Deferring Digital Transformation Increases Costs

Leveraging outdated systems and manual processes in the age of automation and AI increases costs to find and retain talent, plus reduces the productivity and competitive advantage relative to peers.

As new classes of employees enter the labor market and evolve with technology, there are fundamental shifts in productivity.

Let’s rewind the clock to look at this shift over the past few decades.

  • The 2000s ushered in widespread adoption of the internet with ever faster speeds and the ability to continue communicating while on the go with mobile devices

  • The 2010s saw an adoption of SaaS suites like Google for Work (Google Apps for those of us that lived it) instead of Microsoft Office and aggregating data from disparate systems for the purpose of analytics

  • The 2020s have seen a rise in automation, adoption of AI, and lower cost integrations to tightly connect apps

A negative compounding effect occurs as organizations defer their digital transformation for longer periods of time.

It’s harder to find employees with experience in legacy applications and technology stacks, and those that are even marginally entrepreneurial will seek to use tools that are closer to the cutting edge. The net effect is increased costs associated with hiring, training, and replacing staff.

The same is true of costs of systems maintenance (an explicit cost) and the costs of reduced productivity relative to competitors (an implicit cost). One impacts the bottom line and the other reduces growth in the top line.

Here are questions to figure out where your organization is:

  1. Is it difficult to collaborate and continue business while not seated at a computer?

  2. Are you primarily collaborating via email with both internal and external stakeholders?

  3. Is it difficult to procure new software and systems for your team or organization as a whole?

  4. Do you experience feelings of reluctance or “FOMO” when discussing how your organization works with your industry peers?

  5. Does your organization have infrastructure and policies to support remote or hybrid work?

  6. Has your organization automated business processes that were time-consuming and/or error-prone?

  7. Do you struggle to access and analyze data from various systems within your organization?

If the answer to most or all of those is “yes”, it’s time to start listing areas to improve and taking action.

TLDR: Deferring digital transformation and adoption of new technologies increases implicit and explicit costs, and ultimately impacts long-term viability.

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