*Modern factories are using more digital tools to increase efficiency and innovation.*

The Potential of Digital Transformation in Conventional Industries Unleashed

This article explores how traditional industries can use digital tools to improve efficiency, enhance customer experiences, and drive growth.

Traditional industries currently face both challenges and opportunities that they have not encountered before. The rapid advancements in technology poses a big challenge to many industries. From factories to farms, industries are now seeking to understand how technologies such as Artificial intelligence, Blockchain and Big Data can change their operations and improve their competitiveness.

“The challenge before traditional industries is to understand how technology such as artificial intelligence, Blockchain and Big Data can be deployed to enhance their operations and their competitiveness.”

This Ampliro Insights article focuses on the new opportunities available for traditional industries to grow. We will look at the importance of taking a strategic approach to new technology, the need to change business models using as well as measuring results. By applying automation and data analytics businesses and industries can not only remain relevant but thrive.

The New World: Traditional Industries and Digitalization

*Farmers use AI-driven data to monitor crops, showcasing the shift in agriculture.*

Traditional industries are adapting to keep up with changes in customer demands. These changes are driven by factors such as growing competition, market shifts, evolving customer expectations, to name a few.

A recent study reveals that 70% of companies are either going through or planning digital change, highlighting the importance of this shift (Userlane, 2023). The COVID-19 pandemic emphasized the need for digital transformation, as businesses had to quickly adapt to their staff working remotely as well as changing customer demands (Attract Group, 2023).

Market Pressures

Market pressures and new tech are other driving forces pushing traditional industries to adopt digital technologies. The retail industry for example, especially e-commerce, has been significantly impacted by AI and analytics. Companies like Amazon and Alibaba are now transforming shopping into a more personalized experience (Forbes, 2023).

Customer Expectations

Changing customer expectations are also a key factor driving digital change. Today’s customers expect brands to deliver relevant and enjoyable experiences. According to a recent survey, 82% of customers want their questions answered at once when inquiring about products and services. This illustrates the importance of quick responses (Wavetec, 2023). Traditional organizations have no choice but to adopt new technology to meet customer demands.

Competitive Advantage

In order to stay competitive in today’s market it is important to adapt several of these new technologies. It allows traditional industries to streamline tasks, reduce costs, and even create new revenue streams. For instance, manufacturing companies are embracing “Industry 4.0” technologies such as IoT, robotics, and 3D printing in order to develop “smart factories” (Forbes, 2023).

However, digital transformation is not without its challenges. Traditional industries can face “cultural barriers” that resist change. They must also address skills gaps, which can be costly (Wavetec, 2023). Despite these obstacles, it is crucial for traditional industries to push forward with their digital transformation initiatives in order to achieve the benefits previously discussed; like increased efficiency, improved customer satisfaction, and enhanced competitiveness.

The Importance of a Digital Strategy

*It's important to align technology with company goals when creating a strategy.*

Creating a digital strategy that fits traditional industries is essential for successful implementation. A carefully planned strategy acts as a roadmap, making sure that all digital efforts align with the organization’s overall goals and helping them take full advantage of new technologies (Attract Group, 2023).

One of the key elements in creating an effective digital strategy is setting clear goals and objectives. But what exactly does this involve? The goals should be specific, measurable, achievable, relevant, and time-bound (SMART) (Whatfix, 2023). When digital transformation initiatives are guided by well-defined objectives, its easier for the organization to pursue transformation with clarity and focus. It also allows alignment with its broader strategic direction. Typical goals might include improving operational efficiency, enhancing customer experience, and fostering innovation (Attract Group, 2023).

Another essential step is to prioritize initiatives to form a clear digital strategy. In today's world, there are countless digital technologies and opportunities to explore, making it critical to identify and focus on the most impactful and relevant ones for your organization. Factors to consider when prioritizing initiatives include strategic importance, potential ROI, and feasibility (Whatfix, 2023).

“68% of companies plan to increase their investment in digital transformation over the coming years.”

It's also crucial to allocate resources effectively to implement a digital strategy. This means assessing the organization’s strengths and weaknesses, identifying skill gaps, and building the necessary talent, infrastructure, tools, and equipment (Attract Group, 2023). According to a recent survey, 68% of companies plan to increase their investment in digital transformation over the coming years (KarbonHQ, 2023). However, it’s vital to ensure that resources are directed towards the areas that will deliver the most significant impact and support the company's long-term growth.

Understanding the industry, market, and customers is also key to developing a successful digital strategy. Conducting market research and analyzing data can help identify key market trends, which in turn, can inform the development of your digital strategy (Whatfix, 2023). Additionally, it’s important to cultivate a culture that supports digital change within the organization (Attract Group, 2023).

How Digital Tools Can Transform Business Processes

*Assembly lines powered by IoT and AI can improve efficiency and reduce waste.*

It's now clear how new technologies are transforming traditional industries; they’re reducing costs, improving performance, and enabling the development of new products. By using digital technologies, organizations can overhaul their core activities and unlock new opportunities for growth and profitability.

Optimization of the Supply Chain

Supply chain management is an area that has been greatly impacted by digital transformation. Industries can identify bottlenecks, reduce waste, and more by using trends such as blockchain, data analytics, and IoT (Forbes, 2023). As an example, the retail industry uses RFID devices and sensors to monitor inventory and manage restocking, which is improving efficiency, reducing costs, and improving customer satisfaction (Forbes, 2023).

Product Development

Another area where digital tools are changing traditional industries is in product development. Technologies such as 3D printing, virtual reality, and artificial intelligence can assist companies to shorten the time taken in the development of products, cut costs on production and come up with new products in the market. For example, the automotive industry employs virtual reality in the design and development of new car models, thus doing away with the need for actual models and reducing the time taken to develop a new car model (Forbes, 2023).

Customer Service

Customer service is also changing with the use of AI chatbots, virtual assistants, and social media. These tools allow companies to offer 24/7 support, personalized recommendations, and other services, which increase customer satisfaction and loyalty. For example, banks use chatbots to manage basic customer questions, which frees up customer service agents to focus on more complex issues and speeds up response times (Wavetec, 2023).

To successfully enhance business processes using digital tools, industries need to focus on people, processes, and technology. This involves training employees, fostering a positive attitude toward change, and providing the right tools (Attract Group, 2023). Therefore, it is imperative that conventional industries seize digital strategies in order to spur organizational advancement, optimization of performance and enhancement of customer experience.

How to Measure and Improve Digital Transformation?

*Digital dashboards allow management to measure the transformation efforts.*

To determine whether digital transformation efforts are delivering the desired results, it’s important to assess the outcomes. Key performance indicators (KPIs) and metrics should be aligned with profit and loss (P&L) and the organization’s most important operational objectives. Consistently reporting the impact of initiatives is essential for building trust and credibility (PTC, 2023).

Key Performance Indicators

Some KPIs that organizations can use to track the progress of their efforts include:

Percentage of reactive work
Percentage of downtime
Increased availability
Additional revenue
Maintenance costs

By reducing the resources spent on reactive work, organizations can decrease downtime, increase availability, and lower maintenance costs (GE Digital, 2023).

Continuous Improvement

Digital transformation is an ongoing process with no definitive endpoint. For improvement efforts to have a lasting impact, organizations should:

Define the problem or opportunity and prioritize it against other opportunities.
Identify both midterm and long-term objectives.
Outline the actions needed to achieve the goals.
Use contextual and real-time data to identify the root cause of the problem.
Gather and review relevant information to evaluate the impact of changes on performance

If the results are favorable then the new solution may be implemented in the place of the existing one. But it is recommended that improvement should be a perpetual process which means that organizations should always strive to improve their performance even when the results are encouraging (PTC, 2023).

Adapting to Feedback

It’s important to evaluate the impact of changes on performance to determine whether certain adjustments can benefit operations. Without analysis and evaluation, it’s impossible to know if the focus needs to shift entirely.

Digital tools make it easier for organizations to save and share knowledge about solutions, best practices, and ways to solve problems. By talking about ongoing improvement efforts, companies can help spread good practices, encourage teamwork, and recognize key contributors (PTC, 2023).

Conclusion

Every industry today faces the challenge of digital transformation to keep up with the changing market. By developing strategies that include all aspects of business, redesigning processes, and using technology, these industries can boost productivity, enhance customer experience, and explore new growth opportunities. Becoming a digital business is a process that affects people, processes, and technology across the organization.

“It’s important to evaluate digital transformation initiatives to ensure they are sustainable in the long term. ”

It’s important to evaluate digital transformation initiatives to ensure they are sustainable in the long term. By monitoring performance, creating a culture of improvement, and embracing feedback, traditional industries can navigate the risks and opportunities and plan for future growth. As the technology evolves, those who are open to change and ready to innovate will succeed.

At Ampliro, we focus on helping industries that aren’t typically associated with transformation navigate this process. Our consultants specialize in creating end-to-end strategies, transforming operations, and analyzing the effectiveness of the implementation. Ampliro also provides personalized “Insights” reports, tailored to your unique needs, with detailed analytics and recommendations. Get in touch with Ampliro today to learn how we can support your digital transformation journey and help your company grow.

**About the Author**

Ampliro’s CEO, Andreas Olsson, has extensive experience in digital transformation and works with traditional industries to help them adopt new technologies to improve their business.

References

1. Userlane. (2023). Overcoming New Customer Expectations in the Digital Transformation. Available at: https://www.userlane.com/blog/overcome-new-customer-expectations-in-the-digital-transformation/

2. Attract Group. (2023). Digital Transformation Basics for Traditional Businesses. Available at: https://attractgroup.com/blog/digital-transformation-basics-for-traditional-businesses/

3. Forbes. (2023). The Impact of Digital Transformation on Business Models: Opportunities and Challenges. Available at: https://www.forbes.com/sites/bernardmarr/2023/10/12/the-impact-of-digital-transformation-on-business-models-opportunities-and-challenges/

4. Wavetec. (2023). Impact of Digital Transformation on Traditional Business Models. Available at: https://www.wavetec.com/blog/impact-of-digital-transformation-on-traditional-business-models/

5. Whatfix. (2023). Digital Transformation Objectives. Available at: https://whatfix.com/blog/digital-transformation-objectives/

6. KarbonHQ. (2023). 7 Steps for Planning and Executing a Digital Transformation. Available at: https://karbonhq.com/resources/7-steps-for-planning-and-executing-a-digital-transformation/

7. PTC. (2023). Understanding Digital Continuous Improvement. Available at: https://www.ptc.com/en/blogs/iiot/understanding-digital-continuous-improvement

8. GE Digital. (2023). Five Key Performance Indicators Critical to Your Digital Transformation. Available at: https://www.ge.com/digital/blog/five-key-performance-indicators-critical-your-digital-transformation