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Why Do You need Digital Transformation Consulting Services?

Digital transformation consulting Services can mean many different things to different people.

According to Ray Wang, principal analyst and founder of Constellation Research Inc., digital transformation consulting services define “the methodology in which organizations transform and create new business models and culture with digital technologies.”

Wang goes on to flesh out his definition, saying that any business that expects continued growth in the future needs to have the tools, people, and processes to take advantage of modern technology.

Digital Transformation Is Not Cheap

The large majority of successful digital transformations require significant expenses to undertake. You really can’t “do” digital transformation consulting services without a good bit of new hardware and software, as well as new employees with the requisite skills to get optimum value from these new technologies.

Constellation Research notes that firms all across the globe spent over $1.2 trillion on digital transformation in 2017, almost 20% more than they spent in 2016. Moreover, Constellation projects that total investment in digital transformation worldwide will continue to move upward at a good clip to reach $2 trillion by 2020.

ROI Does Not Tell the Whole Story

The costs of digital transformation may be hard to justify if the transformation if only few people can understand the process for developing new products and business strategies so the enterprise can compete in the rapidly evolving here-and-now as well as the future. 

Today, you can measure  business investments on the basis of payback period, internal rate of return (IRR), or some type of break-even analysis. At its most basic level, ROI is taking the profit from the investment and dividing that by the cost of the investment. 

That means for many standard ROI calculation methods we are using today makes digital transformation often appears to look like a poor investment. But that is almost always short-sighted thinking.

Think about it. If you spend a couple of million dollars for the top-of-the-line inventory management technology, it typically looks on paper that the digital transformation has a notably lower short-term ROI compared spending two million dollars on new product development or even a one-off marketing campaign for immediate increase in sales and a boost to the bottom line. 

It is pretty obvious that relying on aging systems to support the business activities of the future is a losing strategy. At some point, the lack of investment in the future will negatively impact the enterprise.

Digital Transformation Consulting Services Create Savings Throughout the Business

If  you carefully plan and execute it, a digital transformation will nearly always save your business money in the long run despite the poor ROI projections.

The transformation itself as well as the cost savings ramify throughout the enterprise over time. Eventually, the various divisions of your business will work together to improve processes. You need to take steps to bypass inefficiencies and automating steps in business processes that need expensive and time-consuming effort from employees or suppliers. 

Moreover, IT capital expenses are typically reduced over time and those expenses gradually transfer to the operating budget as the business takes advantage of the convenience of the cloud. Digital transformation also dramatically revamps the product development cycle. New tools allow for greater innovation, which results in shorter design cycles and less development time. 

With a carefully planned digital transformation, you can also create a variety of new feedback loops spanning the enterprise. So you can now own several useful new data sets such as videos, social media posts, and point-of-sale transaction data. 

Employees with the Right Skillsets Is Critical to a Successful Digital Transformation

For many businesses, it is actually less of a challenge to purchase and integrate the new platforms and software required for your digital transformation than it is to find employees with the right skill sets to manage the new technology. 

This means that digital transformation requires developing a new talent strategy. According toRay Wang, managers of businesses today are best off searching for talent with a general aptitude for learning. That is because technology needs to change rapidly in the 21st century, and in many cases. The necessary skills needed to support new software and platforms can be learned in months or even weeks. 

Effective Learning Systems

The lesson to be learned is that you really need to develop effective learning systems to enable employees to skill up for their new tools at the same time you actually purchase the tools (if not before!) Not having self-paced learning systems in place so your team can all get on the same page when you make the transition is a common problem in executing a digital transformation. 

Thinking ahead to provide your team with learning tools to help them get a grip on their new jobs greatly increases the odds of a successful long-term digital transformation project.

Contact Rocksauce studio today! We will give you the best professional advice for your business.