When you think of digital transformation, what do you see? An army of workers wheeling out all your old servers and replacing them with a nebulous investment in cloud? A complex, convoluted and costly journey from your current state to some sleekly automated future? Whatever you see, do dollar signs form a big part of the picture?
There is a common misconception that digital transformation is expensive. It can be, if your goals are lofty. But it doesn’t have to be. There are many cost-effective ways you can implement transformative digital projects that make a real difference within your business. Before we look at one example, let’s explore the economics of digital transformation and some typical costs associate with it.
The economics of digital transformation
Any digital transformation agenda is closely knitted to the bottom line. Whether it is to achieve economies of scale by moving to more cost-effective digital environments, or to improve the customer experience and sell more products, or to streamline production to do more with less – the end goal of digital transformation is to either save money or make more money.
To get there, though, requires some careful economic analysis. You need to put your economist’s hat on and ask questions like:
- What is the best approach for our business needs?
- How long will it take?
- What are the relative costs and risks of this approach?
- Are there any blind spots that we need to consider?
- What are the costs and risks of doing nothing?
This last point, on blind spots, is an interesting one. IT decision makers and business leaders can be unwittingly affected by unconscious biases when it comes to making decisions about digital transformation. Sold on the benefits of the technology, they may fail to see what some of the hidden costs may be.
The risks associated with a digital transformation project should also be scrutinised. Every project will carry risk – it’s whether the level of risk you are exposed to in a project outweighs your tolerance to risk. Ask yourself what could go wrong, and how far off target you are prepared to go.
Common costs of digital transformation
While the costs will naturally vary depending on the nature of the project at hand, most digital transformation projects come with a number of common costs. These may include:
- Purchasing the technology – whether you purchase outright, lease or follow a subscription model, these costs are pretty clear.
- Upskilling or hiring new staff – training of current staff in the new technology, or hiring new staff equipped with the necessary skills to manage the new technology, can be a cost that gets overlooked.
- Migration or re-engineering of existing apps – you may need to migrate existing workflows to a new environment or adapt them to suit a new environment. Depending on the effort involved, this can be a significant cost.
By identifying all of your costs upfront, you are in a much better position to make a rational economic decision about the suitability of the project.
Projects don’t have to cost the earth
While all digital transformation projects will carry a range of costs, the good news is that they don’t have to be expensive. There are extremely cost-effective ways you can enact changes which have a really positive impact on the bottom line. Indeed, their net effect is often much greater than expensive, big-bang projects.
For example, the costs involved in implementing DocuSign are minimal. Set-up costs are negligible if you are using DocuSign on an existing CRM or productivity app that is an integration partner. As for staff training, it would take half a day, tops.
The returns, however, can be huge. According to this study, made in partnership with Forrester, Australian organisations get payback in less than six months, with a return on investment of 122%. For every transaction, there’s a saving of $14.21 and a gain in productivity of 1.35 hours. That’s per transaction – if your business deals with a number of agreements each day, just imagine how quickly the savings would add up.
Then there are the unquantified benefits such as an improved customer experience, incremental revenue, and stronger security and compliance. These all add up to deliver an extremely viable economic proposition and prove that digital transformation projects don’t have to cost the earth.
For more info about the implementing DocuSign into your digital transformation strategy, contact our sales team.