What is digital transformation?


Definition of Digital Transformation

Digital transformation is a term that refers to replacing old business processes with digital technologies to improve, progress, or streamline working methods. It can be defined as follows: digital transformation is the process of restructuring a company to operate in the digital age.

The Purpose of Digital Transformation

Since the term was established in 2012, digital transformation has evolved into a widespread phenomenon. Organizations employ data, devices, and software to update how they run, manufacture, and advertise their products and services to customers and other stakeholders.

Digital transformation initiatives are frequently initiated as one-off projects to improve services, such as analyzing data to understand customer preferences better and improve their experiences. This may be a bank investing in mobile banking or an energy company putting a customer’s account online to allow them to manage their tariff and energy consumption from the comfort of their own homes. However, digital transformation is not about making tiny or incremental enhancements to existing systems. Instead, it fundamentally affects how an organization’s end-to-end processes are carried out. In many firms, digital transformation is regarded as an ongoing process constantly evolving in response to technological advancements.

As soon as a company chooses to embark on a digital transformation journey, the scale and scope of the endeavor open the door to the development of new SaaS solutions to support digital business operations and workflow processes. Many organizations will engage with digital transformation consultants to help them endure a process that is as seamless as possible.

Pros And Cons Of Digital Transformation

●     Customers will benefit from increased efficiency and convenience.

●     Greater flexibility in scaling up or down with shifting market conditions.

●     Become more responsive to client needs

●     When done correctly, digital transformation may significantly impact how businesses serve their customers.

●     Every manual action that is time-consuming and error-prone that is automated saves countless hours of resources, allowing firms to devote more resources to mission-critical activities.

●     The shift to digital allows for more time for invention and innovation while simultaneously lowering operating costs.

However, it is essential to note that it’s not without its difficulties – the failure rate for digital transitions is considerable. With the ability to unlock a company’s production and relate its output to changes in customer behavior or shifting market conditions, it may become more competitive and future-proof.

Adoption of the most up-to-date digital technology in data-rich firms can aid in the identification of market opportunities that would otherwise have gone unnoticed. Organizations in various industries can transform how they create products, deliver services, and provide better customer service to their customers.


On The other hand, Digital transitions demand a significant investment of time, personnel, and financial resources. Consider the case of an organization undergoing digital transformation, which may necessitate converting analog to digital data storage. A significant internal project that will require adopting a revised data protection strategy and the implementation of current digital security measures.

Changes in how a company functions can elicit strong internal opposition; for example, eliminating established processes might result in altered or destroyed employment responsibilities and a devaluation of specific skill sets. Furthermore, clients can be resistant to change as well.

Due to these concerns, some firms are cautious or scared of embracing digital transformation and the technologies that enable it. Because it assumes that consumers have access to technology usually only available in developed, wealthy nations, digital transformation is fraught with difficulty at its most fundamental level. Even though it appears that everyone now has a smartphone, over two-thirds of the world’s population does not. Ensuring that no one is left behind as services are increasingly delivered online is vital to the initiative’s success.

Some company parts may object or fight the request when asked to make new technological expenditures or endure the continuing costs of change. Retraining or upskilling employees transitioning to digital processes can be time-consuming, and some employees may not have the patience or confidence to progress down the learning curve.

Investing in new digital technologies results in increased capital expenditure (CapEx) and operational expense (OpEx) during the initial phases of implementation or deployment. These expenditures can be prohibitively expensive, and some organizations may be unwilling to bear them despite the promise of increased efficiencies and a higher return on their investment.

Examples For Digital Transformation

The recent collaboration between a big pharmaceutical firm and a leading technology brand has resulted in the development of artificial intelligence and machine learning research projects focused on treatments for Parkinson’s disease.

The organization has implemented a system of connected sensors and mobile data capture devices to facilitate data collecting for machine learning applications. With the use of these gadgets, scientists may now convey vital disease information to researchers in real-time to find scientifically valuable linkages between symptoms and other clinical data in a way that was previously not possible.

Regaining market share in the retail industry is a top priority.

After losing market share to Amazon, one major retailer reinvented itself from a big-box electronics store to a digital leader in the technology industry. A price-matching program was launched when the company implemented the most up-to-date supply chain and fulfillment systems. The company also transitioned from a predominantly snail-mail direct marketing approach to a wholly digital one, leveraging real-time market data. Customers’ complete profiles are now created, and they receive tailored support and cross-selling recommendations due to the data collected.

Taking care of your taxes online

Tax preparation has traditionally been a time-consuming, paper-intensive procedure that necessitated much human input from taxpayers and manual processing from government agencies. In recent years, there has been a significant shift away from paper-based taxation and toward electronic tax throughout most of Europe. A specialized digital transformation team in the United Kingdom, for example, has been established to guarantee that the new paperless experience is straightforward and accessible to individuals of all ages and ethnicities.

How To Use Digital Transformation

For both employees and customers, the transition from manual to digital can be a complicated process to navigate. Employees may have difficulty adjusting their workflow, and customers may have trouble adapting to the new way the company “does business.”

A reasonable timeline should be set for any digital transformation to be implemented, with any necessary training and assistance offered both internally and to clients/customers.

When it comes to digital transformation, what are the critical success factors? Significant changes to long-standing processes can be complicated to implement, and as a result, the failure rate of digital transformation initiatives is exceptionally high, as previously stated.

Digital transformation is a company-wide initiative requiring excellent visibility and widespread awareness from the beginning to the end. It entails much more than simply installing or building new technologies.

Also important is for an organization to understand why it is experiencing a digital transformation. There is little value in change simply for its own sake – what will the redesigned strategy bring to the table in terms of value, both internally and outside the organization?

To ensure the transformation is strategic, it is common to take place in tandem with change management initiatives. However, even those organizations that are successful in digital transformation frequently endure times of slowness and re-think while overcoming cultural or other internal impediments.

Senior executives may be required to take on sponsorship responsibilities and engage in internal evangelism to move digital transformation initiatives ahead. The development of digital transformation through time

However, although the term “digital transformation” first appeared in the public lexicon in 2012/2013, the concepts that underpin digital products, services, and media have been part of the corporate lexicon since the internet became widely available in the late 1990s.

Customer communication with businesses changed dramatically between 2000 and 2015 due to the proliferation of smartphones and social media platforms. Customers’ expectations regarding response times and availability and how brands and products fit into their daily lives increased dramatically. When a customer was formerly content to manage their account over the phone, web- or app-based account management has become the new standard of practice.

In addition, digital gadgets enable firms to communicate with clients individually, often in real-time. In today’s world, digital transformation is mainly focused on mobile devices, mobile applications, and the colossal use of personal data.


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