What is Digital Transformation?

Digital Transformation Concept of digitalization of technology business processes. Datacenter background
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Are Your Taking Advantage of What Digital Transformation Offers?

It isn’t easy to read any technology-based article and not see the words digital transformation somewhere. It’s pervasive. Consider the market projects to grow at a CAGR of 23%, reaching $3.3 trillion in 2025. But what is digital transformation, and what’s at its core?

Digital Transformation Defined

Digital transformation is “the adoption of digital technology to transform services or businesses, through replacing non-digital or manual processes or replacing older digital technology with newer digital technology” to borrow from Wikipedia.

As such, it encompasses all digital interactions with your business. That includes your website, social media, data, IT innovation, analytics, and more. Consequently, your business requires optimization across all digital touchpoints.

Companies moving to cloud services presents one aspect of digital transformation as they look to replicate services digitally. But it transcends a singular move. It reimagines how all systems and processes combine to increase business intelligence.

Digital Transformation Drivers

Profitability, customer experience, and increased speed-to-market drive digital transformation, according to Forrester Consulting. Customer experience tops the list among decision-makers as a strategic priority. Growing revenues, improving differentiation, and reducing costs round out the priorities.

It interconnects an organization – business functions, processes, activities, assets, everything. It encompasses your company structure and positioning and permeates every level of your organization, even your supply chain.

Digitalization unifies data and processes, delivers analytics capabilities, integrates IT and business, and defines your solution deliveries.

Elements of a Digital Transformation Program

As presented by Capgemini and MIT Center for Digital Business, a digital transformation program encompasses your customer experience, operational process, and business model. Here’s a closer look at each.

Customer Experience: Digital innovation yields greater customer understanding through analytics-based segmentation. Moreover, it enables growth with digitally-enhanced selling, predictive marketing, and streamlined customer processes. At the same time, customer service improves with greater reliance on customer self-service. Channels blur to create a unified, cross-channel experience.

Operational Process: Through digitization, performance and innovation improve. Likewise, workers become more enabled. That enablement takes the form of knowledge sharing, faster communications, and anytime anywhere access to information and systems. Decisions are data-driven. At the same time, access to more data increases operational transparency.

Business Model: Digital globalization leads to enterprise integration, shared digital services, and reshaped organizational boundaries. In short, boundaries cease to exist. A digitally-focused model augments products and services.

5 Benefits of Digital Transformation

The better the customer experience you deliver, the better you are at differentiating your business from competitors. With tools like artificial intelligence (AI) and machine learning (ML), organizations can support the customer journey at unparalleled levels.

Here are five benefits associated with digitalization:

  1. Better Resource Management: In 2020, the average number of applications used by enterprise businesses was 900. Digital transformation consolidates company resources into one place to deliver a better, more consistent user experience. It helps integrate applications, databases, and software into a central repository.
  2. Data-Driven Customer Insights: Data is capital, especially when it comes to customer insights. The more data you capture, the more insights you gain into customer behavior to drive business growth. Apart from the customer experience, data access improves overall decision-making. It’s easier to monitor, collect, and analyze data to make informed decisions.
  3. Customer Experience: According to Gartner, 81% of companies expect to compete primarily based on customer experience. Digital transformation improves the way companies interact with customers. Customers gain access to information more easily. Plus, operational efficiencies allow organizations to deliver products more quickly.
  4. Greater Profitability: SAP reports that 80% of organizations completing transformation increase profits. In addition, 85% increase market share. These outcomes stem from increased efficiencies like streamlined workflows, improved agility, and greater automation.
  5. Greater Transparency: Digital transformation supports real-time data that delivers insights into trends and patterns that might otherwise go unnoticed. Those insights identify areas for process and workflow improvements to provide greater productivity and efficiency. In short, it removes bottlenecks in your process.

Transforming Your Business

If you feel like you’ve made limited strides regarding your transformation, you’re not alone. Deloitte reports that 87% of businesses think digital will disrupt their industry. But only 44% of companies are prepared for that digital disruption.

Forrester echoes that lack of preparation. It reports that only 15% of companies prioritized digital transformation in 2020. However, those who did were able to address a remote workforce and higher customer interaction volumes owing to COVID more capably.

If you’re one of the 85% of businesses looking to prioritize digital transformation in 2021, here are some tips to get you started:

  • Assess your current state thoroughly.
  • Get buy-in and funds to drive the change.
  • Recognize that digital transformation requires a shift in mindset.
  • Understand that digital innovation connects new product and service introductions with improved customer engagement mechanisms and back-office operations.
  • Digital transformation requires a laser focus on customers.
  • To simplify implementation, consider deploying a proven framework with third-party support.
  • Prioritize your deployment.
  • Recognize it’s a journey requiring ongoing investment and optimization.

In short, digital transformation itself relies on process more so than technology. The more you embrace the process, the more successful your outcome.

Need Some IT Support to Make it Happen?

For a small to mid-sized business, digital transformation can seem daunting. It pays to work with an experienced IT solution provider.

As a local IT company, we deliver various IT services that can support your transformation – cloud services, VoIP service, Microsoft 365 migration, BCDR, and more. Give us a call to get started.

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