Digital transformation is defined as a change in processes and products driven by the evolution of new digital technology. It's a concern because businesses that don't adjust quickly enough to new technologies that affect business and society can find themselves or their products obsolete.
The transition to digital started gradually with the digitization of analog records in the 1970s, with recent acceleration and renewed focus stemming from innovations like artificial intelligence and cloud computing.
For a business to be successful at digital transformation, it must consider transitioning or developing many interrelated factors, like business mobility, cloud infrastructure, data security, customer service and engagement, and the business's ability to change and adapt continually.
As an ongoing process, digital transformation is notably applied to four main business areas in the effort to improve efficiencies, reduce human errors, and generate new and exponential value.
Today's digital transformations require more than supplying internet connection, email, and digitizing paper records in the office. The trend has grown beyond that. Technologies such as cloud services, mobile devices, and the power of the Internet of Things (IoT) continue to alter the digital landscape in innovative ways. But the aim remains to leverage the latest technology to improve user experience and effectiveness.
Technology enables digital transformation in the four business areas, while the pillars support digital transformation by providing guiding foundations. The aim supported by leadership's vision is to use the latest technology to improve user experience, empower employees, and discover insight in the sea of business data that all companies produce, whether they track it or not.
A digital transformation strategy is a company's plan of action mapping out exactly how the business will take action to reposition itself to meet the shifts in the evolving digital economy.
Formulating a digital transformation strategy requires company-wide input and departmental buy-in. It is essential to know that each digital transformation must understand their current and intended business outcomes for each department. For instance, marketing departments may want to know more about their customer activity online; this may call for web analytics. Warehousing departments may struggle with inventory tracking, a challenge that could be met with sophisticated RFID tracking. Compiling the needs of each department, of the customers, and of expected future demands is a beginning step in any digital transformation strategy.
Generally, adhering to a broad three-step strategy can direct companies along the right path.