Impact of Digital Transformation on Startups

digital transformation

Impact of Digital Transformation on Startups

In recent years the use of technology to enhance business performance has gained a wide discussion across all form of business venture not excluding startup companies, terming it – Digital Transformation.

At the organizational level, it has been argued that firms must find ways to innovate with these technologies by devising “strategies that embrace the implications of digital transformation and drive better operational performance” (Hess et al. 2016:123)

From a common parlance, Digital Transformation is the use of technology such as digital marketing tools, mobile & web applications, artificial intelligence, data analytics tools to enhance business performance particularly startup companies in core business metrics areas such as customer experience, streamlining operations or creating new business models, resource optimization, fact based decision making and also in response to the COVID 19 pandemic.

What are the key impacts on startups with the use of technology?

Startups that wish to consider a lifelong integration with the digital transformation progression need to note these four areas. These areas are the main point of focus to get the best value from a digital transformation strategy for organizations

Process and Operation Transformation

Process and operations transformation involves the identification and transformation of business element processes and operation in order to achieve specific targets. Startups are the ideal business type because they can radically change their processes and operation with little or no negative effect on the business. However, these radical digital transformations enhance the modernization of process excellence while integrating new technologies at a lower cost.

To integrate these transformation strategies, there are similar steps that startups can deploy to make the drastic changes reflect on the business. Some of the steps include

i: Specify the target for the transformation: Identifying the result that your startup aims to achieve is the first goal when implementing any digital transformation strategy. Understanding what your startup is trying to accomplish with the integration of these innovations is important. The reason why these innovations need is relevant for your business is also another cause to understand

ii: Metric for measurement: collecting data to visualize the business process and operation transformation will achieve the target is also important. this metric collection should include data like time, cost of transformation, mode of integration among others

iii: Stakeholders: the stakeholders in the digital transformation journey are important to provide feedback and know their roles in the transformation journey. It is important that all shareholders in the transformation process work well to deploy and integrate these new technologies

Business Models

Startups oftentimes bring new models useful for carrying out business in today’s world. Re-inventing the business models is one of the various ways through which new startups penetrate the market. By reinventing the model for businesses, startups can achieve and lead the digital transformation journey that becomes necessary for the business.

Strategically, startups stand to benefit the most from a radical business model shift with new technology. Startups are small entities that can change their business model with little or no negative effects. Since startups are just growing up and scaling vertically, they can integrate these new technologies and models. This positions them to lead the growth and enjoy all the opportunities for growth.

Organization transformation

Digital transformation does not only affect the technologies and products, it directly aligns with organization efforts and values. Although there might be slow adoption of digital transformation solutions, a comprehensive effort from the organization will encourage and advance the digital transformation journey.

The formulation of clear goals and targets for transformation is a clear communication strategy throughout the organization. These clear and smart goals need to be clear throughout the organization to foster a seamless integration of new technology and business strategies.

Domain Opportunity

The redefinition of new technology shapes products and services while blurring out industry boundaries that may exist. Domain transformation typically occurs when the solution from a business becomes applicable to other industries. This has enormous potential to revolutionize the inner workings of industries and create new opportunities for startups.

The obvious example of the perfect domain opportunity that is currently in play is cloud technologies. These computing powers from several servers were originally meant for companies that compute millions of data per second. Leasing out these computing powers to other companies that need to spin up computing engines in minutes became a completely new industry on its own. There are several other ways domain opportunity can redefine how a business provides services to its customers.

  2. Hess, T., Matt, C., Benlian, A., and Wiesboeck, F. 2016. “Options for formulating a digital transformation strategy,” MIS Quarterly Executive (15:2), pp. 123-139.


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    Israel Reply

    It’s hard to come by educated people about this topic, however, you seem like you know what you’re talking about! Thanks

    August 4, 2022 at 7:19 pm

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