Exploring Margin Improvements via Digital
Digital transformation is helping enterprises achieve unprecedented margin improvements, smudging the lines between industries, and creating a need for dramatic efficiency gains across the board. Enterprise digital transformation carries the ability to streamline your business process, manage and reduce your operational cost, and contribute to revenue growth. There are however other important business objectives such as customer experience, employee satisfaction, product and service innovation, social and governance (ESG), etc., but all of these objectives in the end support growing the revenues or the margins. Ideally, digital transformation in your business can reap the below benefits that directly contribute to margin improvements.
A digitally mature business can do wonders when it comes to customer experience and satisfaction. That’s because such a business is able to automate manual, repetitive tasks and help its team engage in other value-added tasks such as marketing and improving customer experience. The costs that are saved in mundane and unproductive tasks through digital transformation can be utilized towards customer acquisition. However, ideally one must aim beyond the obvious digital transformation benefits.
Here are some broad ways to demonstrate how digital transformation saves different types of recurring costs within a business:
Reducing margins of error
Businesses incur unreasonably high costs due to human errors in a variety of activities includingaccounting, sales, marketing, promotions, advertising, operations etc. These errors can be expensive and digital transformation reduces such errors by up to 90%.
Reducing machine and employee downtime
System downtimes or missed deadlines can cost any business greatly. With automation and digitization, businesses can reduce breakdowns, automate customer care or technical support through a digital transformation agency and increase productivity.
Better Supplier Negotiations
Supply chain management is another area that can get expensive for businesses if they are not equipped with the right information about work orders, purchases and other operational costs. With technology, the business gets equipped with an organized database of suppliers and supply chains. This enables the business to negotiate with national and international suppliers better.
Several processes within personnel management can be automated with digital technology. Right from recruitment to training, in-house promotions, HR management – the company can save significantly on its overheads on people.
Digital transformation makes organizations more agile when it comes to time to market. This accelerates innovations, improves delivery of the projects/products and services and brings in better customer satisfaction. By hiring a digital transformation agency, a lot of loadcan be shed off from the in-house personnel making them more efficient.
Can Digital maturity help Improve Margins?
Digitally mature organizations enjoy a wide range of specific benefits arising from their digital transformations that include, but go well beyond, the bottom line. Among the most digitally mature companies, there are few characteristics that correlate most with financial performance.
Clear Vision and Dedicated Leadership
According to a recent global survey, about 70% of very digitally mature organizations strongly agree that they have a clear digital vision and only 2% of digitally immature organizations said the same.
Digitally Matured Organizations have Intrinsically Motivated Employees
73% of very digitally mature organizations strongly agree that their employees are engaged and intrinsically motivated; 10% of digitally immature organizations said the same.
Data Driven Insights
Digitally mature organizations are highly adept at leveraging data for insights, predictive outcomes, and business growth whereas very few digitally immature organizations could say that.
Digital Interactions are Convenient and Effortless
70% of digitally mature organizations strongly agree that their customer service division ensures that customers’ digital interactions are convenient, effortless, and enjoyable.
Instead, the least digitally mature organizations should start by aligning with a digital vision. And they should focus on using digital capabilities to improve their existing products and services in ways that align with customer usage and feedback. Moderately digitally mature organizations can often move up the maturity scale by re-organizing their marketing and sales operations around the customer— enabling them to respond to shifting customer needs—and by focusing on increasing customer engagement. For more digitally mature organizations, the biggest payoff may come from working to build a corporate culture that values data, so the whole team can move from intuitive to empirical decision-making. The next step is to begin using advanced data analytics, including artificial intelligence, to predict customer needs, desires, and behaviors.
When it comes to improving margins and competitiveness, two areas of digital innovation are front and center:
- Automation—software “robots” that can automate tedious and labor-intensive information tasks such as data collection and data processing.
- Cognitive technologies and analytics—harnessing the power of analytics and big data, and cognitive technologies such as machine learning, computer vision, and natural language processing, to uncover hidden insights and boost effectiveness.
Let us look at some of the digitally transforming tools and technology implications that can get cost reduction for businesses along with better customer experience.
Advanced analytics helps organizations across a wide range of industries, in critical parts of their business, to empower data through analytics. Analytics supports decision-making in the business domains of customer, supply chain, finance, workforce, and risk, where we identify actionable insights through ML, predictive modeling, and text mining.
Intelligent automation is used to increase focus on high-value business activities by implementing automation to emulate human actions, engagement, interactions, and judgments; using robotic and cognitive technologies, and improving workforce productivity and process effectiveness.
Information management involves a business-driven approach to designing and implementing next-generation solutions and processes that support businesses globally to better manage, protect, share, and innovate using their data. Organizations can design, develop, experiment, and operationalize effective Enterprise Data Management (EDM) solutions to drive automation, advanced analytics, and digital capabilities.
Intelligent BPM Suites (iBPMS) have a solid foundation of tools for orchestrating processes and automating tasks within those processes. They (iBPMS) consolidate integration services, decision management, process orchestration, ad hoc processes, and advanced analytics into a single platform. The right orchestration is needed to unify bots, applications, and people to ensure that the automation results are as planned.
Hyperautomation initiatives have grown, and a recent global survey highlighted that over 80% of enterprises consistently self-report increased or continued investment in hyper automation initiatives. Hyperautomation has numerous advantages and here are some of the most celebrated advantages of hyper automation.
Workforce enablement helps employees automate many processes within their roles and get more done faster with the resources available to them with the help of hyper automation. Minimizing manual tasks enables them to focus more on impactful work, such as planning and strategy.
By adopting an innovative approach to margin improvement and competitiveness—and by actively looking for ways to strategically harness the power of rapidly emerging digital technologies to enable new business models, enterprises can dramatically improve efficiency and effectiveness and take control of their own destiny, becoming the disrupter rather than the disrupted.