Digital transformation: Factors that decide digitalizing of businesses
By Aditya Abeysinghe
Not all businesses are digitally ready due to various issues such as the nature of businesses, cost of digital transformation and the willingness for digital transformation. With the digital revolution in the past few decades, most businesses have transformed to digital businesses providing customers with remote transactions, using digitized internal processes, and using digital services with other parties for supply of products or services. However, is digitization for all and is everyone benefited if businesses are digitized?
What affects Digital Readiness?
Digitization is one of the conditions that affect digital readiness. Digitization refers to the process of converting information from a raw format to a digital format. For example, converting printed documents to soft copies is digitization. Using digitization, a business could transform manual business processes into digital processes which is called digitalization. Some businesses cannot transform their information to a digital format. For example, a seller of artifacts cannot convert data in prehistoric findings to a textual format. Some businesses do not have the necessity to transform data to a digital format. For example, a seller who sells food in a bus or a small way side shop often does not need to store data. Also, elderly population in most developing countries are less computer literate compared to those in developed countries which has made them focus on manual methods of handling information and be less focused on digital information.
If digitization and digitalization is feasible then a digital transformation could be made within a business. Digital transformation is mainly of two transformations: cultural transformation and individual transformation. Cultural transformation is usually superseded by individual transformation. Cultural transformation involves changing the culture or changing business processes within a business. Using a digital attendance system, using an internal messaging platform, and using a cloud meeting platform are some cultural transformations. Transformation of individuals within a business is difficult than transforming culture of a business. Several factors such as unwillingness of changing to a new culture, lack of digital knowledge, and organizational issues could cause individual transformations to be slowed or stop transforming.
One of the main reasons to digitize is to enable easy management of data across a business. Today, digital transformation of businesses are mostly cloud-based transformations where document sharing, emails, messages, and meetings are provided by cloud vendors. Most businesses save time and improve efficiency in their internal and outside processes with digitalization. Customers are often inclined to a provider who can provide services online and who can provide support to their issues online using social media or other data exchange media. Therefore, businesses could improve their customer relationships and can market their products at low cost using digital media.
Another advantage is that digitization makes monitoring of processes easy within a business. Many businesses use several business segments to sell products and services. The chain of supplies in these businesses differ based on the product sold or the manufacturers from whom these businesses buy supplies. Monitoring all processes from inbound supplies to sales of products is often complex for a business without using a centralized monitoring tool. By using a tool to view segments to sell products or services and control all business segments, a business could improve efficiency and reduce issues between business processes.
Digitalizing also enhances data analysis of customer and vendor data while enhancing operational decisions. Without data analysis businesses often spend large time and costs on promoting products to less profitable customer markets. Digitizing a business could centralize all data and enhance analysts to analyze and provide suggestions on which segments a product should be sold and which areas to focus when marketing.
Is Digitalization for all?
Digital transformation has several issues for some businesses. For example, consider a company which is involved with selling weapons or other sensitive devices. These businesses operate only with customers who are closely related to them and often are not making their business activities visible to others. Other businesses that closely secure data are also not willing to digitize and make unwanted customers to view their businesses.
Most businesses that value social connections often prefer non-digital processes over digital transformations. For example, many people believe digital transformation makes people distant because people tend to be isolated from others when working digitally. They think that social relationships between each other is important than being focused only about completing tasks. Some people also think that going digital affects their overall physique as standing or sitting for longer hours and working with devices makes them less efficient and stressed.
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