What is Digital Transformation and Why Should You Care

The Only Constant in Life Is Change.

Heraclitus

Maybe you think this is just a cliche but please do not ignore the power of these words.

If your business has not yet understood the importance of change, and is not yet prepared for the mass digital transformation, it may suffer greatly from what is to come next.

It is often said that digital trasnformation comes in waves and each wave comes much stronger than the former one. 

No matter the size and type of your business, if you are not prepared, you may be drowned in the next wave.

In this article, I will help you understand what digital transformation is so that you can surf on these waves.

What is digital transformation? 

Digital transformation is a process of implementing digital technology to transform a business for the better, either by replacing manual processes or outdated technology. It can help a company revolutionize the way it works, empower its employees to be more efficient and productive, and provide far better service to its customers. 

The definition of digital transformation is often made without referring to it as an ongoing process.

Technology is always at hand and it is up to you to what extent you want to make use of it.

It’s sometimes mistakenly assumed that it’s a one-time, done-and-dusted task that can be checked off the to-do list after it’s been completed. In reality, digital transformation is more like an ongoing strategy that never actually ends, quite similar to innovation.

With technology that is constantly evolving in some fields such as artificial intelligence (AI), cloud computing, and the Internet of things (IoT), you will always have opportunities to improve existing practices and push your business forward.

Why does it matter? 

Digital transformation is often described as the fundamental necessity for businesses to not only survive but also thrive in a modern world. 

In fact, digital transformation becomes increasingly important across all industries and companies seeking to achieve growth. For example, digital transformation is becoming increasingly important to ensure that businesses can provide the best customer experiences that today’s consumers expect.

This can be accomplished by implementing cloud-based contact center technology, allowing users to operate effectively regardless of where they are located and provide seamless, omnichannel customer service to exceed clients’ expectations.

Furthermore, implementing unified communication and collaboration solutions, which enable users to work efficiently and securely anywhere, anytime, and on any device, can enhance employee engagement and efficiency throughout an organization.

Indeed, this has never been more true than during the pandemic, when businesses have had to adjust to widespread remote working and quickly make changes to their working processes to weather the present economic storm.

An absolute necessity 

Although you might be forgiven for thinking that digital transformation could have slipped down the priority list for businesses during the pandemic, when budgets may be tight, you couldn’t be further from the truth. 

In fact, 52% of companies planned to cut or defer investments because of COVID-19, and just 9% made those cuts in digital transformation. 

Moreover, according to IDG’s CIO Pandemic Business Impact Survey, 2020, 59% of respondents stated that the pandemic was speeding up their digital transformation efforts.

Businesses are therefore recognizing the importance of digital transformation to their ability to adapt and succeed. In the modern digital world, digital trasnformation isn’t just considered as a nice-to-have. It’s more like an absolute necessity for many businesses who want any chance at thriving in today’s economy.

‘ContinuousNext’ 

As previously stated, digital transformation is a continuous process and can be viewed as a journey that must be undertaken in order to adapt to an ever-changing business environment. And the past year’s rollercoaster ride has highlighted just how important that is.

Gartner, a global research and advisory organization, has coined the phrase ‘ContinuousNext,’ which emphasizes how, beyond initial digital transformation, businesses must constantly adapt to prosper.

Neither business nor technology is at a standstill, and new ground-breaking advancements on the horizon look ready to change the face of how we work in the not-too-distant future.

For example, AI is having a significant impact on unified communication technologies, which might lead to game-changing innovations like automated minute-taking apps and the ability to have meetings in two languages without needing multilingual participants.

Today, to have an effective digital transformation strategy, it is also crucial that you keep up with all upgrades and improvements available for your current technology. 

This can easily be achieved by employing fully managed cloud services where all updates are automatic so that you always stay on top of the latest features and functionalities as they become available.

Digital transformation begins and ends with the customer.

Digital transformation is the process of employing digital technologies to create new — or improve existing — business processes, culture, and customer experiences to meet changing business and market requirements. 

Digital transformation begins and ends with the customer.

With digital technology on our side, we have the chance to rethink how we do business and how we engage our customers.

For small businesses that are just getting started, there’s no need to set up your business processes and transform them later. You can future-proof your company from the start.  Stickies and handwritten ledgers are not enough to run a 21st-century company.

Thinking, planning, and developing digitally sets you up for success and growth. 

Many businesses are taking a step back as they embark on digital transformation to assess whether they are doing the right thing.

Before looking at the hows and whats of transforming your business, we first need to answer a fundamental question: how did we move from paper and pencil record-keeping to world-changing companies based on digital technologies?

What’s the difference between digitization, digitalization, and digital transformation?

Digitization is the move from analog to digital.

Businesses used to keep their records on paper and business data, whether it was handwritten in ledgers or typed into documents, was analog. Physical documents such as papers and binders, xeroxes, and faxes were all used to gather and share information.

Then computers came, and most businesses began converting all these ink-on-paper records to digital computer files. And that is called digitization: the process of converting information from analog to digital.

When information was digitized, it became much easier to find and share it, but the ways in which businesses used their new digital records mainly replicated the old analog methods.

To make new users feel more at ease, computer operating systems were even designed around icons of file folders.

Business systems and processes were still primarily organized around analog-era principles and ideas about how to access, distribute, and use information, despite the fact that digital data was exponentially more efficient for businesses than analog data.

Digitalization 

Digitalization is the process of using digitized information to make conventional ways of working simpler and more efficient.

It’s important to note the word “established” in that definition: digitalization isn’t about altering the way you do business or inventing new ones. It’s about doing what you already do, but much faster and better now that your data is instantly available rather than being locked away in a dusty archive file cabinet.

Consider customer service in retail, field operations, or call centers. 

By making client records simply and quickly accessible via computer, digitalization transformed service forever. 

When searching paper ledgers was replaced by just a few keystrokes on a computer screen or mobile device, the process of fielding an inquiry, searching through relevant data, and providing a resolution became much more efficient. 

The basic methodology of customer service didn’t change, but the processes did.

Rather than just doing “old” things faster, people started coming up with new ideas for using business technology in new ways as digital technology advanced. 

With the advent of these newer technologies, suddenly, all sorts of things that were never possible before became a reality—and this is when the idea of digital transformation began to take shape.

The digital transformation

Digital transformation is changing the ways businesses operate and, in some cases, creating new lines of business.

With digital transformation, businesses are taking a step back and rethinking everything they do, from internal processes to online and in-person customer interactions. They’re asking big questions like, “Can we transform our processes in a way that enables better decision-making, game-changing efficiencies, or a more personalized customer experience?”

Now that we’ve finally begun the digital age, companies of all sizes started coming up with innovative, successful, and disruptive ways to use technology.

Netflix is a good example. 

It began as a mail-order service and quickly became a major competitor in the video rental industry. 

Then, thanks to technological advancements, the large-scale streaming video became possible. 

Netflix now competes with traditional broadcast and cable television networks, as well as production studios, by providing a growing library of on-demand content at extremely low pricing.

This is how Netflix shined among its competitors thanks to digital transformation.

Thanks to digital transformation, Netflix was able to not only deliver video content to viewers directly but also to obtain unprecedented insight into their viewing habits and tastes. It uses this data to plan everything from designing its user experience to the production of first-run shows and movies at its in-house studios.

That’s digital transformation in action: using available technologies to improve the way a company operates.

Understand what’s possible with digital transformation

Understanding the potential of your technology is a key element of digital transformation.

That doesn’t mean you should ask, “How much faster can we do it the same way?” It means asking yourselves, “What is our technology truly capable of, and how can we adjust our company and processes to maximize our technological investments?”

Before Netflix, people used to rent movies by going to stores and digging through racks of tapes and discs in search of something that looked interesting.

Now, personal devices are given libraries of digital content, along with recommendations and ratings based on user preferences. 

The destruction of the brick-and-mortar video rental business was clear when subscription-based content was streamed directly to people’s TVs, PCs, and mobile devices.

Netflix began to consider what else it could do with the available technologies after embracing streaming. As a result, new ideas emerged, such as an artificial intelligence-powered content recommendation engine. What a great way to make the most out of available technology!

Leverage digital transformation

The benefits of digital transformation are numerous and include increased productivity, increased efficiency, better customer service, higher quality products, and services. 

It also helps reduce costs in the long run as you can automate many tasks that were previously done manually. You’ll be able to get more done with less time spent on repetitive tasks.

Conclusion

Up until this point, I believe I have put enough emphasis on digital transformation and the ways in which you can achieve it.

To be more specific in why I put all the emphasis on digital transformation let me ask you something:

Do you want to stay competitive in today’s business world? 

If so, it is essential that you make the switch from traditional methods to digital ones. 

This will help ensure your company stays relevant and profitable in this fast-paced world where technology changes so quickly.If you don’t keep up with the trends of this ever-changing world, then someone else who does can easily take over… So why not make sure you are ahead of the game?

Frequently Asked Questions


What are the 4 main areas of digital transformation?

The 4 main areas of digital transformation are usually considered to be Business Model, Business Process, Cultural, and Domain.


What is an example of digital transformation?

Delivery apps have taken over the world during the pandemic when people were on curfew. The conventional ways of shopping of any kind were replaced by delivery apps for the most part and thanks to this digital transformation people were able to come up with their needs. 


Why is digital transformation so important?

To simply answer, it makes it much more efficient and easier. From getting work done with less effort to being able to use data in the most efficient way, digital transformation helps businesses and people come up with their needs.

Serhat Erdem

Serhat is the Creative Content Writer of UserGuiding, a code-free product walkthrough software that 2000+ companies trust in their user onboarding.