What Is Digital Transformation?


What Is Digital Transformation?

Digital transformation is a term that is often used but not always well understood. So, what exactly is digital transformation? In this blog post, we will attempt to define digital transformation and explore its origins. We will also discuss why businesses need digital transformation and the benefits it can bring. Finally, we will touch on some of the challenges associated with digital transformation and how to overcome them.

Defining Digital Transformation

Digital transformation is a vague term that can be interpreted in many ways. The definition may change based on who you ask. That's why it can be difficult to define digital transformation. Here is a simplified definition of digital transformation that you can use in everyday life : 

Digital transformation is the process of transforming an organisation from a traditional model, which relies on physical assets and human resources, into a model that uses information and communication or digital technologies for business operations.

This definition may not be something that most people may agree with, but it gives you a basic understanding of digital transformation and how it works. 

Digital transformations can take many different forms, but some common examples include the following:

  • A retail company that replaces its ageing inventory system with an e-commerce platform

  • A healthcare organisation that moves from paper medical records to electronic health records

  • A manufacturing plant that implements advanced automation technologies

The Origins of Digital Transformation

Businesses began using computer-aided design and manufacturing in the early 1960s, paving the way for the digital revolution. Enterprise resource planning (ERP) was later introduced in the 1990s followed by customer relationship management which was popularised in 1997 because of Siebel Gartner and IBM. 

So, digital transformation has been happening gradually for many years, but it has recently gained significant momentum. There are several reasons for this:

  • The rise of technology. We now have more access to technology than ever before, which means that we can move towards a digital world much faster than we would have otherwise.

  • The rise of the internet of things (IoT). We now have devices embedded in almost everything – from our cars to homes – which means we can track and manage these devices remotely. This infrastructure makes it possible to rapidly adopt new technologies and make them widespread across an organisation.

  • The rise of artificial intelligence (AI). AI has become incredibly powerful over the past few years and is poised to play a major role in future digital transformations. Specifically, AI can be used to automate tasks and processes, improve decision-making, and create new products and services.

Why Businesses Need Digital Transformation

Small to mid-size businesses need to adopt digital transformation to remain competitive. Corporations can use digital transformation to improve efficiency and customer engagement. Additionally, it can help organisations keep up with the pace of change in the digital world. Digital transformation can result in cost savings, increased productivity, and a better user experience.

There are a number of reasons why businesses should take the plunge into digital transformation. For starters, it can lead to increased efficiency. By digitising processes and integrating modern technologies, businesses can significantly reduce the time it takes to do tasks. Additionally, by improving customer engagement, companies can gain an edge over their competition.

Digital transformation also has tangible benefits for business owners. For example, with improved productivity comes cost savings. Digital transformation can help organisations reduce costs associated with legacy systems. In addition, digitisation can improve employee productivity by automating processes and reducing errors. This leads to increased output, reducing operating costs further down the line.

For some businesses, digital transformation could be a matter of survival. Letting go of old ways of doing business can be difficult, especially if they’ve worked well for decades. However, your competitors will leave you behind if you don’t embrace new technologies. It’s important to remember that digital transformation isn’t just about replacing existing systems; it’s about creating entirely new ones.

Digital Transformation Strategy

Every business decision is backed by a good strategy. Digital transformation initiative is no different. For instance, if you want to increase sales, you'll need to develop a marketing plan. Likewise, if you want to improve customer service, you'll need to implement a CRM system. The same goes for digital transformation. You'll need to develop a strategy first so that you know what steps to take next. Note that the strategy we outline below is not an exhaustive one. Every business will have a different strategy based on where it is in the digital transformation stage. What we aim to provide is just a rough guideline. 

A digital transformation strategy may include three main components:

1) A vision statement

2) An implementation roadmap

3) Key metrics

Let's talk about each one of these in more detail.

Vision Statement

Your vision statement describes where you'd like to end up after implementing your digital transformation strategy. It includes goals such as increasing revenue or cutting costs. Your vision statement should describe how you intend to get there.

For example, let's say that you want to digitise a certain internal department. To achieve this goal, you'll need to make sure that all departments are aligned. That means that everyone will need to understand the importance of digital transformation. They’ll also need to agree on what they expect from the process.

Digital Transformation Implementation

The implementation roadmap details exactly what needs to happen between now and when you achieve your vision statement. It includes milestones along the way. These milestones represent key events that must occur before you reach your goal. They could include things like hiring additional staff, launching a new product or releasing a major update to your website.

Key Metrics

The final component of your digital transformation strategy is key metrics. These are measurements that show whether or not your strategy is working. Some examples of key metrics include:

  • Customer satisfaction

  • Employee retention rate

  • Number of customers who make purchases online

  • Revenue per employee

  • Overall costs

To measure the success of your digital transformation efforts, you'll need to track these metrics throughout the course of your digital transformation project. Once you've achieved your vision statement, you'll have a better idea of whether your strategy was successful or not. 

The Benefits of Digital Transformation

The benefits of digital transformation are numerous and far-reaching. For example, digital transformations can reduce costs by automating processes or creating new efficiencies through data analytics or machine learning algorithms. They also often lead to increased transparency and accountability within an organisation and improved customer experience via better automation or engagement strategies with AI systems.

Some more benefits of adopting a digital transformation strategy include:

A boost to small businesses and corporates

Digital transformation can help companies of all sizes keep up with the competition. By automating processes and making use of more modern technologies, businesses can scale up quickly and compete on a level playing field.

Helping companies keep up with changing customer demands.

With so much change happening in our world today, it’s difficult for any company to stay ahead of the curve without embracing digital transformation strategies. Automation allows companies to better serve their customers through faster response times and improved efficiency.

Customers benefit from a more efficient service.

One of the most important aspects of digital transformation is improving customer experience by streamlining operations and removing unnecessary steps. This means that customers receive services that are both easier to understand and faster to deliver. Additionally, by leveraging data analytics, companies can better understand their customers’ needs and preferences – and this leads to increased loyalty and repeat business from the customer!

Facilitating changes and improvements within the company itself

By moving away from traditional business processes, companies can make significant advances in innovation or product development cycle timeframes, leading to greater success for employees and shareholders alike!

How Covid 19 Impacted Digital Transformation

The Covid-19 pandemic accelerated the rate at which businesses jumped on the digital transformation bandwagon. And that's a good thing  because, had it not been for the pandemic, it would have taken a long time for many businesses to come around to implementing digital transformation. 

Furthermore, it's not like businesses had a choice. Digital transformation became a matter of survival in the face of an unprecedented business challenge precipitated by the pandemic. 

Some ways that businesses hopped on the digital train  were evidenced by:

  • A wider implementation of chatbots and other AI-enabled customer service digital tools

  • An adoption of business automation tools run on cloud computing

  • An elimination of redundant processes, operating models and systems

The Elements of a Digital Transformation Framework

Even though the path to digital transformation will be different for every company, there are some key elements that should be considered when embarking on this journey. These include:

  • Customer experience

  • Leadership and culture

  • Innovation

  • Technology integration

  • Data management

  • Business outcomes

  • Financial Considerations

  • Governance and compliance

It's worth noting there may be more that could be added to this list. However, the above-mentioned are some of the common elements that come up across case studies and transformation experiences. 

The Challenges of Digital Transformation

Small to mid-size businesses may not have the resources for digital transformation. This can be due to a lack of funding or simply because these businesses are not as large as some of the larger corporations. Corporates may be resistant to change, which can lead to delays in implementing new technologies. There may also be a lack of understanding about what digital transformation is, which can make it difficult for companies to take the first steps towards moving forward with it. As a result, they may find themselves at a disadvantage when competing against more innovative organisations.

Despite these challenges, there are many benefits to pursuing digital transformation. Companies can improve their productivity and efficiency by moving to a more modern technology platform. They can also gain an advantage over their competitors by being able to better understand and react to changes in the market. 

Although it may be difficult at first, implementing digital transformation is worth the effort. By taking the necessary steps and working together as a team, businesses can achieve the success they never thought possible.

Measuring the Success of Digital Transformation

When embarking on a digital transformation project, it is important to have a clear vision of success. Without this definition, it can be challenging to know where to start. Often, the help of an external expert is necessary in order to properly measure the success of a digital transformation project. Furthermore, it is important to remember that not every business will succeed in undergoing a digital transformation. 

By developing realistic goals and objectives, setting measurable criteria for success, and keeping track of progress throughout the project, you will be able to ensure that your company makes the most out of its technological advances while still meeting customer needs.

Case Studies: Successful Digitization Transformations

In today's digital age, it is essential for businesses to be able to successfully digitise their operations. This can be a challenging process, but it has proven to be successful for many small to mid-size businesses. Learning from case studies about successful digitisation transformations can help you to successfully make the transition into the digital age.

1. Here is a great case study by Deloitte in the financial domain. This transformation story is powered by cloud-based ERP and EPM technology.

2. Here is another set of 31 successful digital transformation stories in 2022 that you may want to read. 

3. And here is another resourceful set of studies by Gartner.

Digital Transformation: Key Statistics

By 2017, one study found that less than 40% of industries had become digitized (although usage was high in the media, retail and technology industries).


As of 2020, 37% of European companies and 27% of American companies had yet to embrace digital technology.


 In a 2021 survey, 55% of European companies stated the COVID-19 pandemic has increased the demand for digitalisation, and 46% of companies reported that they have grown more digital.


87% of senior business leaders say digitalisation is a priority, "only 40% of organizations have brought digital initiatives to scale."


A study in the high-tech and software segment found that 89% of partners are looking for new sources of growth and operational effectiveness.


70% of all Digital Transformation initiatives do not reach their goals.


Of the $1.3 trillion spent on DT last year, it was estimated that $900 billion went to waste.


To Wrap Up - Digital Transformation is not about Technology

Digital transformation is not just about technology; it's about culture change. When companies embrace digitalisation, they can transform their business models, processes, and customer experiences.

To succeed in digital transformation, leaders must create a culture of experimentation. Employees must feel comfortable trying new solutions and taking risks. Leaders must foster creativity and collaboration among employees and encourage them to share knowledge and learn from each other.

Leaders must also develop a mindset of continuous improvement. Digital transformation is a journey, not a destination. Organisations must remain open to learning and adapting to innovative new technologies and market conditions.

Ultimately, digital transformation is about creating a positive experience for consumers and businesses. Consumers expect seamless interactions with brands and retailers, while businesses demand a competitive edge over their rivals.

By embracing digital transformation, companies can achieve these goals and become true disruptors.


What drives digital transformation?

A combination of technology and innovation is what drives digital transformation. However, as mentioned above, it's about more than just these two elements.An organization-wide culture and attitudinal change are required to fully benefit from digital transformation.

How do I know if my company needs digital transformation?

It's difficult to tell whether or not your company needs digital transformation. It depends on many factors, such as industry, size, and location. If you think your company could benefit from digital transformation, then it's important to start planning now.

Is there anything I should be aware of when implementing digital transformation?

Yes! You need to consider several things before starting any digital transformation project. First, you'll want to ensure that your organisation has the right people in place. You will need a team of experts with the skills needed to implement the changes. Second, you'll want to plan ahead. Start thinking about which areas of your business will require the most attention. Third, you'll want to set realistic expectations.  Finally, don't forget to measure success. Make sure you track progress throughout the entire process.

Can we implement digital transformation without changing our organisational structure?

Yes, but it might be a complicated process. Digital transformation may overhaul the existing systems and processes, and that inevitably affects the organisational structure. 

How long does it take to implement digital transformation?

This varies depending on the type of transformation you're undertaking. Some transformations are quick and easy to implement, while others are much more complex. Regardless of the complexity, it takes time to build up momentum. This means that you won't see immediate results. Instead, you'll need to work hard for months or even years to reap the rewards.

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