If you were living in the United States during the 1800s, almost everything you purchased and utilized would have been sourced in your immediate local area. You would have had few options, if any, for basic necessities and you likely wouldn't have had any disposable income for luxuries.
But during the Industrial Revolution of the 19th and 20th centuries, mechanized manufacturing processes made the mass production of goods possible. Other technological advances, such as steam engines and radios, allowed for the expansion of commerce, and the acceleration of information transfer, at rates never before witnessed in human history.
The results? A dramatically higher living standard and the rise of the middle-class, increased life expectancy, easy access to a plentiful variety of products, and an economic progression that led to the largest creation of wealth the world has ever seen.
Today we are undoubtedly experiencing a new type of transformation, but this one is digital. Here we'll try to make sense of it for you, and help you understand why realizing a digital transformation of your own is absolutely critical to the survival and success of your company in 2019.
What is a digital transformation?
Sure, modern technologies have likely been an important part of your company for years now. You likely use many, many types of digital tools that help your company handle specific business processes.
Your finance team likely uses an accounting software that helps them perform specific functions like keeping track of your suppliers and cutting checks. You might be using Excel spreadsheets to manage your inventory, or maybe you have a warehouse management system that helps you manage orders. Your sales team might be tracking activities using a CRM, and your marketing team is likely leveraging search engines and social media platforms to generate new opportunities.
You undeniably have experienced a lot of benefits from these tools, but today you're noticing that it's not enough just to have disparate digital systems. The decentralized, fragmented, or non-existent, exchange of information between these systems causes a lack of visibility, and inefficient processes, that can be detrimental to the speed and accuracy with which you make strategic and tactical business decisions.
For a small-to-midsize company in 2019, we define it this way:
Digital transformation is the adoption and application of integrated digital technologies to enhance the customer experience, maximize operational efficiency, increase profitability, and enable real-time, data-driven decision making.
The most crucial component is the integration, and the inter-connectivity, of your digital applications. Your systems need to be "talking" to each other so that digital technology doesn't create limitations, but that it empowers your company's growth.
Below is an example we all can relate to: a traditional grocery store chain compared to one that has experienced a digital transformation.
Why is a digital transformation critical to your company's success?
Your customers desire, and expect, an on-demand, personalized experience. To deliver this at scale, there is an absolute necessity for each department (sales, customer service, operations and finance) to leverage the skills of each team member to add maximum value to the operation, and then you should be using digital to automate everything else.
The centralization and integration of your systems will allow for the free flow of data between business units, which will provide clear visibility into the performance of everything in your company: from your sales team to design and manufacturing, and from your supply chain to finance and accounting.
When your team is equipped with accurate, real-time information, you'll be able to spend less time manually managing processes and more time making data-driven, strategic decisions that help your company realize new opportunities, develop new products and customer experiences, improve efficiency and, ultimately, drive growth and profitability.