t have processes in place to manage globally delivered projects efficiently, they may not be the best option for you. An ideal partner will provide consistent teams on both ends to support you through your digital transformation in the long term and insulate your business from the challenges associated with offshore responsibilities.
- Prioritize scaling ability.
Businesses shouldn’t think of DX as something they do once and forget; it requires discipline and organization to keep up with constantly evolving tech and priorities. Because it is an ongoing process, it’s vital to choose a partner who can scale their services with your business’s growth. A strong partner should have the necessary resources, expertise, and technology to support your business as it evolves. While looking for a long-term partner, it’s prudent to start with a single project to test the waters and validate that they are a good fit for your business.
Once you’ve found that partner, define and set clear metrics to measure their performance and ensure they’re delivering what they promised over time. This will help you evaluate their progress, make necessary adjustments, and ensure that your digital transformation initiatives remain on track.
Transforming your company’s culture, processes, and tech is no easy feat. Whether you’re just starting your journey or stuck somewhere in the middle, collaborating with the right partner will help guide you out of the woods.
Written by Scott Clark.
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