What is Digital Transformation? Everything you need to know

Digital Transformation Overview Hero
Digital transformation is business transformation - what it is, why it is needed, common pitfalls and industry examples.

Share this post

Share on facebook
Share on linkedin
Share on twitter
Share on email

What is digital transformation and why is it needed?

Digital transformation is the integration of digital technology into all areas of a business to create new or modify existing business processes, cultures, and customer experiences to meet changing business and market requirement. The goal of digital transformation is to change how organisations operate and deliver value to customers. It transcends traditional roles like sales, marketing, and customer service. Instead, digital transformation begins and ends with how you think about, and engage with, customers.  As we transition from paper to spreadsheets then smart applications we have the chance to reimagine how we conduct and manage our businesses, and how we engage our customers, with digital technology on our side.

Small businesses tend to organize their business processes with the view of transforming them later rather than focusing on future-proofing the model right from initiation. In the modern day business world, trying to run your business on scrap pieces of paper and handwritten ledgers will surely put you out of business before long. Putting digital transformation first when planning and building your business sets your business up to for rapid scaling and constant adaption to the ever-changing business climate.

Why businesses usually take on Digital Transformation?

The root of any change in business starts with customers. Customer happiness is how you win in business. Modern customer expectations are being driven by largely digital technology and digital innovations. The always-connected customer is always seeing new possibilities. When they see new things elsewhere, they want them from you, too. And if you can’t offer them, they’ll find someone else who can. The digitally connected world makes it easier than ever for customers to comparison shop and move from one brand to another, often with minimal effort required.


Digital innovation shapes businesses across all industries

Digital transformation impacts every industry. Whether your business generates revenue through client services, digital media, or physical goods, technological innovations can transform your means of production, distribution, and customer service. Depending on your business, your customer could be a consumer or a business-to-business (B2B) client. Let’s extend our perspective to also include your employees.


Machines themselves are getting smarter, too. Artificial intelligence (AI), the Internet of Things (IoT), cloud analytics, and sensors of all sizes and capabilities are transforming manufacturing, production, research — virtually all facets of business across all industries. The examples are never ending. Digital innovations like AI and the IoT are driving all manner of advancements in the production of everything from consumer goods to cars and trucks. Optimized manufacturing processes adapt to changing consumer demand. Cloud-based software affords real-time visibility into supply chain logistics. Customer experience mapping powered by machine learning surfaces key insights to help product planners, marketers, and budget makers alike do their jobs better. Together, these and many more innovations like them are changing the way we do business, from every conceivable angle. 73% of customers prefer to do business with brands that personalize their shopping experience (hbr.org)


Why businesses need to transform in the digital era

Digital transformation is business transformation. It’s a transformation that’s being driven by the basic desire to make work better for everyone, from employees to customers. The drivers we just walked though are some of the biggest reasons behind the massive changes rippling through the business world right now. Add to that the need every business has to compete for and win customers. If your competitors are leveraging digital transformation to streamline production, expand distribution, build a better workplace for employees, and improve the overall customer experience, you’d better up your game, too.

How to get started on a Digital Transformation Strategy

It’s crucial to understand that digital transformation is a complete business transformation and cultural shift. A digital transformation is a complete business transformation. It’s crucial to keep this in mind if you’re seriously considering transforming your business. It’s not just about updating technology platforms and applications. It’s a cultural shift, and a reimagining of all of your company’s processes and ways of doing things.


Start with an internal assessment to identify gaps, problems, and areas where you may experience difficulties. What’s your biggest problem? What’s the key to your survival? For very small and very new businesses, the answers may be short and sweet: We need customers and sales. We need a few key processes and systems we can run with. It’s important to involve everyone at your company. All will be part of your digital transformation over time, and you may have more stakeholders than you think. Even if your company is small and new, and the path to digital transformation seems clear now, remember that you’re building for the future. And future you will be bigger.


Whether that means more employees, more revenue, or both, your business will grow. Flexibility and the ability to stay nimble as your business evolves should be built right into your digital transformation strategy. Connecting with a digital transformation consultant online or in person can be a great  resource as you start thinking about your business digital transformation strategy.


You don’t have to do it alone consider outside help to create your roadmap and strategy

Working with consultants, partners, and tech vendors can be great for SMBs because they have the depth of experience and knowledge to help you figure out the best paths to success. Experienced partners have likely helped other companies in similar situations, and so can help you find the most direct paths to meaningful transformation. Many small business leaders hear the word “consultant” and instinctively flinch while reaching a hand to guard their wallets. Don’t assume that getting help is always too expensive — that’s simply not true.


Remember that the point of hiring or partnering with an external group to craft your digital transformation strategy is to draw upon their expertise. They bring something to the table that you don’t have — experience and industry expertise across many different clients — and can provide value and best practices. Your short-term investment in their time is designed to help your business reap bigger benefits over the long haul.


Tapping the right partner to consult on your transformation strategy lets you come up with a better plan than you could on your own, while also letting you stay focused on your core business. It will also help you avoid some of the rookie mistakes that inevitably happen when you go it alone.

Commmon pitfalls of digital transformation

If you’re leading a digital transformation in your organization, keep this rule of thumb in mind as you consider decisions and investments: Be collaborative. Don’t make decisions in a vacuum. The changes brought by digital transformation will impact everyone’s daily workflow, and are meant to empower employees. Get everyone involved early and solicit ideas. Not only will you get better buy-in, you’ll get a better outcome, too.


Technology integration is key. One of the biggest, easiest-to-make mistakes that businesses make is investing in a bunch of different technologies that don’t integrate. Unfortunately, it’s hard to unwind the resultant snarl of information when your platforms and apps don’t work together. Today’s business ecosystems and platforms make it easy for vendors and developers to build apps tailored to helping businesses grow. Adopting a scalable platform will help ensure that the processes and information in your company can flow as easily as possible. That’s the foundation upon which everything else can be built.


You don’t need to scrap everything and start over when beginning a digital transformation, even if you’re transitioning from a snarl of apps that don’t talk to each other. In fact, the most effective solution is to bridge data silos, and pull all information into a central space — rather than completely starting over. The second part of the process is to unify your data, with the aim of creating a single, unified view of the customer. Once you’ve built bridges between fragmented information, you’ll be able to surface useful insights into customer behaviour and maximize the potential of new technologies like AI. Looking at your business anew with the benefit of new insights and tools is what digital transformations are all about. 

What does digital transformation look like in pratice?

Digital Transformation in Sales

The ability to collect large amounts of precise data on consumer behaviour lets marketing and sales teams, in particular, approach their work in ways never before possible. Looking at consumers as individuals, and studying their behaviour from the first touchpoint all the way through the buying journey, brings to light the natural bond between marketing and sales. Nurture that bond, and magic happens when these historically separate groups work together. Salespeople particularly benefit from access to more and better data. When marketing and sales teams share information across a CRM, and individual sales reps enter sales activity and keep their pipelines up to date on the platform, information flows freely throughout an entire organization.


From there, two big things happen. First, more eyes on the same information means more opportunities to share intelligence across your entire business. Maybe someone from marketing ops sees a sales rep’s note about a prospect in the CRM, and shares marketing campaign activities related to the prospect that helps move the deal along. Second, as information flows and gathers within your company, you set yourself up to leverage cutting-edge digital innovations like artificial intelligence.


Digital Transformation in Marketing

At a high level, the goal of digital transformation in marketing is to find more customers while spending less money. More specifically, awesome digital marketing generates more quality leads and helps you get closer to all of your customers, whether they’re new to your brand or long-time loyalists. The shift from analogue to digital marketing materials helps these efforts in two key ways. First, digital materials are generally cheaper to produce and distribute than analogue media. Email, in particular, is far less expensive than print-and-mail campaigns.


Second, digital marketing opens the door to marketing automation, analytics tracking, and dialogue with customers in ways that analogue never could. Instead of planning a one-size-fits-all trip down the funnel, marketers can build 1-to-1 journeys that observe customer behaviours and shape the experience along the way to best suit each individual buyer. And instead of going on instinct and gut feelings alone, marketers now have data-driven insights at hand to help craft those journeys.


Digital Transformation in Service

Customer service, and our ideas around where service begins and ends, are being upended by the digital era as much as any other part of business. The “on-demand economy” has quickly grown from a few upstart apps that hire errand runners and hail cars for busy urbanites to a global movement to, as Forbes put it, “Uberize the entire economy.” A combination of smartphone ubiquity, electronic payment systems, and apps designed to match demand (consumers) to supply (gig workers) in real time has created a world in which nearly anything you might want is just a swipe and tap away, around the clock.


Talk about digital transformation! With everything from pizza delivery to child care now available at their fingertips, customers are expecting more and more companies and industries to embrace digital as their primary means of doing business. For service departments, that means greater expectations for 24/7 problem-solving on the customer’s channel of choice. But it also means greater opportunities to delight buyers and win more business.


The self-service portal is a great example. These user-facing tools offer features like password reset, self-logging of incidents, service requests, and knowledge base searches. They can also include more interactive services like collaborative spaces, chat services, and embedded social media feeds that are relevant to service issues. User-friendly design, including search fields that offer suggestions, and user profiles that leverage customers’ purchase and service histories, can go a long way toward personalizing self-service for your customers. A good self-service portal can reduce the demands on your service agents. And customers like self-service: 59% of consumers and 71% of business buyers say self-service availability impacts their loyalty.

Industry examples of digital transformation

Digital Transformation in Banking

Banking has been radically transformed by digital technologies in ways that have greatly benefited many consumers. Not so long ago, the majority of transactions were handled in person by bank tellers. Automated teller machines (ATMs) came along and streamlined the basic transaction process, extending business hours and reducing wait times and dependencies on human employees for cash withdrawals and other popular transactions. Over time, ATM technology has evolved to accommodate cash and check deposits, more secure transactions, and support for multiple accounts, including credit cards and mortgages.


More recently, PCs and mobile devices have given way to online and mobile banking, and cashless payment systems. Consumers now conduct more and more bank business via the web, including paying bills and sending funds directly to friends and family. Mobile banking apps let users take snapshots of paper checks to make remote deposits, and a new wave of payment systems, including PayPal and Apple Pay, let consumers pay for everyday purchases with accounts linked directly to their phones, no cash or plastic card required.


Digital Transformation in Retail

Retail has also been radically transformed in the digital era. Digital transformation has both impacted the in-store retail experience and ushered in the age of ecommerce. Digital technologies have improved the retail experience for consumers and proprietors alike, enabling everything from loyalty cards and e-coupons to automated inventory and retail analytics systems. Shoppers who used to clip coupons from newspapers and magazines now just show their phones at checkout to access in-store discounts and deals. When they do this, their purchases are tallied by digital systems that track consumer behaviour trends, tie into inventory and purchasing systems, and trigger individualized customer journey events like email and SMS messaging.


Additional personalization of the in-store experience can be enabled by digital beacons that link to mobile apps to sense when particular shoppers enter the store. From there, anything from a phone alert to a personal concierge can be deployed to enhance the retail experience. Retailers are now even experimenting with subscription-style sales using Internet of Things technology. Amazon, for example, has Dash Buttons: IoT-enabled devices with buttons that trigger automated reordering of an item. Branded Dash Buttons are available for a growing number of household goods and other items regularly in need of replenishment. Just click the button when you’re running low and a refill billed to your Amazon Prime account, naturally will be dispatched right away, just like that.


Digital Transformation in Insurance

The impact of digital transformation in the insurance industry is similar to our other examples in that consumer expectations are driving change. Web- and app-based self-service portals make it easy for consumers to comparison shop, enrol in coverage, use multiple agents and carriers for different types of insurance (home, car, life, and so on), and file claims. In fact, much of this is now possible without the need to actually speak to an agent, which saves time for consumers and money for the insurance companies. What’s notable about digital transformation in insurance is the role the Internet of Things is playing in revamping the industry.


Inexpensive, IoT-enabled sensors are giving insurers access to a wealth of data that’s informing industry forecasting and claim reviews alike. Take auto insurance as an example: In-vehicle sensors monitor actual driving habits, rewarding consumers who routinely drive safely under the speed limit or log fewer-than-average miles. Sensors connected to phones could also be used to deter texting while driving by disabling a driver’s messaging apps while their car is in motion. Connecting vehicles to wearable devices with blood alcohol measurement capabilities could help prevent drunk driving by temporarily disabling the engine, cutting risk for insurance carriers while also making roads safer for everyone.

1 thought on “What is Digital Transformation? Everything you need to know”

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Subscribe To Our Newsletter

Never miss a posting! Subscribe to our mailing list and we will keep you informed.

More To Explore

Digital Transformation

Migration strategies

This infographic outlines the four different strategies available to migrate your apps to Microsoft: rehost, refactor, rearchitect, or rebuild. View: Migration strategies

Scroll to Top