The cost reduction effects that digital tools and digital transformation can have on companies and corporations are well documented, with 87% of businesses believing that digitization can help them obtain a competitive advantage in their market.
However, the positive impact digital transformation can have on rising start-ups is less publicized.
Many people associate startups with technological proficiencies or charming images of hustling entrepreneurs. Many times they assume that early-stage companies are always working at the height of possible cost-efficiency.
However, this is not always the case. There’s actually a whole range of digital approaches that startups often fail to take which can reduce costs and increase a company’s chances of survival and success. Let’s take a look at some of the benefits of digital transformation in the start-up world.
Even though the operations of most startups are usually at a minor scale, these can still be optimized through digital transformation. A report by McKinsey found that due to customers increasing expectations, companies must digitize their processes at a faster rate.
Not only does this help to improve customer satisfaction, but it can lead to cost savings of up to 90%. It will also bring your team notable time savings while freeing up resources for other business goals.
Improving Data Tracking and Analysis
Tracking business expenses and maintaining accurate records is an essential part of running any company. With digital tools such as cloud technology, this has become much easier than ever before.
There are now applications that enable online inventory and order management while integrating with your accounting software. These all-in-one solutions will allow you to track all your costs, shipping, and payroll management while reducing the risk of human error. These programs can automatically identify unnecessary expenses and help you save costs in a variety of different business areas.
In recent years, remote working has become an increasingly popular working arrangement, a trend that has been significantly speeding up due to the COVID-19 pandemic. Not only are more and more companies allowing their employees to work from home, but Gen Z’s and Millenials have a much higher desire for a flexible working structure in comparison to past generations.
However, if some or all of your start-ups’ employees will be regularly working from home, this means that you’ll need to provide them with digital technologies that will let them work efficiently and effectively outside of the office. Implementing professional tools such as Zoom or Office 365 will help your team cut costs by ensuring that productivity is not lost due to communication inefficiencies and other remote working challenges.
Outsourcing Business Functions
Employee salaries are one of the most significant expenses that companies have to bear at their early stages. With the digital labor market at an all-time high, you can reliably outsource key work functions with services such as Upwork or Fiverr.
Using these platforms you’ll be able to hire workers on an ss-needed basis, reducing costs that stem from yearly salaries, allowances, and bonuses.
Investing in Digital Marketing
As a start-up, one of the key methods to beat the larger, more established competition is through effective and/or unique marketing efforts. However, traditional advertising methods such as billboards, TV, and print ads are expensive and it can be difficult to find good advertising deals with all the big bidders out there.
On the other hand, there are a myriad of digital marketing channels available for young companies to take advantage of and make their mark. Not only do these come at a lower cost, but they are much easier to track, optimize, and personalize for target audiences.