New technologies and stakeholder expectations mean businesses are undergoing a transformative process - digital transformation

The clue is in the word transformation. While most businesses have embraced the digital world and many of us just take all the digital services and applications around us for granted, transforming our businesses digitally takes change to the next level. technology company’s and start-up’s needs and can help you navigate various business challenges.

What is digital transformation?

Digital transformation isn’t just about adopting the latest digital services – that’s more a matter of digital enablement, more on that later. Digital transformation leaves no area of your business untouched. It relates to how your business operates at a fundamental level and how it interacts with your customer base. It drives to the route of value generation in your company. Note that we say ‘company’ not ‘business’.  The business you conduct is part of your company’s operations. The other part of your company is responsible for the ‘business’. This boils down to people, processes and culture. Digital transformation fundamentally challenges your company as a whole to continually examine and experiment, seeking out new ways to improve efficiency, customer service and, ultimately,  profitability.

Isn’t digital transformation just another word for Digital Enablement?

You’ll hear the phrase digital enablement used, often hand-in-hand with digital transformation. However, the two are entirely different. Digital transformation is a ‘journey’, a framework, a process that a company goes through or follows as a whole. Digital enablement, on the other hand, is the implementation of specific digital tools or processes essential to the continuing digital transformation journey. Think of it as adding productivity tools or accounting tools such as Xero.

Why are we hearing so much about digital transformation?

For some years, businesses have been under pressure to embrace the ‘digital age’. Many simply saw this as a website, email marketing and social media, along with necessary updates in their computers and office equipment. However, two events have focused business owner / managers attention on digital transformation as a wider concept, more acutely: Making Tax Digital and Covid 19.

digitally transformed desktopMaking Tax Digital: This has been widely known since it was announced in 2015. Businesses knew they were going to have to change – some sooner than later based on their size and effort required. MTD requires businesses to implement software and systems that enable them to file on-line, i.e. paperless. This drove a substantial number of small businesses to investigate and adopt cloud based accounting software such as XERO, FREEAGENT, etc., and to embrace the idea of accessing critical business management information through a desktop or mobile app.

Covid 19: 2020, the year the business world stood still. Many business owners face bankruptcy or acquiring unforeseen and unwanted debt. Add to that the challenges of remote working, but as restrictions lifted many employees simply didn’t want to return to the office. For some employers willing to adapt to change, the challenge lay with improving the remote working infrastructure that bound employees to their day jobs. Easier for some than others. Some professions are relatively easy to migrate to a cloud based office environment. Indeed, many who could do so probably had already done so prior to Covid: think Google Cloud, Google Apps, DropBox, etc. Team working in this environment is great for some businesses. Not for all though. Those in a service industry or manufacturing for instance, faced different issues – most obviously, how to integrate a varied workforce that is field based, home office based with those based in a manufacturing plant or service centre. For these firms, digital transformation became a much more ‘holistic’ exercise.

Is digital transformation relevant to my business?

No matter what your business size or what you do, all businesses need to transform to some extent or another – it’s just the way of the digital world. The acid test is in whether you are succeeding to attract and retain your customer base and employees, which if you’re a business with stakeholders translates to stakeholder value increasing and happy shareholders.

What does digital transformation look like in practice?

There’s no point starting something unless there’s a goal in mind. Therefore, begin with the end in mind. The goal may be to solve a problem or adapt, so as to be able to pursue other opportunities as your markets develop and those within it also embrace transformative activities.

digital transformation in manufacturingFor many companies, digital transformation has been driven by a desire to move to paperless administration. Another motivator is moving essential processes to the cloud. Companies have realised that it is no longer necessary to maintain banks of servers holding sensitive company and business information at risk of hacking and ransomware attacks, when cloud based alternatives exist; alternatives that implement security at a level smaller businesses could never afford.

Another wake up call for smaller firms was Making Tax Digital (MTD), and the need to adopt cloud based accounting software that makes digital submissions of tax paperwork simpler.

Larger firms may require ‘transformation’ teams to be set up, each responsible for different aspects of the film’s business and corporate structure. These teams will audit and review the processes and systems used. Together, their objective is to map out a plan that seeks to fulfil the longer term efficiency and transformational goals the company’s management team have identified. Training may be a significant part of this, as new tools, systems and processes are likely required.

For smaller firms, making use of cloud based IT infrastructure, online billing, online customer support, cloud based accounting, are likely just some of the ways these businesses will transform. It’s been happening for quite some time; as businesses embraced the online-culture through websites and more recently through social media, they grew more accustomed to working in this manner. Now though, given the propensity of digital services that have endpoints which require digital interaction, businesses simply have to adapt. For these firms, digital transformation will require the streamlining of processes to match those of their customers and suppliers.

What are some of the trends in digital transformation?

Having reached the point in your company’s timeline where you believe it has successfully digitally transformed, what next?

digital transformationAlthough the firm’s transformational process may be over, at least as an initial exercise, it doesn’t actually stop. Digital transformation has been happening as a logical process for sometime, emerging from technology and processes becoming outdated and obsolete. This doesn’t change, if anything, with today’s ‘transformed’ companies, it’s likely to happen more often, as technologies continue to improve at an accelerating pace. The good news is though, new technologies are quite good at supporting older versions of themselves until such time as it is practical to ‘upgrade’. The task now is to watch and assess new developments and trends. Some of these, more relevant to smaller businesses include:

  • Environmental and sustainability efforts
  • Cloud based applications and working
  • Remote working as the norm, not the exception
  • Security
  • The growing incorporation of AI in technology and services.

How do I know if it is working?

Traditionally, business owners and management teams have sought to quantify the returns they realise on the investments they have made – ROI. Investment is a fairly clear concept and for most it’s just time and money. But just what is a ‘return’? Again for many, it’s simple – an increase in income that pays for the investment and increases the firm’s ability to generate income over and above that prior to the investment. However, returns can be quantified in many other ways too; not all have a direct monetary value, but they all do affect the bottom line potential in their own way.


  • Improving staff morale and motivation. Making processes easier and less soul destroying, even interesting, can help employees better engage with their workplace and business. Happier employees is a very good thing indeed.
  • More effective endpoints. Anywhere customers or suppliers touch the organisation is a touch point that represents a vulnerability. A bad customer experience, suppliers not being paid on-time or supply chain issues not being communicated in-time, can all be improved through digital transformation, enhancing the credibility and trust of your company.
  • The replacement of legacy systems and processes increases efficiency and reduces cost.
  • More cloud based operations requires less investment in office IT hardware. Less service call outs. Less time lost. If you’re noticing the spend on support and maintenance reducing, then, it’s working.

In short, there are many ways to decide if the digital transformation has had an impact and is contributing to an increased bottom line. How you measure ROI is down to you and is specific to the initiative being undertaken, which may have financial as well as non-financial goals too.

How can Tax Agility assist with your transformation

As a small business accounting firm, our priority lies within ensuring your business is operating a peak performance. We monitor the world of digital transformation so we can keep abreast of developments. However, we are active in the process of digital enablement – where we ensure our clients are aware of and can have access to the latest productivity tools that would benefit the finance function. And that’s where we can help you today!

By working with Tax Agility we will make you aware of new digital services and explain the benefits they can bring to your company. We’ll also help you put them in place and train you.

Call us on 020 8108 0090 or complete our enquiry form and we’ll call you back.