What is digital transformation and why is it important?

Statista estimates that worldwide digital transformation spending will exceed 3.4 trillion dollars by 2026. We take a look into why it is important to consider for your business.
Written by
Lee Conlin
Published on
December 11, 2023
What is digital transformation and why is it important?

Introduction

In an era where technology rapidly reshapes the business landscape, digital transformation has become a buzzword echoing across boardrooms. Statista estimates that worldwide digital transformation spending will exceed 3.4 trillion dollars by 2026.

But what does it truly mean, and more importantly, why is it important for your business's future success? This article explores digital transformation and illustrates its critical role in enhancing your business's revenue and performance.

What is digital transformation?

Digital transformation involves the utilisation of digital technology across all aspects of a business. This process entails altering the way you operate and deliver value to customers.  

It's not only about technology. It's also a about a change in culture. Organisations must constantly question, try new things, and be comfortable making mistakes.

One way they can do this is through their approach and whether they use an inside-out or outside-in approach we go into detail on in another article.

Key Components

This transformative journey encompasses several key components:

  • Data Analytics
    Leveraging vast amounts of data and advanced analytics to drive decision-making.
  • Cloud Computing
    Migrating to the cloud for flexibility and scalability.
  • Organisational Culture Shift
    Cultivating a digital-first mindset among employees and leadership.

Digital transformation in action

Goldman Sachs...

Created Marcus, an online bank with loans and savings accounts, breaking from its usual investment banking approach.

This move reflects their adaptation to the digital age, targeting a broader consumer base with tech-driven financial products.

The Institution of Structural Engineers...

Utilised digital technology to automate and digitise the process of marking exams.

This resulted in a 300% increase in efficiency, enabled an additional student cohort to be added each year, and saved tens of thousands in postage costs.

Amazon...

Harnessed data analytics to understand customer preferences, integrated AI for personalised recommendations, and leveraged cloud computing through Amazon Web Services (AWS).

Netflix...

Netflix’s transition from a DVD rental service to a streaming giant exemplifies a digital culture shift. The company revolutionised the entertainment industry through three key strategies.

Where to start? Implementing digital transformation

For in-depth detail read our article "How to Begin Digital Transformation."

Here are two quick tips to get you started.

  1. Strategic Planning: Begin by setting clear, measurable goals. Understand your digital maturity and create a roadmap for your digital journey.
  2. Change Management: Embrace change at every level of your organisation. Invest in training and support systems to help your team adapt to new technologies and workflows.

Conclusion

Digital transformation is not just a trend; it's a vital investment in your company's future.

Embracing this change is key to staying competitive and profitable in a rapidly evolving digital world.

To assess your current digital product, app, or website, you can use our free tool. It takes less than 10 minutes to get your actionable checklist report within a few minutes.

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