Staying ahead: How businesses are using digital transformation for competitive advantage

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Digital transformation is causing a fundamental shift in the way that organisations deliver goods and services to market. While the process of employing technology to improve the processes, activities and competencies of each element of a company’s infrastructure and eco-system is inward facing, its impact has a far-reaching effect on the external environment in which the business operates.

The process of transformation is gaining momentum across the globe - and across all sectors. In our recent survey of 300 B2B organisations, we found that 63 per cent of companies have a digital transformation strategy in place, although adoption rates do vary widely across the globe. In the US nearly 80 per cent of US companies have a digital transformation strategy but this figure drops to down to less than half of companies in Germany, Austria and Switzerland.

While defining a strategy is key to the success of a digital transformation project, organisations are not as far forward in delivering the programme of changes as many of us may have believed. Only 4 per cent of organisations globally have completed their roll  out, with the majority still defining their process of implementation or mid-way through a test project to ensure that their approach is right.

Of course there are challenges to the success of the digital transformation projects. Unsurprisingly legacy technology is considered a barrier to success for 41 per cent of businesses trying to digitise the infrastructure. But internal culture is also considered to be a challenge with 40 per cent facing organisational resistance to change and a further 38 per cent having to deal with disconnected sales channels prior to implementation. But this hasn’t prevented fast deployments.

Speed appears to be key for many companies who’ve embraced digital transformation. A third are ‘acting fast’ and rolling out the project in the shortest time frame possible. But many are starting with a small project so they can identify wider opportunities to digitise the business.

So what’s the urgency? Are businesses using technology to transform their infrastructure as part of forward-thinking innovation programmes? Apparently not. Our research indicates that it’s an increasingly tough marketplace that’s driving digital transformation projects. 70 per cent of respondents globally cite competitive pressures as the main reason for optimising business IT infrastructure. And threats to the business are occurring from all sides. 38 per cent of respondents feel that existing competitors are the main challenge, whereas 35 per cent see pressure from new online market entrants; and 34 per cent from cheaper overseas suppliers. This indicates that while technology has enabled companies to attack new markets, it has also fundamentally created a more competitive environment at the same time. Over a third of companies believe that failure to complete digital transformation projects will result in competitors taking advantage.

While digital transformation projects are being driven by fears of increasing competition, companies across the globe recognise that using technology to get the customer experience right will help them fight off these threats. 88 per cent believe that customer experience is important to their business growth strategy. Over half of the respondents to our survey cited customer demand as a key driver to using technology to adapt their infrastructure.

Optimising interactions

With customer experience at the heart of digital transformation projects, companies are turning to online channels to optimise their interactions where possible. Our research shows that businesses are putting their e-commerce platform at the heart of their digital transformation strategy because it’s responsible for delivering the customer experience. 87 per cent believe that an e-commerce system can help personalise their customer’s buying experience and nearly three quarters state that e-commerce plays a vital or important role in digital transformation.

It’s not just the customer experience that is benefitting from digital transformation. Organisations putting e-commerce at the heart of their strategy have gained immediate benefits. Over 90 per cent of companies have seen an improvement in sales order process efficiency, three quarters have increased order processing, and 72 per cent have decreased order errors. The improvement to sales processes ensure that companies are able to deliver the back end to the customer experience.

While B2B organisations may have been more considered in the past than their B2C counterparts in the roll out of e-commerce and the understanding that the customer experience will determine their competitive positioning, most have fully embraced online platforms as a route to market. Nearly three quarters of companies will use their e-commerce systems to sell overseas, and a further 72 per cent believe that they will sell all of their product lines online in the future.  

e-commerce is delivering clear ROI – in many cases in less than six months after implementation. Organisations have experienced, on average, a 22 per cent increase in revenue growth since implementing their e-commerce solution and they expect it to further increase revenue by another 23 per cent within the next two years.

Having embraced digital transformation as a way to meet competitive threats, B2B organisations are using it to deliver more advanced experiences to the market. Nearly 70 per cent of companies will use the Internet of Things or machine to machine to enable automated and/or predictive ordering for customers. 67 per cent believe that virtual reality will help personalise the B2B buying experience and most surprisingly two thirds will start using driverless cars or drones for delivery.

It’s clear from our research that companies are using technology to transform their processes, methods and their approach to new and existing markets. Underpinning their infrastructures and delivering efficiencies back to the business simply make it easier to compete and do business in new and existing markets. Yet it’s imperative that B2B organisations move their digital transformation projects on if they’re to remain competitive and benefit from the new opportunities that technology brings. Eat or be eaten is the new mantra.

Michiel Schipperus, CEO at Sana Commerce
Image source: Shutterstock/Wichy