Keeping up with rapidly changing technology is a major challenge for many businesses, yet it’s vital for long-term success.
Technological changes impact how people look for solutions, interact with brands, and much more. Growing your brand in the 2020s requires a digital presence and implementation of modern tech. Companies that fall behind the digital landscape struggle to remain competitive.
For that reason, many large organizations undergo a complete digital transformation. They hire a “digital transformation expert” or agency to implement technology throughout all areas of operations.
At first glance, this seems like a great idea. But what does a digital transformation entail? How much does it cost? Is it right for small to medium businesses?
Let’s break down more about digital transformation and what the right solution is for small to medium businesses.
What Does a Digital Transformation Entail?
A digital transformation is about design thinking. That’s actually something that designers have been doing for a long time, but it’s a newer concept on an organizational level. The process involves making major business changes to processes and teams. It’s not just about adding tech tools, but about using technology to transform how the business operates.
The Purpose of a Digital Transformation
There are many reasons why companies turn to digital transformation. Ultimately, it’s about improving the customer experience and team experience in a way that fosters business growth.
Overall, the top areas that a digital transformation addresses are:
- Customer experience
- Supply chain management
- Product development
The transformation involves a myriad of different solutions depending on the company and it’s needs. Commonly, web design, customer relationship management tools, updated POS, analytics tools, and many others make up the digital transformation.
Consider a local catering business. Business management software (one common part of a digital transformation) helps with scheduling, invoicing, and more. This software can automate these processes, allowing potential clients to make orders without waiting.
A digital transformation could also help your employees to communicate with few barriers using various software and AI solutions. They can work on projects together in real-time from anywhere, share files, and access information quickly.
A Digital Transformation Strategy
Making a digital transformation is not as easy as just creating a website or changing a few elements on one. It requires extensive research, diligence, and perseverance.
The exact path for digital transformation depends on the specific company and its needs. When starting your digital transformation journey, you must identify your goals and desired outcomes. Evaluate your current operations and where technology could improve them for customers, employees, and/or profitability.
A basic outline for the transformation includes:
- Define your mission, vision, and strategy. You need to be clear on these to ensure your digital strategy aligns with your brand.
- Outline metrics for the transformation. What does success look like for you? How will you measure it? Lay out the most important operational metrics.
- Assess potential digital initiatives. There are several digital options you can consider. Assess the pros and cons of each to determine which are best for you.
- Define the human component. Define how your team will need to adjust to accommodate the transformation.
- Plan implementation plans. A digital transformation is not an overnight process. How will you implement the new technology and systems strategically?
Digital Transformation vs Rebranding
A digital transformation can be part of a rebranding initiative, but a company undergoing a digital transformation does not necessarily have to rebrand itself. Digital transformation modifies how companies operate. Rebranding, on the other hand, instigates change by modifying a company’s mission, communication style, or core identity. Rebranding is more about the corporate image. The transformation does not need to include branding, name, logo, or mission changes.
The Cost of a Digital Transformation
Very few businesses have an in-house team that can handle the digital transformation. Those that do are typically very large businesses that have the resources to hire, train, and manage technology and strategy employees
Even so, many large businesses opt to hire a digital transformation team. These teams typically have technology personnel and strategy personnel.
Companies around the world were predicted to spend a total of $6.8 TRILLION on digital transformation in 2023. That’s more than 4.5 times the $1.5 trillion dollars spent globally on digital transformation in 2021.
Unfortunately, there’s no set cost to plan for with these agencies. Instead, the cost depends on several factors. The specific agency, your goals, your current technology, and many other considerations all affect the cost.
The only way to really know what type of expense you’re looking at is to schedule a strategy call with an agency. Very few provide transparent pricing online. Instead, they want to rope you into a strategy call. The call alone can cost thousands of dollars, and that’s before you’ve seen any value.
ROI of A Digital Transformation
Hiring a digital transformation team is expensive, but what kind of ROI can you expect? The return on investment (ROI) helps you understand if the investment is worthwhile and effective.
Remember that a digital transformation can improve several areas of a business. So, the ROI may expand beyond increased profits to reduce costs, higher customer satisfaction, and more.
According to an Avanade survey of over 1,000 global decision-makers, organizations experienced an average ROI of 17% from digital transformation. They reduced costs by 10% and increased productivity by 11%. Likewise, research from Zippia found that 56% of CEOs reported improved profits from digital improvements.
While a digital transformation can offer a strong ROI, the cost may still be too high to justify for many small to medium businesses. Additionally, it takes some time to see the effects of the transformation, time to wait that many smaller companies don’t have available. Trying to handle the transformation alone may seem like a cost-effective option, but very few small to medium businesses have the in-house capabilities to do so.
Is a Digital Transformation Right for Small to Medium Businesses?
To determine whether a digital transformation is right for you, consider your goals and available resources. You must weigh the benefits and costs of a digital transformation and determine if it is the right solution.
Many enterprise companies can bear the costs of outsourcing a digital transformation. However, small and medium-sized businesses cannot realistically afford the cost. Smaller teams may already struggle to keep up with the daily demands of business, so the exorbitant expenses can be too much to bear.
But that doesn’t mean that you can fall behind in technology. An expensive agency may not be an option, but it’s also not necessary. Instead, turn toward more affordable alternatives that can help you implement technology and improve your digital presence.
Transform Your Business with Matcha Design
Improving your operations and customer experience with technology is a must for businesses of all sizes. But most small to medium businesses cannot afford, and should not spend the money on, a transformation agency.
Instead, revamp your online presence and improve your customer experience with the help of our experienced design team at Matcha Design. Our full-service digital marketing agency in Tulsa can help you create compelling, engaging, and interactive content tailored to your target audience. With our powerful digital marketing and branding solutions, we’ll help your business stand out in a crowded market. We offer professional, affordable Web Design, Marketing Campaigns, UX/UI Design, and more to help you take your brand to the next level.
Contact Matcha Design today to find out how we will bring your vision to life.