What is digital transformation? Digital transformation involves the introduction and deployment of digital technology across all aspects of an organization. This can create a fundamental change in how the organization operates and how it interacts with employees, customers, suppliers and partners. Sometimes this means leaving behind existing and established processes and replacing these with new ones.

Why is digital transformation important?

There are a number of reasons that a business may decide to embark on digital transformation however the most common reason is that there is no choice. It’s about staying relevant and it’s about meeting customer expectations. Increasingly, customers expect to work with organizations that leverage technology to deliver value effortlessly.

Here are some trends that indicate that digital transformation will become imperative for most organizations big and small in the coming years:

a) Nearly half of all revenue by 2025 will be driven by digital means
b) Digital transformation will mean more profit and higher company valuations
c) Digital transformation will mean more responsiveness to customers and lead to higher customer satisfaction levels

To a large extent, customers are already digital and digital transformation is basically about organizations catching up.

Digital Transformation Elements

Despite the variety of types of organizations and their different contexts, there are three common elements that management focus on when implementing digital transformation:

Transforming Operational Processes – this includes process digitization, staff productivity and enablement (e.g. using mobile apps connected to a central software application like the ERP system) and performance management in terms of monitoring of people, systems, processes and organizational results.

Customer experience management – this is using digital technology to better understand the needs and preferences of customers in different geographies and segments and managing customer experience in a consistent way across various touch points such as the web, email, mobile, etc.

New business models – this includes searching for new business opportunities that digital technology offers the organization. Telecom carriers, for example, realized that they are not just voice/data carriers but “digital” firms in the broader sense so this has spawned new businesses like mobile banking, mobile cash payment services and a plethora of other value-add services.

For more information, visit:

MIT Sloan: The Nine Elements of Digital Transformation