What Is Digital Transformation?

Digital transformation has become a popular term in recent years, but what exactly does it mean?

Some think that digital transformation refers exclusively to technology adoption.

And while software adoption and digital adoption are part of digital transformation, they are just a part. Digital transformation impacts every area of a business, from its revenue model to the customer experience.

At first glance, it may seem that business operations have little to do with software or technology.

However, nothing could be further from the truth.

Digital transformation refers to the implementation of:

  • Digital tools and technology – Deploying new software isn’t enough. It’s also important to employ these tools to their fullest extent … a company that only achieves 50% productivity with its new tool, for instance, hasn’t fully adopted it.
  • Digitally enabled business models – Agile and lean development are business models that arose with the digital age. They are more effective and efficient than older business models, and wouldn’t be possible without digital technology.
  • Digital workflows and workplaces – Online collaboration, remote working, and virtual teams wouldn’t be possible without the internet. They have been proven to decrease stress and improve efficiency … and are further examples of digital transformation.

We can see that digital transformation expands beyond technology adoption to include new modes of thinking and operating.

When researching digital transformation, you may come across other related terms, including:

  • Digitalization or Digitization – Sometimes used interchangeably with digital transformation
  • Digital Adoption – Adoption and implementation of new technology or software
  • Digital Business – A digital business is one that has digitally transformed

Many people acknowledge that “digital” and its offshoot terms have something of a “buzz phrase” quality to them.

This is merely a symptom of the speed of digital disruption – technological development has outpaced our vocabulary.

As mentioned, you may encounter different variations on some of the terms mentioned in here.

However, these differences are usually minor and inconsequential.

The core meaning remains the same – unlocking the benefits of digital technology to transform the way businesses operate, think, and interact.

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