If you really want to unlock your company’s value, it is critical that you grab the digital technology bull by its horns. Once upon a time, digitizing simply gave companies a slight advantage and gave them a reputation for being “high-tech,” but today, in a world where nearly 95% of most companies’ customer bases are connected to the internet, digitizing is also about sheer survival. This was pointed out during the World Economic Forum Annual Meeting in 2018, and it will continue to ring true for many years to come.
Data collected by the Massachusetts Institute of Technology (MIT) Center for Information Systems found that only 23% of over 400 surveyed companies were ready for the future. In other words, only 23% of businesses had adjusted their business operations and altered the way they interacted with customers to coincide with the digital revolution. However, that same research showed that among the companies who had made the digital transition, the average net margin was 16% higher. Though it may seem as if more than 23% of companies nationwide have digitized their operations to become future-ready, there’s more to it than meets the eye.
Many, many companies out there – and perhaps even your own – have updated their customer interfaces so that they are attractive and even user-friendly. Though this is a step in the right direction, it doesn’t make a company future-ready. To do that, you must analyze your operations on the backend and consider overhauling the platforms that make your business tick. Thought fixing up the front-end of things looks nice to the customer, it’s what you do on the back-end that really counts. The same MIT research above found that among companies that digitized their front-ends without changing their back-ends, the net margins were significantly lower.
Before you set apart tearing down your business’s digital platform, take some time to really analyze your company and its place in the digital world. Where would you reap the most reward right away? The more you invest in your digital transformation, the more profitable your company will become, and ultimately, the better your company’s reputation. It’s the companies that continue to put off digitizing and those that digitize the wrong things that will ultimately suffer and procrastinating too long may cause irreparable harm. In other words, trying to make a name for a company in a crowded niche that has already been online for decades may prove impossible.
The best thing you can do for your company right now involves creating a plan to completely digitize both your front-end and your back-end operations. Make sure that you truly consider your options and make choices that are more than just a quick boost to your profit margin; think about the future and the foundation you are building for many, many years of digital success.