• Digital Transformation & Business Productivity

How Digital Transformation Can Improve Business Productivity

  • Shashank Shekhar
  • 8 min read
How Digital Transformation Can Improve Business Productivity


Remember Disney’s remarkable digital transformation journey in the early 2000s, which propelled the 80-year-old company back into customers’ imagination? Disney revitalized its theme parks and streaming businesses using digital technologies, acquired Marvel in 2009, and delivered a string of blockbusters, raking over US$ 22 billion. This was possible due to its legendary CEO Bob Iger’s interventions, which exemplify how digital technologies can revitalize organizations.


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Almost two decades later, digital transformation has acquired a much bigger canvas with significant financial implications for businesses.

A leading industry report reveals that businesses reap significant dividends from their digital transformation initiatives. Seven out of ten business leaders believe they are 1.5 times more likely to report increased revenues, and 66% expect higher organizational profitability in the next two years.

These findings underscore an unprecedented focus on digital transformation among organizations as they increasingly seek greater agility and resilience in the face of uncertainty.

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Businesses need to be agile to make quick and accurate decisions using vast tracts of data to serve their customers better and faster than their competition. Agile organizations possess the tools and processes to help decision-makers respond quickly to internal and external challenges like the shortage of skilled workforce or the need to upskill the workforce to maintain a competitive advantage.

Resilience because resilient organizations are better prepared to face uncertainties. Organizations that foresee and manage people, processes, and technological changes without disrupting their workflows or impacting their customer servicing levels are better placed than those disrupted by unforeseen challenges and constant firefighting.

Digital transformation is their ticket to getting there sooner!

Digital transformation is often misunderstood as a large-scale initiative that requires a dramatic organizational response. Instead, it’s an experimental, discovery-driven approach where businesses adopt strategies, processes, and structures to make the most of the digital-led business landscape by improving their overall productivity.

But digital transformation is not entirely about becoming a technology-driven organization.

It's equally about customers and servicing their needs better by addressing siloed business functions, processes, and technology platforms and streamlining them to drive higher efficiencies and productivity.

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It's also about understanding the impact of burgeoning technologies like Artificial Intelligence (AI) and machine learning (ML) on operations, business strategies, and competition, and how they can empower and optimize workforces. And about tapping into the expertise and inputs of customers and employees, and leveraging them to adapt to the digital-led model.

Gartner defines digital transformation “as anything from IT modernization (for example, cloud computing), to digital optimization, to the invention of new digital business models. The term is widely used in public-sector organizations to refer to modest initiatives such as putting services online or legacy modernization.”

Top Reasons Why Businesses Need to Start Their Digital Transformation Journey


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  1. Lowering Employee Productivity and Engagement

The ongoing disruption in the global labor markets, with a string of employee-led trends like the Great Resignation, underlines the challenges posed by sustained burnout and the lack of enthusiasm. Remote and hybrid workplaces have led to a proliferation of work applications, complicating communication and collaboration with team members. Plus, administrative tasks, like filing timesheets manually, are eating into their productive work hours and engaging them in monotonous activities.

Such challenges have egged on businesses to automate processes and free up employee time for productive activities like building client relationships and upskilling. Technology interventions are crucial for retaining and attracting new talent, as demonstrated by how organizations are increasingly weaving them as a part of their key employee value proposition.

For instance, leveraging an AI-powered time and attendance management system can save up to 20-30 minutes daily for every employee – which can easily free up hundreds of work hours overtime for activities that excite and engage them. In practical terms, if there are a substantial number of employees in your organization, the aggregated time savings can easily amount to hundreds of work hours over time. In essence, the adoption of a time and attendance management system improves operational effectiveness while also promoting employee engagement and well-being, all of which lead to a more dynamic and productive workplace.

  1. The Need to Make Sense of Data

The sudden surge in the adoption of remote and hybrid workplace models, new employee types like shift workers, and a more global and diversified workforce are creating tremendous amounts of data. Legacy systems and manual processes are not equipped to assess the data accurately and at speed to offer actionable insights.

As a result, decision-makers need to spend considerable time and effort in making sense of the available data to find the directional cues to make business decisions. This manual approach leads to a loss of productive work hours that managers could use to work on business-critical initiatives or to improve their teams’ cohesion and skills.

  1. Increasing Focus on Soft Skills

Communication, collaboration, empathy, time management, and the ability to create consensus are emerging as key skills. Organizations must create the right enablers for their employees to acquire and leverage them. Doing so requires freeing up employees’ time.

Contrary to the popular perception, around 80% of companies prefer to develop talent in-house rather than hiring externally or onboarding temporary workers, reveals Mercer’s Talent Assessment Practices Report. Nearly three-quarters of companies (73%) plan to automate processes and reduce human involvement.

This means organizations are keen on reducing administrative tasks by automating them and focusing on improving the skills profile of their in-house workforces.

  1. Greater Pressure on Profit Margins

Client spending has reduced considerably, putting additional pressure on profit margins. Plus, clients are now more inclined toward fixed-bid projects where changes in project scope, manual errors, and the lack of real-time visibility and oversight can impact bottom lines. As a result, businesses are exploring ways to digitize their backend processes and workflows and gain real-time visibility to better manage their projects. The focus is firmly on optimizing people and processes to drive higher efficiencies and productivity.

These challenges demonstrate why technology adoption and digital transformation have emerged as key organizational priorities for the C-suite. Digital transformation aids business productivity, which is directly linked to higher profitability.

Here’s how:

How Digital Transformation Can Address the Pain-points and Drive Higher Productivity


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One of the key benefits of digital transformation lies in improved customer engagement and management. HubSpot Annual State of Service in 2022 Report reveals that 93% of customer service teams believe clients have much higher expectations from their brands than ever before. This means organizations must offer them personalized and multi-channel services and constantly innovate to grab their dwindling attention span.

Doing so while managing resources, and servicing clients remotely or in a hybrid setup is especially challenging. This is where digital transformation initiatives like onboarding an AI-powered professional services automation tool can significantly improve an organization’s resource management capabilities.

With real-time visibility into the global resource pool, resource recommendations and allocation, and the ability to track each resource's skills, certificates, and expertise levels, organizations can arm their managers with the tools they need to consistently deliver high-quality client experience.

Bob Iger, Disney’s CEO, says, “Disney today is leveraging digital to engage, entertain and interact with consumers every day across its theme parks, studio entertainment, interactive media platforms, and physical store,” weighing in on how digital transformation can drive higher client engagement.

Some other crucial advantages of digital transformation are listed below:

  1. Enhanced Organizational Agility and Scalability

A tumultuous business landscape requires organizations to scale up or down quickly and seamlessly to negate the impact of any adverse development, like the shortage of a high-skilled workforce. Similarly, an organization must have its digital fundamentals in place to benefit from international expansion or the new trend of hiring from a global workforce.

Organizations can have difficulty driving agility and scalability without the required technology platforms and processes. It also affects organizational productivity as employees are often overworked because of siloed or manual systems, and lack the technology support needed to drive the desired agility and scalability.

Digital transformation not only helps a business deal with its current challenges but also helps it create long-term predictive models while offering ways to improve the management of its resources and finances.

  1. Long-term Cost Savings

Deloitte’s Global Cost Reduction Survey reveals that cost reduction has become a global corporate mandate. “Cost reduction has become a standard business practice in every region, with 86 percent of global respondents saying their companies are likely to undertake cost reduction initiatives over the next 24 months,” the report reads. Organizations that increase business output and reduce expenses can better their profit margins.

Digital transformation enables long-term cost savings as organizations don’t have to spend large sums at regular intervals to create stop-gap solutions that can counter the side effects of extraneous factors like a tepid macroeconomic outlook.

Instead, they can set up a digital ecosystem that aligns with their organizations’ requirements and actively manage the costs associated with technology platforms and modernization, while empowering their people, business functions, and processes.

  1. To Create a Future-proof Workplace That Attracts and Retains Talent

Businesses that adopt new technologies like AI and machine learning are able to define their workforce needs better and create a more seamless experience for them. This way, organizations position themselves as attractive employers that are keen on embracing the future. They are able to create a pull among highly sought-after, keenly contested, and highly-skilled workforces.

Such employment opportunities are attractive propositions for employees who wish to work with cutting-edge technologies to expand their skills matrix and expose them to challenging and rewarding work.

Much has already been written about how technology and digital ecosystems have enabled organizations across the board to maintain business continuity during the challenging days of the COVID-19 pandemic. Businesses need to create a future-proof ecosystem that can withstand the shocks of disruptions and allow them to thrive. This way, digital transformation can future-proof business entities.

  1. Reduce Manual Errors

Manual errors cost organizations dearly as there are greater chances of mistakes. For instance, managing wage and labor compliance manually or using disparate systems can be inefficient and prone to errors. Doing this can result in administrative overhead, increased workload, and potential inaccuracies in payroll calculations, leading to employee dissatisfaction and potential legal disputes.

42% of companies experience some form of revenue leakage, and manual errors are major contributors to this preventable loss. Organizations find it difficult to spot and plug in revenue leakage because it seldom occurs in large numbers. However, regular misses like loss of productivity in work hours snowball into large sums that hurt businesses financially.

A manufacturing company discovered that manual wage calculation and compliance tracking resulted in an average payroll error rate of 5% across its international operations. With a workforce of 10,000 employees, this translated to approximately 500 payroll errors per pay period, leading to dissatisfied employees and wasted administrative resources.

  1. Improve Organization-wide Collaboration

The pandemic has changed the way we work. As organizations take to hybrid and remote workplace models, they must examine their culture and drive knowledge-sharing and collaboration. They are important facets that enable seamless operations and stakeholder experience, especially when customers and employees are primarily working online.

Digital transformation can help boost the knowledge-sharing between sales, delivery, HR and finance teams, and drive higher organization-wide engagement and collaboration. Besides, solutions that integrate processes across teams, offer real-time data and insights, lessen the demand-skills gap, and improve employee productivity.

Digital Transformation Matters!

Technology can be daunting! Breathtaking innovations and disruptive business models are challenging traditional wisdom and forcing the C-suite to reassess their organizational strategies and processes.

Unfortunately, it has not been smooth sailing.

Digital transformation is often perceived as a disruptive process. This incorrect assumption has led to resistance from certain quarters in the organizational setup and complicated the task of digital processes percolating in the business functions.

The C-suite must take the lead in dissipating these real or perceived concerns by assuming the role of mentors and change-makers. They must lead by example and communicate clearly that digital transformation is not to replace employees but manual processes. It's meant to empower them with the necessary tools in modern-day workplaces.

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Starting small and demonstrating the benefits employees will accrue could be a good place to start to drive greater technology adoption. Automating simple tasks like time-tracking could give employees a first-hand experience of how digital transformation can lend seamlessness to their daily lives, and free them to engage in more productive tasks. It can help sharpen the organizational focus on attracting & retaining top talent and integrating them better to reduce employee churn.

That’s why businesses must adopt new technologies while articulating how they wish their employees to embrace them. Therein lies the key to better navigating the uncertainties and efficiently managing the ever-evolving demands of their stakeholders.

Ultimately, digital transformation is an ongoing process and not an end goal. It's a process of becoming integrated, agile, and resilient, which, in turn, can optimize workforces to increase business productivity.

And productivity means money!

Shashank Shekhar

Shashank Shekhar

Content Marketing Manager

Shashank Shekhar works as a content marketing manager at Replicon. He has been a digital and content marketing professional for over 9 years. He specializes in writing about technology trends like Artificial Intelligence (AI) and machine learning (ML) and their impact on shaping the project management landscape with tools like professional services automation solutions and time-tracking solutions. Outside of work, he loves reading about history, astrophysics, and geopolitics.

Link: Replicon

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