What exactly is digital transformation?

Digital transformation refers to using technology to replace manual processes with digital processes in order to deliver greater value to the customers

New Update

Digital transformation is the buzzword in the business community today. Much has been said about the need for digital transformation and how the coronavirus pandemic has forced many businesses to transition to a digital environment. But what exactly is digital transformation and how does it help businesses?


Begin the transformation journey by identifying the objective

Digital transformation is a loaded term and can have entirely different connotations for different people. To some, it may mean going paperless by replicating offline processes to the online world, for others it may mean using the cloud, while for still others it may mean using the latest technologies such as artificial intelligence and machine learning.

True digital transformation refers to the transformation of business services using technology in order to replace manual processes with digital processes and legacy technology with advanced technological solutions in order to deliver greater value to the customers. It is a much wider term and encompasses rethinking operating models in a way that enables responding swiftly to changing customer expectations.


Usually digital transformation begins by identifying the purpose of this entire exercise. Since every business is different, the objective would be different, too. For instance, the objectives of a financial institution will be different from that of a retail organization or a healthcare company. Experts suggest that organizations must set bold goals, as that will help them realize the biggest return on their investments. Further, organizations must choose adaptive design to allow them the flexibility to revisit and tweak the strategy, when needed.

Adapt and respond quickly

Digital transformation enables organizations to adapt and respond to market disruptions, competition, and ensure business continuity. For instance, organizations that could quickly adapt to the disruption caused by the ongoing coronavirus pandemic and transitioned to an online work environment could ensure business continuity with minimum downtime.


In fact, the coronavirus pandemic has increased the pace of digital transformation across organizations and there is an increased spending on digital transformation. However, the pace of this transformation for organizations around the world is different, as they are at different stages of digital transformation. According to the 'Worldwide Digital Transformation Spending Guide' by International Data Corporation (IDC), the spending on digital transformation technologies and services would reach $1.3 trillion in 2020, registering a growth of 10.4%.


Digital transformation provides organizations with the ability to respond to unprecedented changes and challenges with agility. However, it is not an independent technology journey, as it is closely tied with the way business is performed. Therefore, organizations must align their digital transformation initiatives with the business outcomes as well as processes and people for all-round success.


The article has been written by Neetu Katyal, Content and Marketing Consultant

She can be reached on LinkedIn.