The Cost of Digital Transformation

Not too long ago, businesses relied on hard paper copies of records and wet signatures to keep track of information. To transfer documents back and forth, they used forms like mailing, faxing, xeroxes, and in-person meetings. Ultimately, this lengthened transaction processes for both the business and its customers. There was too much paperwork involved, making such activities undesirable to take part in. Now, businesses are adjusting to newer and more digital ways to interact with both internal and external parties, such as customers. In other words, businesses are taking part in digital transformation. All of the paper records and handwritten signatures are being replaced with eForms, eSignatures, and more. Although digital transformation involves the cost of adding new technology, the right technology will ultimately pay for itself thanks to greater customer loyalty, efficiency, and speed.

What is Digital Transformation?

Digital transformation is when business processes, culture, and customer experiences are created or altered with the use of new digital technologies. In turn, changing business and market requirements are met and the entire business is reinvented. Digital information is very customer-focused, meaning that it is all about customer engagement during the transformation of going from paper to digital. During the process, businesses are revisiting every aspect of everything they do to create the ultimate digital experience for all.

A Successful Digital Transformation

When a business undergoes a digital transformation, they are not only focusing on technology opportunities, but also the culture, leadership, risk, and investment opportunities associated. Simply hiring a professional IT and design thinker is not all it takes -- you need to continuously adjust every day to keep up with demands and technological changes. According to McKinsey, there are five factors to a successful digital transformation:

1. Having the right, digital-savvy leaders in place
2. Building capabilities for the workforce in the future
3. Empowering people to work in new ways
4. Communicating frequently via traditional and digital methods

With all of these factors in place, the successful transformation will then lead to a successful customer experience, which is the ultimate goal. So, with the right tools and workforce, there will be a more efficient experience for all.

The Costs Digital Transformation

The numerical “cost” of digital transformation is nothing compared to the benefits businesses reap in the end. However, it is important to know the costs to ensure you plan ahead to create the best end experience. There is not one specific software that you can purchase to instantly see a digital transformation. It requires a significant investment of both money, time, and effort. In fact, The International Data Corporation (IDC) predicts that global spending on the necessary technologies and services for digital transformation will trach $2.3 trillion by 2023. The financial services sector will see the fastest overall growth with new investments in banking, insurance, and security services. According to a Forrester report, companies are continuously investing in new technologies, applications, and platforms (32%) as well as upgrading legacy systems (32%) in an effort to meet digital transformation goals. Other external costs to consider include:

• Mergers and acquisitions
• Partnerships
• Divestment and restructuring

Each business deals with these topics differently, depending on their financial situation, goals, and capabilities. However, they are still always important to factor in. Additionally, there are many risks involved in digital transformation. In fact, 70% of digital transformation efforts fail to reach their goals. If the right precautions are not taken, the costs of the transformation become even greater. Five digital transformation risks to avoid are:

1. Ineffective digital transformation premises
2. Missing the skill set for product deployment
3. Attempting to transform alone
4. Not having digital transformation experts and mentors
5. Not proving the value from the start

What You Get From Digital Transformation

Yes, digital transformation comes at a cost, but the benefits outweigh any of the costs involved. The costs of all this new technology and training ultimately result in an even greater return in the form of customer loyalty, efficiency, and speed. And with all of these things, your business will be even more successful and profitable. Some benefits of digital transformation include:

• Better customer experience

By eliminating annoying paperwork and time-consuming transactions, customers become much more open to working with you. When they can complete more actions from the comfort of their own homes, they face a more convenient experience. And once customers get a taste of such convenience, it is all they want -- there is no going back. Almost 50% of all companies even said that improving customer experience and satisfaction was the main reason for them to start digital transformation

• Data-based insights

With newer technology, businesses can track metrics and analyze data to further optimize their strategies. This newly obtained data allows you to see what your customers like and dislike, allowing for hyper-personalization, real-time feedback, and flexibility.

• Encouraged collaboration

When digital transformation occurs, it occurs throughout the entire company, not just one section. This creates a new level of unity, new forms of communication, and overall stronger company culture. And with a strong, united workforce, efficiency and productivity levels increase.

• Updated knowledge and skill sets

The introduction of new technology forces both employees and customers to learn how to use it. This knowledge is vital nowadays because technology is always updating and is used practically everywhere. We are constantly learning more about AI, cloud-based platforms, data analytics, and more.

The bottom line

Digital transformation does require immense planning and hard work to make the new business successful. But, despite the costs involved, investing in a digital transformation will pay dividends that ultimately exceed the original cost. Learn more about how Lightico’s eSignature, eForm, digital document collection, and electronic payments can help support a digital transformation at Lightico.com.