Discover all the Smart Security Summit on-demand sessions here.
As we battle the current inflation crisis and market downturn, it is becoming increasingly difficult for businesses to stay competitive. Increasingly, organizations are looking for ways to reduce costs and optimize existing assets and processes.
For many, this will mean suspending all non-essential projects, digital transformation initiatives included. If your organization already has working digital strategies and processes, spending money on newer, shinier digital projects seems counterintuitive.
Unfortunately, this intuition is wrong. It’s a relic of a recently bygone era to assume that digital projects are anything but essential in times of market downturn. The business world is becoming more digital every day, despite the market. With the threat of recession looming, Gartner still predicts that global IT spending will reach $4.4 billion this year. Additionally, in a 2020 survey, Deloitte found that more digitally mature organizations saw 45% revenue growth, compared to 15% for less mature organizations. If possible, organizations to have to embrace digital change or risk being left behind.
Address digital strategy
While it’s important to keep up with digital trends, how organizations go about creating a digital strategy can make the difference between following and get ahead of competitors. However, the level and type of digital work that businesses should undertake will vary greatly from organization to organization.
Pragmatically, this will inevitably involve investing a lot of time in research. For example, some organizations will benefit immensely from investing in automating their internal processes to save on labor costs. For others, investing the bulk of the digital budget in building digital brands, demand and lead generation programs, building content leadership and leveraging social media platforms to drive traffic would be more. useful.
Researching how competitors are spending their digital budgets can also help inform your strategy, as you can collect market-tested data on what is and isn’t worth the investment. This strategy can be accompanied by broader internal and external data collection. While sifting can be tedious, the more data collected on internal processes, staff satisfaction, digital customer experiences, and end-user trends, the more focused and effective the digital strategy will be.
Benefiting from know-how
Another thing to keep in mind is that many companies don’t use their available expertise effectively.
It may have something to do with the fact that many business leaders are unaware of their knowledge gaps. In our own research, we found that 73% of board members in UK family businesses have no digital skills. Re, Selling power found similar knowledge gaps. In a 2022 Salesforce survey of more than 23,000 workers in 19 countries, 54% of senior leaders surveyed said they have the digital skills needed today. However, less than half of managers and employees surveyed agreed, meaning senior managers were unaware that they lacked adequate digital expertise.
part of being digitally aware it’s knowing that the digital world is changing at a rapid pace and most business leaders don’t have the time or ability to constantly keep up. From there, becoming digitally mature involves embedding digital components throughout the organization and its business strategy. For this to happen, organizations need to start consulting with CTOs and digital teams on a much more serious level. This could mean involving senior IT leaders on the company’s board of directors or creating a separate digital council to manage digital projects at a senior level. This could even mean bringing in outside consultants.
We’re in a digital skills crisis, but taking digital offerings seriously can help retain IT staff and grow your customer offering while competitors suspend digital investments.
Digitization has obvious advantages. For instance, automate your internal processes with AI can save on labor costs; performing website testing may generate traffic; and improving digital marketing channels can improve customer engagement. And, if there was ever a time to digitize, it’s when your competitors are stepping down.
Plus, as valuations come under increased pressure, digital power can make all the difference. Digitization is also seen as a key value driver for investors, as we are currently seeing strong ties between financial performance and digital maturity. Investors are increasingly performing digital due diligence as a valuation factor, so the smallest step can make the most significant difference.
As companies struggle with factors such as inflation, high interest rates and weak EBITDA arbitrage, investors struggle with uncertainty as they seek to allocate vital funds. In the long term, continuity is essential for investors because, ultimately, the safety of their investments is never guaranteed. Continuity is therefore a vote of confidence. Organizations that can continue to develop their digital strategies and innovate will encourage critical new investments.
Assuming a budget is available, digital transformation can be a sure path to capturing market share while others go on the defensive. The objective could be to improve internal and external digital services; encourage a high valuation or investment figure; long-term cost savings; or any other combination of reasons.
Either way, a digital strategy can affect not only a company’s ability to survive the recession, but how well it survives the recession.
Stefan Sambol is co-founder and partner at OMMAX
Welcome to the VentureBeat community!
DataDecisionMakers is where experts, including data technicians, can share data insights and innovations.
If you want to learn more about cutting-edge insights and up-to-date information, best practices, and the future of data and data technology, join us at DataDecisionMakers.
You might even consider contributing an article your own!