by Spencer Nguyen • June 3, 2022
Digital transformation has the potential to streamline your business processes, lower operational costs, improve customer satisfaction, and contribute to revenue growth. Once you build a digital transformation blueprint and follow the steps, you will have a business positioned for long-term success. Although digital transformation projects can help you save a lot of money in the future, you still have to pay for digital technology that leads to cost savings. Could the cost of digital transformation prevent you from tapping into tools like artificial intelligence, machine learning, and automation?
Before you answer that question, learn more about the cost of digital transformation and what you could get from your investment.
DreamFactory’s low-code approach to API creation could help fulfill the steps in your digital transformation strategy without spending a lot of money on new technology. You can always start a free trial to see how DreamFactory works for you.
A blog post can’t possibly tell you how much successful digital transformation will cost for your business. Far too many variables will affect your organization’s cost of digital transformation. New startups tend to adapt quickly without spending much money. Older companies that still rely on legacy systems, however, usually spend a lot more on digital transformation initiatives.
Some factors that will likely influence your cost of digital transformation include:
It’s a very unlikely scenario, but imagine a business that still uses typewriters to produce documents. That business would need to spend a tremendous amount of money during digital transformation. Now, imagine the more likely scenario of a business that relies on legacy systems and needs to add automation and transparency to processes. It will need to spend money on digital transformation, but it won’t spend nearly as much as the first company.
The International Data Corporation (IDC) businesses around the world will spend about $2.8 trillion on digital transformation in 2025. That’s more than twice what they spent in 2020.
Keep in mind that you don’t have to replace your legacy systems immediately. DreamFactory can create APIs that connect legacy systems and new applications. Business leaders still need plans for breaking down silos, replacing monolithic software, and streamlining workflows. You don’t need to do it all today, though. Feel free to stagger the costs and optimize technology at your own speed.
This year, you might focus on choosing a CRM that integrates with social media platforms like LinkedIn, Facebook, and Instagram. Doing so could help you improve customer relationships and spend less money hiring customer service reps.
Next year, you might concentrate on how the Internet of Things IoT can streamline everything from supply chains to sales fulfillment. At some point, you will need to find a cloud service provider that helps you monitor customer touchpoints, access data from outside of the office, and view data in real-time.
The cost of digital transformation seems much less daunting when you break your process into several steps. As you add more digital products to your business processes, you should see other costs fall and user experiences improve. Depending on your strategy, you might find that you have more money than expected during the final year of your current digital transformation initiative.
The upfront cost of digital transformation should lead to lower expenses in the future. In some cases, digital transformation even pays for itself by lowering costs and increasing profits. Once you acquire more digital tools, you can expect benefits by:
When done well, your digital transformation should lower overall costs by at least 40%. How much more money you make depends on how well you use the technology
Digital transformation should lead to cost savings and increased profits. Not all of the benefits are financial, though. The cost of digital transformation also pays for things like:
The cost of digital transformation doesn’t have to slow your other projects. DreamFactory makes it much easier for you to add new assets to your IT ecosystem without putting cybersecurity at risk. With DreamFactory, you get a simple, low-code solution that helps you connect apps, combine databases, and control access to your data.
You can experience all of DreamFactory’s features by starting a free trial, or start calculating the cost of your APIs now!
Building a Digital Transformation Blueprint
Join the DreamFactory newsletter list.