Why is it necessary to scale your business using digital transformation?
Most companies, from start-ups to scale-ups to legacy companies, focus on how to scale their business by leveraging digital transformation. Established companies are finding it necessary to embark on a digitalization journey, not only because of competition from incumbents but also because of new competitors entering the market with innovative new digital technologies at a rapid pace.
This may be a lot more achievable for larger companies who have bigger digital budgets, but for those startups and smaller-sized enterprises, implementing digitalisation can be a real challenge.
Another reason for undertaking such a journey is regulatory requirements. This is particularly relevant for certain industries, such as in the FinTech space, the insurer tech space, banking and other financial institutions. Regulators are pressing for established businesses to join the digital revolution. If they don’t implement them, they risk relinquishing their business licence to operate and becoming non-existent.
Here are the ways you can successfully scale your business using digital disruption and innovative technology.
Step 1 – Set clear operational goals & manage the data
For any digital transformation journey to succeed, you need to have aligned and strategic goals within your business. You’ll need to take on board innovation from inside the company and externally when relevant – including a strong understanding of workflows and data.
Most companies fail with digital transformation by not having a clear mapping and limited understanding of the data they will need. Set your company’s focus, whether that be on automating processes, improving customer experiences or enhancing internal operations. A shared vision among team members and stakeholders leads to greater success and contributes to accountability as key performance indicators can be set and tracked.
Setting clear goals helps evaluate the impact of digital initiatives on the overall business strategy down the line. AI decision-making services, informed by analytics, can help shape these goals and business decisions, by identifying risks, analysing market trends, customer behaviours, and areas for improvement. C3.ai is one service already offering this for businesses.
Step 2 – Enhance customer experience
It is essential to focus on the improvement of the customer experience when scaling your business with digital transformation. At the end of the day, scaling your business with disruptive technology won’t be possible without your customers and clients on board. New technologies allow for more data-driven insights to understand customer behaviour and preferences than ever before.
You can also leverage digital tools to personalise customer interactions as well as measure and improve customer satisfaction. By prioritising optimisation through digital transformation services for customers, you make your company more competitive when compared to other companies.
Step 3 – Leverage data analytics and cloud computing
It really is true that everything within digital and technology integration essentially comes down to data and analytics. Companies should be aiming to optimise centre Elastic Cloud computing which is the ability to quickly expand or decrease computer processing, memory, and storage resources to meet changing demands.
Many companies are bringing in Elastic Cloud computing to replace legacy systems. Depending on your industry, whether it’s regulated or not, or if it’s financial services, banking or commerce, you might explore not only cloud computing but hybrid computing as well.
Step 4 – Optimise through automation
The importance of optimising through automation when scaling a business through innovative technologies is another facet which cannot be overstated. Automation can help scale businesses by streamlining processes, reducing manual workloads and allocating resources more effectively. If you often find yourself being available for work at all times and often needed for tasks all hours of the day, automated services can hugely change how you operate.
Automated services can also operate 24/7 and do not need a person managing it all the time. By identifying your company’s repetitive and time-consuming activities, organisations can implement automated solutions which save time and minimise the risk of human errors.
For scaling businesses that are taking on increased workloads, putting automated processes in place allows employees to focus their time on high-value tasks which require critical thinking and creativity. Automation is a critical step in the digital transformation journey which propels businesses toward scalability by unlocking the full potential of staff.
Step 5 – Focus on change management
A focused effort on managing change management is also essential for any tech-driven transformation project. Scaling a company using digital transformation will lead to a change in organisational dynamics, workflows, and employee roles. Change management facilitates a smooth transition by fostering employee engagement, communication and training programs which address uncertainties and apprehensions.
The human side of the technological revolution must be addressed. Talk to your partners, employees, customers and clients and get them on board too. Answer and address their concerns about how this technology may disrupt their previous processes.
This way, scaling companies can mitigate resistance to new and disruptive tech, enhance adaptability and build a culture that embraces innovation. A change management strategy is ultimately crucial for maximising the benefits of digitalisation and creating a resilient and adaptable company in a quickly evolving business landscape.
Step 6 – Cost and time management
Cost and time management cannot be ignored for a company attempting to scale using digital transformation. For any innovative technology or digitalisation project, you always have to focus on cost and time management. Setting clear KPIs can help you measure results.
Setting the correct budget for the project also helps you to set a focus on the future and the way forward. A clear timeline is also crucial in ensuring the success of a transformative initiative. Technology evolves rapidly, as do regulations on the technology. If you create a timeline which is too long, the new technologies and regulations may become a challenge to your new initial project. Too short of a timeline, and you might not see strong results. That’s why measuring your goals and costs is essential when creating a timeline for project results.
Rigorous cost and time management practices enable organisations to prioritise tasks, allocate resources efficiently, and assess results effectively. Prioritising time management will also allow your company to position itself competitively in the business landscape and allow for sustainable growth during the scaling process.
For example, Amazon’s project for creating physical stores named Amazon Go cost the business approximately $1 million dollars in hardware alone to open the first store.[1] The digital transformation project aimed to set up stores which have no lines or checkouts and are controlled by your Amazon account on your smartphone.
Amazon Go began in beta in 2016 and as of 2023, there are 23 Just Walk Out stores across the US and UK.[2] This shows not only the large costs involved in a major digital transformation project but also the extended timeline it takes to see results.
Another example is Meta’s implementation of the Metaverse. The Metaverse is a virtual-reality space powered by users with VR headsets who can interact in real time with others with virtual avatars. According to Business Insider in 2022, Meta has spent $36 billion on the Metaverse since 2016.[3]
The division so far remains largely unprofitable, with CNBC reporting Meta lost $13.7 billion on its Reality Labs division in 2022.[4] Business Insider reported earlier this year that Meta’s AI division has become a “top priority” with “Zuckerberg’s pivot to virtual reality looking significantly out of touch.”[5] This exemplifies how expensive digital transformation projects may be timed based on public and business priorities and interests and how businesses may need to quickly pivot their digital transformation aims.
Conclusion
Scaling your business through digital transformation is an endeavour which requires both strategic and holistic approaches. By setting clear goals, prioritising change management and managing cost and timelines, organisations can effectively manage the complexities of scaling with new and disruptive technologies.
Leveraging cloud technologies, optimising processes through automation, and enhancing customer experiences can contribute to operation efficiency and market competitiveness. In a rapidly evolving business landscape, businesses that skillfully integrate these elements into their digital strategy are poised not only to scale but to thrive in an era defined by technological advancement and digital excellence.
About Rafael S. Lajeunesse
Rafael is the CEO of ReachX and is responsible for driving the company’s vision to be the trusted platform for institutional investors and corporates. ReachX is a digital investment bank that offers tech solutions, access to capital and talent to growth companies and institutional investors. Prior to founding ReachX, Rafael worked in consulting with Fortune 500 companies with McKinsey and as an investor with JJP Morgan.
[1] Amazon Plans to Build Thousands of ‘Cashierless’ Stores Across America. Bloomberg, September 19 2024. https://time.com/5401213/amazon-stores/
[2] Amazon Go is a new kind of corner store. https://www.amazon.com/b?ie=UTF8&node=16008589011
[3] Meta has spent $36 billion building the metaverse but still has little to show for it, while tech sensations such as the iPhone, Xbox, and Amazon Echo cost way less, Jyoti Mann, October 29 2022. https://www.businessinsider.com/meta-lost-30-billion-on-metaverse-rivals-spent-far-less-2022-10?r=US&IR=T#:~:text=Meta%20has%20spent%20%2436%20billion,Amazon%20Echo%20cost%20way%20less
[4] Meta lost $13.7 billion on Reality Labs in 2022 as Zuckerberg’s metaverse bet gets pricier. Jonathan Vanian and Ari Levy, Feb 1 2023.
[5] How AI Replaced the Metaverse as Zuckerberg’s Top Priority. Aisha Counts and Sarah Frier, January 11 2024. https://www.bloomberg.com/news/features/2024-01-11/mark-zuckerberg-pivots-to-ai-from-metaverse-to-further-his-legacy?leadSource=uverify%20wall
