Don't get left behind! Why you should update your tech

Businesses that stick with old processes and technology risk becoming outdated in an increasingly digital world. In this article, we demonstrate the differences for businesses that update their tech compared with those that don’t. Digital transformation is no longer optional; it's a vital necessity for businesses of all sizes to stay competitive and succeed.

The benefits of digital solutions are huge with positive impacts for any key metric in your company that ultimately grows your bottom line. While a digital transformation journey may have its challenges, a strategic and well-managed approach brings superior business performance. 

Digital businesses are outperforming their peers

The consequences of ignoring digital transformation are becoming clear no matter which sector or industry a business is in. 

Research from McKinsey shows that top-performing companies that have embraced digital technologies are capturing most of the digital revenue in their industries, with some earning up to 80% more revenue. This difference in revenue is even bigger when looking at overall business performance.

Companies with strong digital capabilities significantly outperform those that are less digitally advanced. Across various industries, these digital leaders achieve total shareholder returns that are 2 to 6 times higher than those lagging behind. This trend holds true in areas like services, software, insurance and retail, and even in more traditional sectors like energy and agriculture.

This advantage isn't just staying the same; it's about adapting and growing. As businesses effectively use technology like automation and AI, they create advantages that build on each other, allowing them to continuously improve and get further ahead of their competitors. 

The gap in digital maturity between the top and bottom performers has increased significantly in recent years, highlighting the urgency for businesses to invest in their digital capabilities. 

Research by Deloitte supports this, showing that organizations with higher levels of digital maturity are much more likely to outperform their industry averages in key financial areas like revenue growth and profit margins. These companies are about 3 times more likely to report annual revenue growth and profit margins that greatly exceed their peers. This consistent pattern shows that digital transformation is a key driver of competitive advantage in today's economy.

Value in action: See how digital solutions impact business

Digital transformation is about using technology to continuously create value throughout your organization. Let’s explore some particularly significant effects on key areas:

Sales

Digital transformation modernizes how businesses interact with potential and current customers. By strategically integrating digital tools into sales operations, companies can boost both efficiency and effectiveness, leading to increased revenue and profits. 

Automating tasks like data entry and follow-ups frees up sales teams to focus on direct selling. Without these tools, sales representatives can spend as much as two-thirds of their time on administrative work instead of engaging with customers. 

Digital transformation also enables personalized customer experiences and better resource management. Notably, 80% of organizations that have fully embraced digital transformation report increased profits, and 85% have seen growth in their market share. 

Many business leaders expect a 23% higher revenue growth compared to competitors who haven't made this digital shift. For example, a kitchenware retailer saw a 15% sales increase within two months of launching a digital sales platform focused on customer engagement.

Elevate Customer Experiences

Providing excellent customer experiences is crucial for building loyalty and long-term profitability. Digital solutions enable businesses to enhance personalization and deepen customer engagement. 

By using digital tools and data analytics, companies can better understand customer needs and preferences, leading to more meaningful interactions. 

Research shows that most consumers are willing to spend more with a company that offers customized experiences. Delivering seamless experiences across all channels (online, mobile, in-store) is also vital. 

Other data show that omnichannel campaigns achieve significantly higher engagement rates (18.96%) compared to single-channel efforts (5.4%), and can lead to a remarkable 494% increase in order rates. 

More than 80% of customers prefer to buy from companies that offer personalized experiences. Companies with personalized customer experience achieve 50% higher customer retention rates and a 20% increase in cross-sell opportunities.

Optimize Operations

Digital transformation plays a key role in driving efficiency and improving organizational processes. It can lead to faster product launches and significantly improved decision-making through data analytics. A McKinsey survey found that 68% of respondents cited digitizing their operating model as a key goal of digital transformation. In recent years the digitization of companies' internal operations accelerated by an average of three to four years. The adoption of advanced technologies within operations has accelerated to over 25 times their historical average rate.

While our research here has focused on sales, customer experience, and operations, the benefits of digital transformation extend to other crucial areas like HR, marketing, finance, and business development. For example:

• In HR, it streamlines recruitment and communications, and it improves employee engagement and performance. 
• In marketing, it allows for automated, personalized campaigns based on data fine-tuned to their customer’s interests and demographics. 
• In finance, systems can model and budget to streamline strategic processes; processes for billing, invoicing, accounting, and many more standard operations can be automated. 
• For business development, it can help identify new market opportunities, analyze customers and competitors, and assist in creating strategic partnerships.
• There are no limits to the impacts of digital solutions!

There’s more than a few real-world successes

Many companies, not just giant corporations, have seen significant results from embracing digital transformation.

• Automation in marketing can lead to over 450% more converted leads in a report by the Annuitas Group.
• 6clicks cyber security boosted operational growth by over 800% in a case study
• Over 12,000 hours saved per year were saved at Salesforce with marketing operations management tools.
• ProcureDesk finds that digital solutions can save businesses 60-80% in costs related to invoice processing.
• More than 2 fewer hours per day spent on administrative tasks reported by Net2Phone.

Our own clients experienced impacts echoing the most successful digital solutions:

• Over 2400% increase in customer acquisition by MedPlus Wholesale
• EasyFix improved revenue by 4x through more sales and increasing customer retention
• And several of our clients, like Nerv Global software, reduced operating costs by nearly 50%!

Large companies are not stopping their addition of new digital tools. Audi's innovative digital showrooms have been credited with a 60% increase in sales. IKEA's focus on digital channels led to 3x more online sales. The logistics giant DHL has improved operational efficiency and customer satisfaction by using AI for delivery routes.

Benefits across the board to boost your bottom line

Beyond individual success stories, the benefits of digital transformation can be broadly measured. Companies strategically focusing on customer experience as part of their digital transformation can see a significant 20-50% increase in economic gains. Investments in technology can lead to over 10% profit growth. 

An important factor to note is that organizations with clear targets for their key performance indicators are 2x more likely to succeed in their digital transformation efforts. Companies that have achieved higher digital maturity are 3 times more likely to significantly outperform their industry averages in key financial metrics. 

Organizations that measure the value of their digital initiatives report realizing 20% more value. Businesses prioritizing customer experience in their digital strategy consistently see faster revenue growth and higher customer lifetime value. Companies excelling in customer experience can often command a price premium of up to 16% for their products and services.

There’s nothing left to wait for, you should start your digital journey

It has become self-evident that updating your business systems and embracing digital transformation is no longer an option, but it’s now a basic requirement for success. 

The good news is that digital transformation has a lower barrier to entry than ever before. The overhead and setup costs for technology have plummeted and modern methods for deployment have improved dramatically in the past few years. 

Some digital solutions providers are even transforming businesses with up to 98% lower operating costs than their peers, which virtually removes the biggest barriers to start.

The time to innovate and embrace digital transformation is now. By prioritizing your digital journey, your business can not only stay competitive but also position itself for long-term growth in an increasingly digital economy.