Digital Transformation

What Do Business Digitization Strategies Look Like Today?

What is a business digitization strategy? Learn more about how businesses are investing in technology to digitize their processes.

Blog Post

8 minutes

Oct 17, 2022

Business digitization remains a key and essential aspect of modernizing any organization. More and more businesses are looking to digital means to collect and store data, communicate, and manage key business processes. Though the main goal of this kind of digitization is simplicity and making life easier for employees and customers, it’s also a complex thing to implement due to the required technical knowledge and industry experience needed to do it correctly.

As organizations more frequently compete on the basis of their ability to leverage data and technology, it becomes more important for companies of all sizes—especially SMBs—to embrace new solutions in order to keep up with the pace of change.

But, how does a company get started? What are the most sought-after technologies? What are the key digital transformation objectives for companies? What are business leaders’ concerns?

These are the questions whose answers lead you to a more promising digital future and which will be answered below as we walk you through what a business digitization strategy looks like today and in the future.

The Need for Business Digitization

What are the primary factors that are driving business digitization?

Broadly speaking, there are three key drivers that are behind increased investment in business digitization.

These can typically be defined across the following areas:

Cloud Security

Cybersecurity is a big concern for companies currently. The need for it is only exacerbated when so much of a business’ data is stored digitally via the cloud. Previously an issue that has only dogged larger enterprises—which often already have established programs for security—cyberattacks have been increasingly targeting SMBs due to them typically being an easier target because of a lack of established cyber protocols. Malicious actors now have many more attack vectors they may never have previously targeted.

This is compounded when businesses offer hybrid or remote work to employees. With remote work circumstances, employees are almost certainly operating within home networks which do not have the same standards of protection when compared to business networks.

No companies are less prepared to meet modern cybersecurity standards than SMBs. For the most part, SMBs invest less in their security than their larger counterparts, they’re less likely to have an existing plan in place, and less likely to have a dedicated security team; relying instead on IT staff or no one at all.

Businesses spend $170,000 on average to fully resolve data breaches after being hit.

A combination of these factors means that cloud security is a major consideration for businesses when investing in business digitization programs, as demonstrated by country-wide spending on security, which we will get into soon.

Cloud Services

The second big driver of business digitization strategies is the adoption of cloud services.

For most of the 2010s, there was a certain reluctance by businesses across the country to embrace cloud technology adoption fully. While in 2011, 51% of organizations had at least one portion of their computing infrastructure based in the cloud, that figure had risen to 81% by 2020 and in 2022, 94% of enterprises are using cloud services. These numbers are expected to increase further in the next decade. Why? Because many of the fears of cloud storage (security, feasibility, cost, etc.) have all become quelled by innovations in cloud technology and digitization.

The improved availability and affordability of previously out-of-reach technologies—not least those pertaining to advanced analytics, AI, and automation—has opened up a wealth of opportunities for small and midsized businesses to take advantage of. As a result, companies have scrambled to invest in cloud services, seeking to stay abreast of their competitors who are already gaining key market advantages through the use of cloud services in their operations.

Previous concerns about cloud services, particularly pertaining to security and compliance, are quickly subsiding as the data centers operated by service providers become more secure—today typically rivaling or surpassing most on-premise servers.

Security concerns (44%), compliance and regulations (42%), and lack of application support (41%) are the most reported barriers to full cloud adoption.

Business Operations

The need for businesses to improve their operational efficiency is nothing new, and business digitization strategies implementing modern solutions today are serving this same purpose.

Business processes, particularly regarding common workflows within operations such as data entry, are easily automatable through new technology. Early technology adopters of these new innovations saw the benefits of implementing practices like digital document workflows and automation which has necessitated their competitors to do the same. The benefits of these technologies in business operations are too great to ignore, that’s why the adoption of new tech is so common.

65% of businesses are currently looking to digitally transform in the near future.

These organizations that have successfully streamlined many of their processes are able to re-invest previously wasted resources in other aspects of their operations, too.

When you also consider the amount of data that now flows in and out of businesses, in many cases, there is simply too much to deal with effectively.

Employees spend an average of 1.8 hours every single day searching and gathering data—that’s 9 hours per week that could have otherwise been spent doing something more valuable.

Furthermore, as we noted above, there is an increased appetite in businesses to utilize cloud services. This is the best way to leverage the large volume of data sets that exist within organizations. For the majority of companies, this means the adoption of cloud tech that facilitates the handling and use of data and information in a way that improves their operations.

Top 3 Objectives for Technology Spend | Infographic

Top Initiatives for Business Digitization

With the key drivers for business digitization in mind,  let’s take a look at the solutions businesses are pursuing in order to meet these business digitization goals.

1. Data and Business Analytics

Software applications that support the use of data and analytics is the area in which IT departments are spending the most, according to a 2021 study by CIO.

Many companies that have invested in business intelligence (BI) services have done so to improve their ability to use data effectively.

The business intelligence market is valued at $24 billion as of 2021, up from $8.8 billion in 2020, and is projected to reach $43 billion by 2028

While larger enterprises have been implementing BI for several years, it’s only recently become a key objective for smaller businesses, with many reluctant to do so.

2. Security and Risk Management

Just behind data and business analytics is heavy investment from businesses in security and risk management, with 37% of IT leaders upping their budget for it.

This comprises cybersecurity solutions that are able to protect a modern work environment and maintain compliance standards—this is particularly important for organizations operating in specific industries like healthcare or finance.

The kinds of technologies adopted by companies will be solutions like perimeter security, endpoint protection, information security (infosec), authentication, backup and disaster recovery (BDR), and network monitoring.

3. Cloud-based Enterprise Applications

From an operational standpoint, cloud-based applications are becoming more significant in terms of the role they play in business operations.

So, when organizations look to improve their operations, they will largely be implementing cloud-based enterprise applications.

These are typically in the form of enterprise resource planning systems (ERP), which allow businesses to centralize their data and streamline their operations through the use of automation.

Legacy applications can often be integrated into cloud ERPs, meaning they can provide a lot of flexibility for SMBs that still rely heavily on older technology.

Having said that, many organizations are choosing to replace their legacy software entirely in favor of cloud-based solutions, and it’s certain that cloud applications will be dominant in the near future.

Businesses are increasingly replacing older systems, with 32% of respondents in a survey indicating their recent technology initiatives involved replacing legacy solutions.

4. Customer Experience Technology

The last major area where businesses are fast increasing their investment is in customer experience tech.

For the majority of organizations, this will in some form regard investment in custom mobile applications for their client base.

It can also include the implementation of website integrations like chatbots to improve customer service.

Businesses are turning to apps to bolster their digital presence and to meet the challenges of scalability and functionality. Today, 67% of small- and medium-sized businesses (SMBs) have an app.

The reasons for businesses turning towards apps is simply that customers are more comfortable than ever using their phones to do business online; and additionally, the viability of SMBs creating apps is far more evident today with the introduction of new technologies like low- and no-code platforms.

The Future of Business Digitization in Your Organization

Business digitization is here to stay and organizations find themselves in a position of prioritizing what they need to be implemented right now in order to meet their digitization goals. Organizations that fail to meet these goals and adopt new technologies risk falling behind and staying behind as innovations that could revolutionize your business pass by, and your competitors take full advantage.

Don’t lose out on business opportunities brought forth by technology! Start planning your company’s digital transformation and prepare yourself for the future of business, but remember: digitizing your business is no easy feat. It takes a lot of skill, planning, expertise, and support to be done on time and on budget. But that doesn’t mean it needs to be a slow process that takes months or years.

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Learn how you can fast-track your business’ digital transformation with our ebook, available for download right now.

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