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What Is Digital Transformation? - A Detailed Overview

  • Akshit Anthony
  • Nov 10, 2021
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Digital transformation is the act of leveraging digital technology to build new or to  adapt current business processes, cultures, and consumer experiences. Digital transformation is the process of rethinking business in the digital age.


It surpasses conventional sales, marketing, and customer service functions. Rather than that, digital transformation begins and finishes with your approach to and engagement with customers. 


As we go from paper to spreadsheets to innovative applications for company management, we have the opportunity to rethink how we do business. And how we engage our customers with the assistance of digital technology.


There is no reason for small organizations just starting to establish business processes and then transform them afterward. From the start, you can future-proof your business. Building a business in the twenty-first century on sticky notes and handwritten ledgers is not sustainable.


 Digital thinking, planning, and developing equips you to be agile, flexible, and ready to grow.


As they embark on their digital transformation journeys, many businesses pause to consider whether they are doing the right things.


The goal of digital transformation is to alter organizations such that they can:


  • Customers benefit from increased efficiency and convenience.

  • Increased scalability in response to changing market conditions.

  • Greater sensitivity to client needs. When executed correctly, digital transformation significantly enhances how businesses serve their customers.


( Related Blog: What is Information Technology? )


Let us learn more about digital transformation. 


Watch this video to understand the meaning of digital transformation.


What is the purpose of using digital transformation?


Since the term was coined in 2012, digital transformation has become a ubiquitous phenomenon in which businesses change how they run, manufacture, and advertise products and services through data, devices, and software.


Digital transformation initiatives can begin as isolated projects to improve services through data analysis to better understand client preferences and experiences.


Rather than that, it fundamentally affects how an organization's end-to-end activities are conducted by adopting new, more current approaches. In many firms, digital transformation is now viewed as an ongoing process that evolves in response to technology in business.


(Related Reading: What is the role of technology in business?)


Once a business decides to embark on the digital transformation journey, the scale and scope of the endeavor open chances for developing new SaaS solutions to support digital operations and workflow. Many organizations cannot do this on their own. They will cooperate with digital transformation specialists to ensure a smooth transition.

This image describes benefits of digital transformation

Benefits of Digital Transformation 

Why is it essential to have Digital Transformation?


Digital transformation creates a once-in-a-generation opportunity for enterprises to assist their clients. Additionally, they assist industries in reimagining how they conduct business, study, shop, and live. There are an infinite number of cycles and approaches available for automated modification. Additionally, the enhancements and efficiency that result are ready to be implemented.


The majority of businesses are not in a position to complete a digital overhaul quickly. They will seek out expertise, niche cooperatives, and products. These items will assist them in modernizing established methods and moving them to a computerized environment. This opportunity motivates plenty of system providers to develop products and services that address this requirement.


When firms become emotionally invested in the promise of a digital transformation, they frequently submit financial assets to these drives. Additionally, a one-time earning opportunity is created for the initial modification. Following then, ongoing revenue prospects for SaaS solutions that support the new computerized work process. SaaS solutions are ones in which software is used to resolve specific issues.


 ( Related Blog: Everything you need to know about Digitization, Digitalization and Digital Transformation


Advantages of digital transformation


Digital transformation can significantly increase a business's productivity and relate its output to changes in customer behavior or evolving market conditions. 


The following are some of the most significant benefits of digital transformation.


  • Digital transformation significantly improves the efficiency of businesses. Each automated manual operation saves firms countless hours of time and resources, allowing them to focus on more mission-critical duties.

  • Additionally, the transition to digital, leverages time for creativity and innovation while lowering operating costs.

  • In data-rich firms, adopting cutting-edge digital technologies can assist in identifying previously unnoticed market prospects.



Digital transformation in the modern era


Understanding the potential of your technology is a critical component of digital transformation. Again, this does not imply the question, "How much faster can we perform the same thing?" It entails answering the following questions: "What is our technology truly capable of, and how can we modify our company and procedures to maximize the value of our technology investments?"


Before Netflix, individuals rented movies by visiting stores. They poured over racks of tapes and discs, searching for something that seemed interesting. Now, personal gadgets are equipped with libraries of digital information, complete with recommendations and ratings based on user interests.


Subscription-based material streaming straight to people's televisions, laptops, and mobile devices constituted a clear threat to the brick-and-mortar video rental sector. Embracing streaming has prompted Netflix to consider other uses for existing technology. It resulted in developments such as an artificial intelligence-powered content recommendation system. Talk about getting the most out of your information technology department!


( Related Reading: Using Data Handling and Digital Marketing to maximise customer experience : A Netflix Case Study)



Digital transformation adds value to every client interaction.


Digital transformation is reshaping the way businesses are conducted and, in some circumstances, spawning new types of organizations. Enterprises are rethinking everything they do due to digital transformation, from internal systems to customer interactions both online and in person. 


Now that we've firmly established ourselves in the digital age, businesses of all types are developing innovative, successful, and disruptive methods to leverage technology. Netflix is an excellent illustration. It began as a mail-order service and eventually impacted the brick-and-mortar video retail industry.


Then, as a result of technological advancements, large-scale streaming video became conceivable. Netflix now competes directly with traditional broadcast and cable television networks and production studios by offering an ever-growing library of on-demand content at ultra competitive prices.


It uses this data to inform everything from the design of its user experience to creating original series and films at its in-house studios. That is an example of digital transformation in action: leveraging available technologies to improve how a firm operates.

This image describes pillars of digital transformation

Pillars of Digital Transformation


What are the elements that contribute to the success of digital transformation?


Significant changes to long-standing processes can be complicated to implement, contributing to the high failure rate of digital transformation projects. Digital transformation is a cross-functional undertaking that requires high visibility and widespread knowledge across – it entails far more than simply installing or building new technologies.


Additionally, a business must understand why it is experiencing a digital transformation. There is little value in change solely for the sake of transformation - what value will the redesigned strategy offer to the organization, both internally and externally?


Even those that succeed in digital transformation encounter moments of pause and rethinking. At the same time, cultural or other internal impediments are addressed. Senior executives may be required to provide sponsorship and undertake internal evangelization to advance digital transformation programs.


Learn more about the future trends of digital transformation. Watch the video to understand further.


Examples of digital transformation


  1. Connecting the healthcare sector through digital products


A big pharmaceutical business recently joined with a leading technology brand to research Parkinson's disease therapies using artificial intelligence algorithms and machine learning.


(Related Reading: Artificial Intelligence (AI) For Marketing Analytics)


The business developed connected sensors and mobile data collection devices to enable data collection for machine learning.


(Must Check: Top 9 Healthcare Technologies)


These gadgets are now transmitting vital disease information in real-time to researchers. It enables them to make scientifically valuable linkages between symptoms and other clinical data in previously impossible ways.


  1. Recognized as a market leader in the retail industry


Fighting Amazon's market share loss, a large shop turned itself from a big-box electronics retailer to a digital technology powerhouse.


(Must Check: How Amazon uses Big Data?)


The company improved delivery times by using cutting-edge supply chain and fulfillment systems, introducing a price-matching program based on real-time market data, and transitioning from snail-mail direct marketing to a digital strategy.


It now leverages data to develop extensive client profiles and to deliver personalized support and cross-selling recommendations.


(Must Check: Big Data in Supply Chain Management: Impacts and Applications)


  1. Online tax payment


Historically, tax filing has been a relatively paper-intensive process, requiring significant manual input time from taxpayers and manual processing time from government agencies. Throughout the majority of Europe in recent years, there has been a dramatic trend toward tax digitization.


For example, in the United Kingdom, a specific digital transformation team has been established. It guarantees that the new paperless experience is straightforward and accessible to individuals of all ages and ethnicities.





Digital transformation is inconvenient and, by definition, undermines the norm. However, it also addresses significant liberties in virtually every industry. Clients require systems that make tasks more accessible, more affordable, and faster—following that, propelling development and squeezing resistance.


The digital transformation is underway, and it is critical to plan for a digital future. Cash reigns supreme for corporate leaders and CFOs now more than ever. Shared services leaders have a critical opportunity to manage up and drive digital transformation in their organizations.


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