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  • Armin Wieland

Why Digital Transformation (DX) is crucial for your Bottom Line

Updated: Dec 5, 2022

There’s a lot of buzz around the concept of “Digital Transformation” (DX), but what does it actually mean for you and your business?


Digital transformation is the process of shifting your organisation from a legacy approach to new ways of working and thinking

What pops into your mind when you hear the words, Digital Transformation? Most people think of information technology, automation, and selling products and services online. This is true but few people know about the factors needed to support and ultimately guarantee the success of this technology.


In order for your business to be in perfect balance, you need the Yin of technology and the Yang of a new way of thinking.


An MIT and Capgemini study titled “The Digital Advantage: How Digital leaders outperform their peers in every industry” found that there are two major spheres that businesses must tackle in order to reap the financial rewards of Digital Transformation:

The First is: Digital sophistication of technology


There is no getting around it. You need good tech! For a business to keep up in the current climate it needs greater automation, customer engagement, and efficiencies. This means investing in things like location-based marketing, connected products, mobile sales, social media communities, and optimised pricing.

Luxury fashion brand Burberry, for example, increased profits by improving its in-store customer experience and operational efficiencies using a range of retail-appropriate digital technologies.

The second is: A paradigm shift

This part of the Digital Transformation equation is often ignored to the detriment of the business. Leadership needs to adopt a new way of thinking. They need to be on board and inspire all other departments to embrace cross-silo coordination, an evolved company culture, IT-business relationships, and skills development.

Leading car brand Volvo is noted for the vision and governance competencies it produced prior to rolling out new digital services in its vehicles. These features set them apart from competitors and drove sales.


The above-mentioned study of over 400 organisations from a wide range of industries found that when a company addresses both of these spheres (companies the study calls the “Digirati”), they beat their competitors in terms of profit by up to 50%.


Interestingly, businesses that focused just on digital sophistication (dubbed “Fashionistas”) did not reach the profitability of those who invested mostly in developing management competencies (dubbed “Conservatives”). Companies who had invested little into either arena, “Digital Beginners”, were the least profitable.


For Digital Transformation to occur, someone needs to take the reins and lead the enterprise forward. While it's debatable as to where in the organisation this push should come from, studies have shown that effective change only happens when IT leaders expand the scope of their role to become business technology managers.


Digital Transformation experts Xuviate argue that this concept of Business Technology Management (BTM) is so vital that it should replace the more static concept of IT.


The worth of investing in BTM can be championed to business leaders by mapping the value propositions that digital transformation brings to the organisation.


Primarily, BTM aids in finding and implementing the most appropriate, cost-effective platforms to advance businesses' objectives.

Secondly, using technology as value-driver ensures that business processes are optimised, which leads to cost-saving efficiencies.

Thirdly, when used intelligently, IT can help differentiate a business from its competitors in the market.

Finally, the fundamental transformation of the business toward the smart adoption of the right technologies aids the survival of companies as the marketplace moves increasingly toward digital.


Effective change can transpire when IT leaders expand the scope of their role to become business technology managers.

It can be difficult to determine the first step or even the next step for your business's journey toward digital maturity. It all starts with a digital transformation strategy that establishes the scope and objectives for your digital transformation.


It's important not to focus too heavily on the operational side of your business at first, and rather consider more strongly the ways in which your business can benefit from growing into relevant digital spheres. Then you can identify the skill gaps that need to be filled for your vision to be realised.


Once the vision is established and the strategy to achieve it is in place, you need all the members of your organization to buy into the idea.


An MIT Sloan study showed that employees across all age groups want to work for a business that is committed to digital advancement. Once a digital culture is fostered, leaders can guide the business to invest in the right digital opportunities.


As you progress, keep in mind the two-pronged approach of the Digirati. This profit-driving approach ensures that your company is creating value for customers along with digital transformation, rather than just keeping up with trends.

It's important to remember that different organisations take different paths to digital maturity. Every business will have a unique digital journey that is aligned with the needs of the business and its customers.


V5 Digital, a leading digital marketing agency based in Windhoek, Namibia begins the process of digital transformation by helping you develop your unique digital business model.


Whether that involves using digital to sell your products or services online, or connecting with your customers on social media, V5 Digital specialises in crafting fine-tuned, clear, agile, digital transformation strategies to help your business succeed.


Don’t hesitate to contact V5 Digital for a free assessment or to help you decide whether investing in digital transformation is the right next step for your business.



Are you interested in the State of Digital Transformation?

Download the comprehensive research report from our collaboration partner Altimeter, a Prophet Company.


To learn more about this topic listen to V5 Africa: Why Digital Transformation (DX) is more than just a Fad


Download it here: https://www.v5.digital/africa


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