What Is Digital Transformation? [Definition Explained]

What is digital transformation?

Search online and you’ll be bombarded with thousands of digital transformation definitions. Some will talk about how it is the integrations of the latest tech solutions within the business process. Some, on the other hand, talk about how it is almost a spiritual business change. In the end, you’ll close that tab with one question in mind.

“What is digital transformation for MY business?”

Let’s look at the definition.

1. What Is Digital Transformation: Popularity, Definition & The Benefits

Digital transformation, also known as DX or digitalization happens to be the most popular search query right now. According to Statista, the direct digital transformation technology investment amount is going to reach a total of $6.8 trillion between 2020-2023.

All entrepreneurs are gearing up to turn their businesses into the next digital sensation. But before joining that crowd, you have to understand what it means.

The Duality Of Definition

There is no single definition for digital transformation, despite its popularity. And it is mainly because everyone has a different definition of the term ‘digital’.

Some will tell you that it is all about the integration of technical solutions. For others, it is the automation of the business process. And some groups believe it is a 360-degree change that impacts the business from the inside out.

But which one of them is true?

Well, all of them are. Digital business transformation strategy is not a single faceted matter. In fact, it is a dynamic journey that includes both kinds of definitions. So let’s look at the different meanings of this process.

a. The Narrow Perspective

The narrow perspective of digital transformation is focused on only innovative technology solutions.

The narrow definitions talk only about technology. Be it AI, AR/VR, blockchain, or IoT, it is always about how these solutions will help your business. However, it is not always inclusive of specific business needs.

b. The Broader Perspective

The broader perspective of digital transformation definition focuses on the process and people involved. It is a complete transformation of the older business structure. This transformation impacts the employees and alters the way they can provide valuable experience to the consumers.

c. What Is Digital Transformation: The Combined Perspective

You cannot define digital transformation focusing on only one of the perspectives. They are both parts of a complete transformation effort. And that’s why the combined definition looks something like this-

“Digital transformation is the integration of necessary technical solutions within the business process. It alters the existing work model & organization culture, streamlining the communication & collaboration efforts of the employees. Overall, it helps to reach business goals and deliver better value to the consumer at the same time.”

  1. It includes the matter of business/enterprise technology solutions. (Not FOMO based technical integrations)
  2. Includes the matter of the existing work model & cultural change. (To be digital, the employees must think digital)
  3. And lastly, it includes the employees and consumers as well.

And that is the perfect definition of DX. Now let’s talk about how our experts at Kiri Lab Media make a digital transformation process work.

2. The Process Of Transformation

From the definition above, we know that there are three aspects of the digital transformation maturity model. These are-

  1. The technology
  2. The business culture
  3. The people

The process of transformation will also depend on these three aspects. So what does the process look like?-

Step 1: Beginning With A Purpose

Beginning with a clear purpose is the first step of complete transformation.

As Jay Ferro of Quikrete explained, “Digital transformation should begin with a problem statement, a clear opportunity, or an aspirational goal”. This way you can create a necessity within the employees. This sense of urgency drives up the speed of the transformation process.

Beginning with a purpose will help you to clearly explain to the employees what the aim is. Knowing the endgame, the people involved in the process will be more excited about the whole journey. And this enthusiasm will make them more willing to fit into the new digital style.

Starting the process only with business technology solutions in mind will be a waste of resources. So ensure that the process starts with a clear purpose, a definitive “WHY?”

Step 2: Determining The Scale

Not every organization is on the same level when it comes to its digital operations.

Maybe the competitor is light years ahead of you when it comes to the modern business landscape. On the other hand, maybe they are just beginning with their attempts at transforming the business. Either way, the second step will be to determine its transformational stage you’re on.

On this second step, many professional services leverage the 5 stage model of digital transformation by Tony Saldanha.

Source: inthebooks.800ceoread.com

The model displays 5 stages of the digital work-process in a company. When you determine which stage your organization belongs to from the beginning, it will result in better planning. For example, an organization that belongs to the foundational stage will need more than a plan. It will need a robust training curriculum and in-depth insight into consumer’s favorite digital trends.

Based on the stage, you will have to craft effective plans for business operations management. So, in this second step, analyze your business process and define the scale of effort that is required.

Step 3: Choosing The Right Tech Enablers

This is the step that focuses on the technical aspect of the process. Choosing the right tech enablers depends on two things. The first being your purpose. And the second being the stage of transformation your company belongs to.

When thinking about what is digital transformation, many only think of the tech-approach. The tech-first approach is the reason for failure for many organizations. And that’s why whatever enterprise technology solutions you focus on during this stage should depend on these elements-

  1. The main purpose of the entire transformation effort.
  2. The stage of transformation you are aiming for.
  3. The technical trends that are popular within your industry and among the competitors.

These touchpoints will ensure that the innovative technology solutions provide real value to your business process.

Step 4: Focusing On The Cultural Change

Just having some business technology solutions is not going to be enough. You need to update the company culture to match the latest work process.

Streamlining the business process requires a level of cultural change within the company. This change includes an understanding of employee values, opinions, and expertise on the integrated solutions.

A lack of alignment can cause the entire process to fail in the technical integration stage. Employees who don’t understand the reason for this change will be reluctant to make any efforts.

Carey Oven, a partner with Deloitte Risk and Financial Advisory at Deloitte & Touche LLP puts it perfectly. According to her- the leaders must win the hearts of employees with tech initiatives. Otherwise, the effort will stall before it has any positive impact.

The people involved must be onboard with the digital transformation technology investments. Or, your efforts will fail before they can take a concrete shape.

Step 5: Optimizing The Complete Consumer Experience

Transformation efforts should also aim for a better customer experience. There’s no point in increasing functional efficiency if it fails to elevate the quality of the CX.

The positive impact of digital transformation on customer experience helps to scale the business. For this, you must break down the institutional data silos first. With the use of combined insight, you’ll get a better idea of what people are experiencing. Based on the consumer input, you will have a better chance of enhancing the CX through proper digital solutions. 

3. Are There Any Benefits Of Digital Transformation?

All the trials & tribulations do lead to some amazing benefits of digital transformation. Here’s a comprehensive list of all those perks for you.

a. Increasing The Accuracy Levels Of Insight Generation

Data collection and analysis is one of the fastest ways to grow your business. With digitization, it becomes easier for multiple departments to gather, sort, and store data. Enhanced data operation makes analytics & insight generation more accurate. With digitization, you can also break down the institutional data silos within the departments.

b. Breaking Down Of Departmental Barriers

The quality of teamwork improves with the use of the right kind of digital transformation maturity framework. It breaks down the data silos and helps different teams to partner up and work towards a collective goal. Additionally, it also speeds up the employee’s upskilling efforts and enhances communication between different teams.

c. Boosting The Sustainable Growth Of Your Business

Enhanced data analysis makes consumer insight creation easier. With digital transformation solutions for marketing & sales departments, you can use these insights and elevate the consumer experience.

Constantly keeping up with the changes in consumer attitude makes it easy to alter the digital strategy. The combination of digital transformation & customer experience improvement efforts is one of the major drivers of business growth. And that’s why proper integration of solutions can increase the quality of the CX.

d. Beginning Of A Lean-Agile Business Process

Proper transformation leads to better and more productive results. An agile process improves the output of the business method. This kind of process gives employees the freedom to experiment, innovate and enhance the overall consumer experience easily.

Is Your Business Ready For The Ultimate Switch To Digital?

The confusion relating to digital transformation’s nature causes plenty of businesses to fail at achieving what they need. The perfect combination of human thought and technology is what drives a company to be truly digital. So if you are wondering what is digital transformation, & exactly how to combine human intelligence and innovative technology solutions, let us know. Our in-house experts will answer all the questions you have.

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