Jan 10, 2023
7 min read
The definition of digital transformation? (the TL;DR version)
Digital transformation is the systematic process of transforming a business to take advantage of digital technologies to reach its business goals. Digital transformation isn't just about adding new technologies; it's about changing how companies connect with customers, how enterprises operate, and even how they think.
While it may sound like a lot of research and then work to implement these transformation efforts, in reality, it’s quite simple: transform or die.
The difference between Digitization, Digitalization and Digital Transformation
We get it. You keep hearing these terms being thrown around, and you're wondering what the difference is between digitization, digitalization, and digital transformation.
Here's the lowdown on all three:
Digitization is simply converting analogue data into digital form. It's a one-way street – you can't go back to the original after you've digitised it.
Digitalisation is when we take a bunch of digital information and turn it into a single file format (like a PDF or Excel spreadsheet). This could be something as simple as putting pictures into a single digital file or organising your whole life into one giant spreadsheet.
Digital transformation is when we take all that information and use it to change our business processes or create new products or services that change how people interact with us – and, ultimately, how they feel about us.
Why is digital transformation important?
Digital transformation is important because it allows you to stay competitive in the marketplace. It's not enough to just be able to make your product or service, make it and deliver it quickly, efficiently, and with a high-quality experience. You also need to develop a transformation strategy.
If you're not thinking about how your business can be more efficient, more cost-effective, and more flexible than your competitors' businesses – or if you don't know how to achieve those things – your business and, in turn, your business's digital transformation process will fall behind.
Digital transformation isn't just about creating a single digital transformation project and putting some new tools in place – it's about changing how you work. It's about changing how you do everything, from designing products and services to how your leadership teams are training employees on new technologies so they can use them effectively.
What are the advantages of digital transformation?
The benefits of digital transformation are clear.
Digital transformation is the ability to use technology in a way that creates new value for your company, customers, and employees. It's about leveraging technology to change the way things are done – the way work gets done and how customers interact with your brand.
Digital transformation helps you:
- Maximise efficiency and productivity by streamlining processes
- Enhance communication between employees and customers
- Increase security by protecting data and systems
- Improve internal collaboration among employees, departments and teams
- Improve organisational agility (the ability to respond quickly to changing conditions)
- Improve innovation (the ability to create new ideas)
How to digitally transform your business
Digital transformation is the act of changing the way your company interacts with customers and employees, as well as how it does business. It’s also about changing how your company thinks about its business and how it uses technology – and all of these things are intertwined.
Digital transformation can be pretty intimidating, especially when you consider that there are so many different ways to approach it. Let's look at where (and how) to begin.
Adapt your business to leverage digital transformation
Digital transformation is a radical change in the way businesses operate. It's about removing the barriers between customers and companies and allowing customers to interact with brands in ways that weren't possible before.
Companies that want to survive and succeed must transform their business models. This requires adapting your business and rethinking the way you operate in key areas.
Key areas of enterprise digital transformation
Businesses face increasing pressure to deliver more value with less time and money while also meeting customer expectations for speed, personalization and convenience.
Culture: How employees work together and think about their company’s strategy will determine whether they can succeed in this new era of business. With employees at the centre of the organisation, companies must focus on developing new skill sets and capabilities in order to unlock potential while mitigating risk.
Processes: Today’s organisations must define how they’ll operate at scale across multiple channels and geographies while maintaining high levels of customer service and satisfaction. Processes should be automated or made more efficient so businesses can focus on strategic initiatives rather than just keeping the lights on.
This enables organisations to focus on what they do best – making complex decisions and strategic decisions – rather than spend time doing repetitive tasks like data entry or data management.
Technology: To support digital transformation initiatives, businesses need technology that provides an integrated foundation for their entire organisation, including back-end systems that are flexible enough to scale with changing needs but secure enough to protect critical data throughout its life cycle.
The ability to analyse data, predict customer behaviour, and optimise customer journeys has become essential for organisations that want to stay competitive. Analytics is also helping organisations make better decisions about their business models, which leads to more innovative products and services for customers. AI has been used for years in specific verticals (such as automotive or financial services), but it’s now becoming part of everyday life thanks to platforms such as Amazon Alexa and Google Home.
Customer experience (CX): Digital technology has enabled the creation of an ecosystem where companies must interact with their customers in order to succeed. This means that customer service is no longer a department within the company – it’s fundamental to how organisations operate.
The digital transformation process
Digital transformation is the process of moving an organisation from traditional business practices to a more digital-centric approach. In short, it's the act of making sure your company has the tools and technologies it needs to succeed in today's world.
How does digital transformation happen? Typically, it's a 6-stage process:
Stage 1. Business as Usual
In this stage, organisations are still dependent on their traditional ways of doing business. They may have some digital tools and processes in place, but they aren't truly leveraging digital technology to its full potential. This stage is characterised by an overreliance on legacy systems and outdated workflows.
Stage 2. Present and Active
In this stage, organisations are using digital technologies to improve their existing processes and operations, but they're not really transforming how they do business. They're still heavily reliant on legacy systems and outdated workflows that can't be easily updated or improved upon due to their age or complexity.
Stage 3. Formalised
In this stage, organisations have begun implementing formalised processes for managing their digital transformation initiatives. This typically involves multiple teams across different departments within the organisation working together towards a common goal, such as streamlining customer interactions or improving employee satisfaction levels through more effective collaboration.
Stage 4. Strategic
Strategic digital transformation is the process of developing a broad vision for your company's future and identifying how digitalization can help you achieve that vision. It involves identifying your business goals and objectives, as well as determining what kind of impact digitalization will have on them.
Stage 5. Converted
Once you've determined which parts of your business need to be transformed, you can start building out a plan for converting those areas into digital platforms. This is also referred to as "digitising" or "modernising" an existing system or process.
Stage 6. Innovative and adaptive
This is when things really start happening! You'll see an increase in productivity, efficiency, and performance across all departments, as well as new opportunities for growth and expansion into new markets (or even whole new industries).
No matter which path you choose, the goal is the same: you need to understand how to make your company more competitive in today’s digital world. And the best way to achieve it is to get help from digital consultants who know the process like the back of their hand (you can read more on digital consulting in our article "What is digital consulting?").
Impact of the COVID-19 pandemic on digital transformation
COVID-19 has affected digital transformation in four main ways.
First, it's forced companies to think about security as a top priority. The virus has forced companies to rethink how they store data, who can access it, and who can use it. It has also caused companies to assess their current security measures and look for ways to improve them.
Second, COVID-19 has caused a shift toward cloud computing for many businesses. Digital transformation is about shifting from on-premises systems to cloud-based systems – and COVID-19 has accelerated that process for many companies. Businesses have realised that they need to make the shift sooner rather than later, so they can get back up and running quickly when the pandemic is over.
Thirdly, COVID-19 has helped make artificial intelligence more accessible to small businesses by allowing them to use AI tools at low cost or no cost through services like Google Cloud AutoML Vision and Amazon SageMaker's Deep Learning AMI (Amazon Machine Image). These tools allow small businesses to create their own custom models without having to hire a data scientist or machine learning expert.
Finally, COVID-19 has made employees more aware of what makes a business secure – and how important it is for them.
Digital transformation trends in 2022
Companies are increasingly recognizing that digital technologies can be used to improve their existing business processes, while other companies are taking a much more aggressive approach and re-imagining their entire business models around these technologies.
With technology being a key enabler of business transformation, it is critical for organisations to have a clear understanding of the impact that digital transformation can have on their businesses. As a result, digital transformation will take on a different tone in 2022 than it did in 2020 or even 2021. As technology advances, so does our understanding of human behaviour and the way we interact with technology.
Digital transformation trends will continue to evolve over time, but these five trends are already emerging:
- CX will become even more important than it already is.
- Businesses will need to adapt their supply chain management processes.
- There will be an increased focus on collaboration between different stakeholders within organisations (e.g., developers).
- IoT solutions will become mainstream.
- Artificial intelligence applications will continue to gain traction.
Flying Bisons x KFC/Amrest – Thriving digital transformation since 2018
We partnered with KFC to provide digital support in several European countries in 2018. During this time, we've consistently developed the brand's online presence – from developing its website and desktop kiosks all around Europe.
Our team is responsible for all digital channels of the KFC brand in Poland, the Czech Republic, Slovakia, Hungary and Croatia. We have designed all of these countries' digital platforms.
This challenge was enormous and serves as an insightful and innovative example of digital transformation. We had to redesign web channels, take over design from other agencies (kiosk and app), and correct compounded errors prior to handover for several months.
In several years of cooperation, we went through several cycles of design evolution and branding changes for KFC.
The process we employed to increase web conversion was successful. Our efforts significantly boosted the number of shoppers making purchases from KFC's website (increased revenue is a key measure of ROI from digital transformation). As a result, Amrest, which manages multiple fast-food franchises in various countries, has entrusted us with handling other brands in its portfolio, such as Burger King.
We prepared a Burger King kiosk design based on our success with the first project, and we were thrilled by their positive response to it.
Ready to step forward in your digital transformation journey?
If you're looking for a partner who can help you go from idea to market, Flying Bisons are at your service.
We're here to help you from the moment you have the idea for your product to the moment it's ready to launch. We'll help you figure out how to get from concept, strategy, and design to development and optimisation.
We cover the full digital transformation process. Get in touch, no matter which stage of the product life cycle you're in.
What is meant by digital transformation?
The systematic process of transforming a business to take advantage of digital technologies to reach its business goals. Digital transformation is about adding new technologies as much as it is about changing how companies connect with customers and how enterprises operate.
A great start for your business's digital transformation is creating and developing a corporate website, which you can read more about in the article "Corporate website – let them notice your business".
What are the 4 main areas of digital transformation?
Culture, Processes, Technology, Customer Experience (CX).