What is Digital Transformation & Why is it Important?

What is Digital Transformation

The term “digital transformation” has been used widely, especially in the past decade. But what is it? Is it the latest buzzword or a trend? Or is it the necessary path that all businesses must follow to stay relevant in today’s modern business landscape? This guide will define digital transformation and discuss why digital transformation is essential to your company. We will also talk about the action steps required to enable digital transformation.

What is Digital Transformation?

Digital transformation is integrating technologies throughout businesses to facilitate and drive fundamental change. This includes benefits like enhanced efficiency, higher business agility, and eventually unlocking new value for users, employees, and shareholders.

Several paths lead to digital transformation, and every company’s journey will be unique. For instance, an organization may practice cloud computing or AI to improve its customer experience. Or it may redesign its supply chain to use machine learning effectively. An organization can even make spot-on predictions regarding the product users it will want in a few months, then move production to fulfill demand.

In every condition, though, beginning a digital transformation journey needs a new mindset. It is an opportunity to reimagine how organizations take action, often from the ground level.

Digital Transformation Key Concepts

Digitization and digitalization are the two main concepts related to digital transformation.

Digitization involves converting analog information and data into a digital format, such as scanning a physical photo or document and storing it electronically.

Digitalization: It refers to the application of digital technologies to modify business processes and initiatives. This could include training employees to use new software platforms developed to help product launch faster. While digitalization efforts may be part of digital transformation, the latter extends beyond individual projects and affects the entire organization.

For most companies, digital transformation demands a shift from the legacy approach toward a more experimental, collaborative, and advanced approach. These alternative work approaches unveil innovative solutions that can enhance customer experience, foster employee innovation, and drive company growth at the fundamental level.

Why is Digital Transformation Important?

Before the Covid-19 pandemic, digital transformation immensely focused on user experience and journey. Then, everything changed and expedited. Today, digital transformation is the core of innovation and operational efficiency across the company. We have elaborated on key reasons digital transformation is essential for business growth.

  1. Enhanced Efficiency: Digital transformation allows automation and streamlining of processes and reduces manual task efforts. This enhances operational efficiency, eliminates errors, and increases business operations.
  2. Innovation and Competitive Advantage: Implementing digital technologies drives a culture of innovation within companies. It supports exploring new business models, products, and services, offering organizations a competitive edge in the market.
  3. Agility and Adaptability: The digital environment is constantly emerging, and companies must stay agile to sustain market trends and customer demands. Digital transformation allows companies to adapt quickly, respond to disruptions, and seize new opportunities.
  4. Improved Customer Experience: Digital transformation enables companies to understand and meet customer demands effectively. With data analytics and customized digital interactions, organizations can offer timely support, tailored experiences, and convenient access to products and services.
  5. Data-Driven Decision-Making: Digital transformation produces immense amounts of data that can be influenced for insights and informed decision-making. Data analytics offer valuable business intelligence, allows companies to discover trends and data-driven decisions, and optimize their strategies.

Overall, digital transformation is significant for companies to stay competitive, adapt to changing customer needs, and unlock new opportunities for growth in the digital era.

Digital Transformation Strategy

Driving significant change in a company is very difficult to pull off without any plan. There are five main areas companies must practice often follow.

1. Business strategy transformation

Today, every company has become a technology company; all CEOs are tech CEOs. Digital transformation integrates technology as the key to business strategy. This strategy helps to reduce operational costs and inefficiencies and may even revolutionize the trajectory of your business. Implementing a unified model across business and technology makes it easier to attain future goals. The technological path you decide determines a more critical role than ever in your company’s success.

2. Business operations realignment

Transformation of business processes and adopting new ways of working to foster adaptability and experimentation are crucial to success. It is vital to identify your customers’ and employees’ most pressing needs and explore how digital processes can address them effectively.

Starting with this question can enhance processes on a broader scale, whether it involves enhancing customer service through advanced data analysis, migrating essential services to the cloud, or building sustainability throughout engineering, manufacturing, and supply chain operations.

3. Implementing new practices for agility and experimentation

With the increasing demands of customers, it is significant to introduce new working methods combined with advanced engineering capabilities. Many companies currently need to make more-than-ideal choices regarding their technological investments. It all lies in embracing change and innovation. Successful digital transformation is a fundamentally different approach that perceives technology as easily accessible and people as highly adaptable.

4. A flexible technology important for sustainable change

It’s necessary to avoid indulging in just one technology. By being active and flexible, you can enhance innovation across your organization and quickly form ecosystem partnerships that drive scale and speed. A modular strategy enables faster and more sustainable change, and staying dependent on customer requirements is the focus.

5. People change management

Digital transformation impacts every aspect of a business. Leaders and the organizational culture must support the digital foundation, digital operations, and a digitally skilled workforce to ensure its effectiveness. This requires alignment on adopting new technologies and their seamless integration into daily life. What should be the ideal vision for the future of work? How should roles and responsibilities adapt and evolve? In what ways can technology facilitate improved knowledge sharing and collaboration? How can leaders be trained to enhance communication and empathy and establish trust in a remote work environment?

Although technology introduces new challenges for workers, it also solves many of them. To drive lasting change, companies often need to develop new skills as employees embrace new approaches to work.

How to Enable Digital Transformation in Your Company

Companies have realized that digital transformation is significant. Here are a few action steps to enable digital transformation in your company.

  1. View it as business transformation. Users must always be at the top in any form of transformation. Organizations must start by discovering the key friction points users may face- whether in equipment service, parts, sales, or elsewhere. Organizations across different industries work on large-scale transformations as dramatic market shifts drive reinvention.
  2. Design your strategy and organizational change. A clear objective, an integrated approach, and a focus on value are significant to any transformation. The appropriate workplace and transformation strategy is known as a transformation office, which is significant for all stakeholders.
  3. Break down challenges that hinder change. Emphasizing customer challenges allows the functional silos to break down. It commonly takes several functions to share information to enhance the quality of customer experience.
  4. Cultivate your partner ecosystem. A study by Accenture states that in the high-tech and software segment, 89% of partners are demanding new sources of growth and operational effectiveness.
  5. Practice an agile approach. One of the significant keys to digital transformation is agility. Promoting it begins with designing a business culture in which experimentation is stimulated and innovative ideas can flourish.
  6. Fund it as an investment. Funding digital transformation is an intricate procedure best addressed one step at a time. In the short term, initiate an end-to-end view of digital requirements and opportunities across the customer lifecycle. Select a challenge that fits your desired investment and payoff opportunities from there. By following such things, companies can self-fund innovation, optimize technology investments and remove roadblocks to development.

What are the Core Elements of Digital Transformation?

1. Innovation

Innovating is challenging; companies must be more creative through personalized automation tools and solutions. At the technology forefront, companies need to stay ahead of their customers by implementing new technologies, building new products and solutions, or training individuals on how to use them. By being on the leading edge, you can guide users on their path to technology modernization and digital transformation. Subsequently, customers can harness the reliability and effectiveness of your established platforms and approaches to customize and expand the benefits of your solutions, fostering their innovation.

2. Collaboration

Ensure a connected environment empowers employees, optimizes productivity and processes, and enhances teamwork. Companies should focus on implementing a framework wherein open communication is prioritized, the workforce gets results quickly, and organizations promote a highly collaborative environment. When organizations prioritize a culture that drives innovation, communication, and talent, collaboration is almost always enhanced.

3. Infrastructure Modernization

It enables you to take administrative and operational expenses and repackage those dollars which drive innovation. Out of all the digital transformation processes, it is most commonly the hardest for companies to implement as it asks them to look at operations holistically and know how to break them down.
As organizations modernize their infrastructure, they should realize how and where to innovate. Several users have a substantial investment in on-prem infrastructure, and the question is how do users move it into an innovative unit that they can manage less? The security and capability you get from platform-as-a-service highly decrease the work you must perform using on-prem solutions.

4. Operational Excellence

Everyone uses sales forecasting, operational reporting, and the typical standard metrics while running a business. Being excellent means finding solutions that have ecosystem connectivity to the cloud and capabilities that help organizations do advanced things.

5. Information and Insights

When creating a cutting-edge environment for automated builds and deployments, it is crucial to incorporate all metrics from the project into a centralized knowledge repository. This repository enables seamless interaction and data accessibility among all systems within your business ecosystem, facilitating the automatic sharing of valuable insights with minimal technical effort. By cultivating an environment where all employees are aware of the location and accessibility of crucial data, more individuals can make well-informed, data-driven decisions for the business.

In constructing this repository, we also integrate a cognitive search feature alongside analytics, allowing you to discover information beyond what is typically available in standard reports. By amalgamating search and analytics capabilities, companies can optimize their data utilization.


The impact of technology on business operations and communication has been profound. In today’s highly competitive business landscape, digital transformation is no longer merely a recommended strategy by experts; it has become an indispensable and unavoidable necessity for companies striving to maintain their relevance and competitive edge. Digital transformation offers a wide range of benefits, including expanding into global markets, enhancing agility, improving productivity and profitability, elevating employee morale and retention, and attaining business objectives. However, achieving successful digital transformation goes beyond the integration of digital technologies.


Anjali Goyal

Anjali Goyal is a content writer at TechEela. She helps businesses increase their online presence with optimized and engaging content. Her service includes blog writing, technical writing, and digital marketing.

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