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How Businesses are Reducing Operational Costs Through Digital Transformation


In his book, Leading Digital: Turning Technology Into Business Transformation, author and MIT research scientist George Westerman details how when done adequately, an effective digital transformation strategy is like “a caterpillar turning into a butterfly.” However, many companies have yet to fully understand how a digital transformation strategy can transform their business. 

When your technology is strategically aligned with your business goals and operations, the outcomes are alluring – allowing your leaders to see visible gains in both productivity and cost savings. Not to mention, its more intriguing than ever for businesses to adopt a digital transformation strategy as the world continues to grapple with shifts in processes due to the global health crisis. 

While digitization requires a hefty upfront price tag, the long-term gains are well worth the investment. As trusted digital transformation consultants, we’ve worked with customers across various industries and verticals, including engineering, manufacturing, and construction, among others, to help them achieve robust value-creation opportunities that go beyond just cost savings. If you’ve considered a digital transformation strategy but are still overwhelmed by the undertaking, below we’ve outlined several reasons why you should look to incorporate a digital transformation strategy in your business. 

Improve Cross-Department Collaboration

For many project-driven businesses, operations and processes can easily get unorganized. For example, manufacturers are faced with the issue of having sprawling team members, whether they be on site, in the office, or on the shop floor. Each of these teams obtain information and direction from various sources, running the risk of miscommunication and lost data – all of which can lead to costly delays. 

Advanced cloud technologies, such as Oracle’s NetSuite, allow you to achieve greater efficiency by integrating systems and automating manual processes, all while improving cross-department collaboration. Daily operations like order management, supply chain management, fulfillment, and more can all be consolidated into a single system. Automating and consolidating these business processes makes them 40-50% more efficient, leading to a reduction in resources and increase in savings. [1]

Increase Productivity

Digital transformation allows businesses to do more with less – less energy, fewer materials, and fewer labor hours. In an analysis by A World Economic Forum and Accenture, over 16,000 companies across 14 major industries found that digital transformation led to productivity gains and return on investments. Those who were early adopters of digital technology saw their productivity more than double over a 10-year period, whereas industry followers saw declining productivity. But it’s not only early adopters seeing benefits; those who invest in a combination of digital technologies, such as enterprise resource planning (ERP) and project collaboration tools (PCT), reported tripling productivity compared to companies that only invest in a single approach. 

Optimizing Project Completion

When working on a project, the goal is to complete the scope of work on time, in budget, all while maximizing resource allocation. For construction and engineering firms, around 30 percent of costs results from rework. Fortunately, advanced cloud solutions can help businesses better manage costs. In complex projects where numerous subcontractors often work in silos, daily processes can be streamlined by digitizing the entire engineering phase. This enables projects and systems to be integrated and centralized, resulting in, on average, 35 percent in savings on engineering costs, according to a Global Digital Transformation benefits report.[2]

Equipment Longevity

One overlooked benefit of digitization is that it can prolong the life of existing equipment and therefore create investment cost savings. Digitization extends equipment longevity by ensuring assets are optimally maintained throughout their entire life cycle. Businesses that can’t easily locate faulty equipment certainly can’t efficiently fix it. A unified digital platform provides critical, comprehensive visibility across warehouses and manufacturing facilities that helps protect against equipment failures all while delivering real-time notifications of system malfunctions. As a result, systems can operate for longer than before – maximizing the lifespan and value of your equipment. 


For manufacturing, construction, and engineering firms, safety should never be an afterthought. Advanced technologies, AI, and improved data can reduce – or replace – the need for human intervention in dangerous situations. From the factory-floor to hazardous operations, digital technology can educate and protect your employees all while minimizing costly risks. 


Many businesses avoid upgrading their technology systems because they believe there will not be a substantial return on investment, or that the payback will take too long. But don’t be mistaken, when businesses automate processes and effectively manage operations, the average payback period has been shown to be approximately five years.[3] With the right strategy and implementation, digitization can transform every sector of your business operations. To learn more about the costs and benefits of digital transformation or to get started, contact us today for a free consultation.