Once a vanguard business strategy, digital transformation has become a perennial objective for business survival.
Most CEOs (72%) continue to prioritize digital investments, according to the 2022 CEO Outlook report from KPMG, in part due to concerns about emerging and disruptive technology, a top three risk to organizational growth. Executives know that if their businesses don’t continually evolve through digital transformation they risk being overtaken by competitors or shut down by startups that are more efficient, more effective, and more engaged with their customers.
Digital transformation is the integration of digital technologies into all aspects of business operations. That means identifying how to use technologies to deliver new products and services, to improve existing products and services, and to streamline processes.
Moreover, digital transformation means doing all that work on a continuous basis.
Digital transformation has become a catchall term for describing the implementation of digital technologies to re-engineer existing processes or develop new services that better engage customers, support employees, improve business operations, and drive business value to the organization’s bottom line.
Digital transformation became a key strategic initiative in the mid-2010s, as mobile communications, cloud, data analytics, and other advanced information technologies took off, enabling businesses and consumers to easily engage via digital channels.
Digital transformation has remained a top objective ever since, having accelerated in 2020, as work, commerce, and everyday activities shifted online in response to COVID-19 lockdowns. And it continues at a rapid clip post-pandemic as artificial intelligence and immersive web technologies bring promises of new opportunities and disruptions.
“Digital transformation is the ability to adopt and apply technologies properly to continuously evolve and reinvent the enterprise for growth or competitive strategy,” says Tim Smith, a principle at professional services firm Deloitte.
Additionally, digital transformation marks a rethinking of how organizations use technology, people, and processes in pursuit of new business models and new revenue streams – growth opportunities that themselves are driven by changes in customer expectations for products and services.
“The end goal of digital transformation is to be more intelligent and improve total experience,” adds Sheryl Kingston, research director at 451 Research, a part of SP Global Market Intelligence.
Ideally led by the CEO in partnership with CIOs, CHROs, and other senior leaders, digital transformation requires cross-departmental collaboration to pair business-focused philosophies with rapid application development models.
The arrival of the commercial internet in the late 20th century followed by high-speed bandwidth and mobile technologies in the first decade of the 21st century drove earlier waves of digitalization, as people started to shift from in-person, analog interactions to online transactions.
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