How Much Does Digital Transformation Cost in 2023-24?

Gone are the days when businesses used to rely on hard paper copies of records and wet signatures to track data and information. The business world today heavily relies on digital solutions like mailing, faxing, and in-person meetings. As a result, businesses are embracing digital transformation to take advantage of:

• Faster time to market
• Better resource management
• Improved customer experience
• Sustainability backed by digital transformation

Reports suggest that the total digital transformation spending is expected to jump over $2 trillion in 2023. In fact, 80% of businesses’ top priority is digitization right now. Amazon is a great example of successful digital transformation. The global powerhouse has been able to transform its business using digital technologies like ecommerce and mobile apps.

Here’s everything you need to know about digital transformation.

What is Digital Transformation?

Digital transformation is the process of using digital technologies to change the way your business or organization operates. This may include anything from adopting new tools to automating business processes with AI technology. Additionally, digital transformation aids marketing and helps meet changing business and market requirements.

The transformation of going from paper to digital is all about customer engagement. During the process, you revisit every aspect of your customers to create the ultimate digital experience for all. The main steps that a digital transformation company follows are:

1. Planning: The initial step involves assessing the organization’s current state and identifying the key areas where digital transformation can be applied.
2. Implementation: The next step involves implementing the changes required to embrace digital transformation services.
3. Training: This step requires training your employees on the new digital technologies.
4. Support: The last step involves providing support to the employees when they use the new technologies.

Understanding the Cost of Digital Transformation in 2023-24

According to International Data Corporation (IDC), large-sized enterprises spend an average of $27.5 million on their comprehensive digital transformation projects. However, keep in mind that averages can be misleading sometimes since there is so much variation from company to company.

The cost of digital transformation consultant services depends largely on the size of the organization, the scope and complexity of the transformation, and the specific technologies involved. Let’s break down these factors one by one: 

Company Size

Large companies deal with massive amounts of data and serve a large user base. They usually require more apps to support their business processes. Just as their IT operational costs are higher than those of a small company, their digital transformation costs also tend to be greater.

Also, companies with more end-users, employees, and partners require implementing more robust systems and training initiatives. For instance, migrating 500 employees to a new CRM system is going to be much costlier than migrating 100 employees.

Transformation Requirements

From workflow optimization to cloud-based data system migration, digital transformation is changing the business game. It helps organizations adopt the latest technologies like automation and AI to introduce new business processes.

Please understand that every transformation project is unique and has different requirements. This factor can lead to high variance in the cost of your digital transformation projects. So, be sure to determine your project needs with the help of a digital transformation company.

Technology Implementation

The type of digital applications you are planning to use can digitize various operations, such as data security, internal communication, and analytics. These applications can drive cloud CRMs, and ERPs and are powered by AI, ML, NLPs, and LLMs.

Some digital applications can be costlier than others because they’re built on more robust technologies. Also, they may have a higher price tag if your company needs an extensive amount of data storage and processing capacities.

Downtime and Business Continuity

Digital transformation cost is not just a matter of calculating the price of labor or purchasing new digital tools. It also requires exploring the costs you might incur when facing downtime. When you are struggling to serve your customers during the digital transformation, downtime issues can produce a catastrophic impact.

So, it’s important to factor those downtime risks into your decision-making process. Ensure customer satisfaction when evaluating digital transformation software solutions.

Industry Regulations

It’s true that heavily regulated industries like healthcare are subject to an array of regulations. Since different countries have different laws, these regulations expand even further when it comes to dealing with MNCs (multinational companies). Thus, a strategic approach to project management is required for all technology-related regulations.

Adhering strictly to these regulations requires expertise, which will eventually raise the cost of digital transformation. Please note that the cost of failing to adhere to such regulations can be greater.

Partner with a Leading Digital Transformation Company!

The cost of digital transformation may seem significant, but it is definitely valuable. SoftProdigy is a trusted digital transformation agency offering industry-specific custom software development services.We help small and medium businesses take advantage of our cost-efficient digital transformation solutions and modernize their business systems to serve their customers better.

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