What Is Digital Transformation?

Whether or not you’ve heard of the term digital transformation, you can guarantee those around you have been talking about it since the 1990s when the dot com bubble was at full speed. Roughly 30 years later, worldwide spending on digital transformation initiatives amounts to over two trillion dollars as of 2019. 

Nowadays, the world is changing faster than you can imagine. With the rise of technologies like the internet of things (IoT, machine learning, artificial intelligence (AI), the cloud, blockchain, augmented reality (AR), and virtual reality (VR), computers and digital technologies have become a core component of business.

The need to innovate and transform is a necessary part of being competitive in the market. This is where digital transformation comes in. If you’re unsure what that is, you’re right where you need to be. Keep reading!

What Is Digital Transformation?

To put it simply, digital transformation is a process of implementing and using new and fast-changing digital technology to solve problems and improve business practices. 

This can look like cloud computing to reduce hardware or the use of automation to reshape the workplace. Technology can be integrated into all areas of business.  

But this transition is not only technical. The company culture and people within your business need to adapt and be open to experimenting in order to successfully incorporate new technology.

Digital transformation fundamentally challenges the way businesses to provide value for their customers. Even though it involves loads of data and new technology, a customer-centered approach is ultimately what will drive your business forward. 

Successful digital transformation, when carried out correctly, allows companies to launch, analyze, and adjust digital initiatives that help it adapt to the changing market conditions and better meet customer needs. 

 

 

Why Is Digital Transformation Important?

Digital transformation is becoming essential and important for all businesses irrespective of their size and nature. There is no counter-argument against the significance and inevitability of digital technology.

At Trio, developers understand that digital transformation can be a vague expression. You don’t really know what digital transformation entails or what it looks like, especially if you have a non-technical history. 

The importance of digital transformation for Trio is deeply connected to our ability to define a clear path forward for our clients. 

One leader at Trio sees digital transformation as something that “encompasses…factors such as building a team, managing a team, managing the project, shaping, and growing a product”. 

At this point, digital transformation becomes much more than abstract. It becomes a distinguished mode of furthering the success of your business. And this is what makes digital transformation crucial. 

In what ways can digital transformation improve your business? Take a look. 

Transformed Customer Experience

Largely because technology is getting better and better every day at meeting customer needs and improving efficiency, customers look for easy, quick, and valuable solutions to their problems. 

The customer's experience is the real purpose of digitalization. Therefore, the major objective of digital transformation is to improve the customer experience by using cutting-edge technology

This can be achieved by tracking and digitizing the buyer’s journey; generating insights at faster rates, and speeding up the delivery of journey transformations.  

Improved Data-Based Insights

Digital transformation improves the capability of businesses to track and interpret the information that is collected during digital marketing campaigns and daily operations. Moreover, this information enables organizations to optimize their business strategies for better results.

Expenses and revenues are the two principle insights that reflect how sustainable businesses are. Integrating data-based insights into the company culture can make huge changes to these measures.

Improved Communications

Digital transformation provides an opportunity for unity for your employees. To maximize the probability of a successful transformation there needs to be strong communication. 

With encouragement, employees can break down age gaps and social divides to engage in conversation and learn together. Solid leadership at this point will improve the digital intelligence of the workforce.

New Skills and Knowledge

As new technology takes over, the demand for specialized skills will also grow and evolve. New technology in the modern day will require the understanding and application of a number of new skills like: 

  • Augmented Reality
  • Machine Learning
  • Cloud Computing
  • Artificial intelligence
  • Growth Hacking
  • Data Exploration

Businesses need to adopt new technology in order to keep themselves competitive. Otherwise, they will be wiped out of the market. 

The scope of digital transformation is so vast that it covers all the aspects of our social and economic life so businesses need to develop clear strategies that reflect the changing demands of digital technology.

What Role Does Software Engineering Play in Digital Transformation?

Software engineering is at the base of all modern technology, and it is a necessary part of the digital transformation conversation. 

Its duty is to bring the ideas of new-age technology to life and make sure that not only is it functional and can drive growth but that such technology meets ethical standards and maintains a positive impact. 

5 Challenges for Digital Transformation in Business

Just as software engineering plays a huge role in the world’s current digital transformation, digitization presents challenges that threaten the successful execution of any project. These challenges are not unheard of in the software development world, but they should always be considered.

1. Time-To-Market

The 21st century is a dog-eat-dog world. Companies will do anything to stay ahead of the competition. What this does is enable customers to expect new innovations to be available as soon as possible. 

The same goes for new features for existing products. This challenge of increasingly reduced time-to-market keeps companies on their toes. 

2. Flexibility

Assuming that a company manages to adhere consistently to the strict time-to-market pressures, it still has to plan for changing customer needs. 

The competition pounces on any opportunity that it sees. In turn, companies have to produce flexible and agile product models that can take up new functionality or they may fall behind the competition.

3. New Technologies

In a world where new devices and technologies are launched regularly, software developers and companies have to prepare for relatively new concepts to stay competitive in the market.

4. Technology Heterogeneity 

With the rapid supply of new technologies come heterogeneous devices. Companies have to standardize the interfaces between completely different technologies

5. Customer Orientation

Largely due to the rise of smartphones, software development has shifted most of its focus from functionality to customer experience. This forces companies to keep user interfaces in mind at all times when developing consumer applications.

Why Are Businesses Experiencing a Digital Transformation?

Digital transformation occurs in a number of ways. And it is up to your business to appropriately integrate it into your business and figure out how its potential can be best applied.

For example, with the rise of AI and machine learning, it’s only a matter of time until you’ll see insights-driven companies taking the lead in the market. The concept of insights as a service (IaaS) is becoming the next big thing in data analytics and creating a decisive advantage for companies who decide to implement it. 

Digital reality is being reigned by VR and AR, and multiple industries have boosted their leverage to set early adapters apart from the competition. Cloud technologies and blockchain technologies follow closely, becoming the foundation for a series of startups that are aiming to bring a new vision to the table. 

However, at the root of all these technologies is strategy. Strategy drives digital transformation. 

As appealing as AI and other cutting-edge technologies may sound, they cannot be implemented in a company without a precise blueprint that covers planning, deployment, and management. Without a clear plan, companies are left with nothing but chaos – which not only complicates innovation but can also result in significant revenue loss. 

Don’t overlook the power of technology to transform industries and people’s lives. But in terms of digital transformation, this is a supporting tool rather than the defining tool. This process doesn’t happen from the bottom-up. It is dictated by the goals of your business. Technology is a tool to enable growth to reach these goals. 

Technology and strategy are two inseparable factors that drive digital transformation. To feed growing consumer expectations, improve user experience, remain competitive in the market, and adapt to changing work environments, companies need to push for the right balance of both factors. 

How To Know If My Business Needs a Digital Transformation?

Digital transformation, to be frank, is a must for all businesses. Your business might rely on a tried and true method for attracting and pleasing customers, and no doubt this method must have worked for a number of years. But time necessitates change. 

What you knew to be true may no longer be delivering results or holding integrity in the market. You shouldn’t take this negatively. Learning new information – whether it’s the shape of the Earth or a new strategy of digitization to optimize your business – is always a good thing. 

Unless your business is already at its peak and has improved operations with all available and sustainable technological advances, there is a mighty good chance that your business needs a digital transformation. 

For startup companies, digital transformation makes even more sense. It can be a cost-effective means of getting everything up and running, especially if cloud technology is involved

The opposite of digital transformation can look a lot like staying still. And negligent progress can be a de-motivator for you, your employees, and important stakeholders. Not to mention, customers will always demand more, and it’s your job to supply it

What Is a Digital Transformation Framework?

Digital transformation requires businesses to map out a clear plan of action that can explain how the change can be integrated into business operations. A framework that explains the process of digital transformation within the company is a requisite, not an option. 

The process of digitization is happening faster than most industries can keep up with, which prompts company leaders to search for optimal ways to adopt new technologies. It’s not always about doing it faster, but about finding the ultimate solution for your company to enhance growth and simplify the process of change. 

This framework is unique for each and every business out in the market and there is no one-fits-all solution to bringing the latest technology on board, but without a strategic approach, companies risk not being able to catch up with fast-paced changes and miss out on emerging solutions. 

The simple goal of a digital transformation framework is to eliminate the chaos bound to the introduction of unfamiliar technologies to daily business practices. It covers everything from the usage of old laptops and legacy data to the implementation of technology in the departments that don’t know about it. 

And the bigger the company is, the more complex this process becomes. An improvisational approach that may work for smaller entities and tech-savvy startups will be futile for seasoned business giants.  

An effective framework provides the company with a clear explanation of the processes and the changes to be done as well as the key performance indicators (KPIs) to measure the performance of new practices and the business goals that it aims to achieve. 

It also addresses the role of the employees in the transformational processes and how the company culture is being affected by these changes. 

5 Core Principles of a Digital Transformation Framework

Using an agile approach to address your business’s digital transformation can lead to a quicker and more collaborative process. The following core principles can serve as guidance to your digital transformation framework.

1. Start with The Vision

Learning about what horizons new technology can open up for your business will help you measure progress and make adjustments to optimize your business process.

Just like in any other process, identify the problem or pain points will help you make the most out of new-generation technology. Without a bigger vision, the company would lack any direction for development.

2. Build Digital Customer Engagement

Industries must change and adapt to customer’s needs. Digital transformation plays a part in this by creating new ways to connect and engage customers and improve the user experience whether that’s on the cloud, through data, social media, or otherwise.

3. Manage Digital Security

Growth of the digital space doesn’t only mean positive change for the business itself. Unfortunately, the development of new technologies can attract cybercrime.

To ensure cybersecurity, digital platforms should opt for flexible and secure solutions to help businesses grow while lowering their security risks through encryption and other security methods.

4. Drive Insights with Data

To make informed decisions, data visualization should be a priority for businesses that aim at competitive growth. It helps to better understand and communicate information and creates meaningful and fact-supported insights.

5. Choose Digital Agility

The agile approach helps to create a competitive advantage in a fast-changing environment, where traditional business models fail due to rigid standards and extended timeframes, during which market requirements may change. 

Digital agility supports innovation by giving the companies a possibility to adopt real-time changes and be more flexible in the face of changes

4 Steps To Choosing the Right Digital Transformation Framework

The process of choosing or making a framework mirrors other processes you may see in software development and in general. The idea is to develop a plan and refine it as needed. Below is a more specific breakdown.

1. Internal Discovery

As mentioned above, the core of digital transformation is vision. Start with some questions to center your mission for digital transformation. These examples may help you brainstorm:

  • What recurring problems can be addressed with new technology?
  • How can new technologies enhance customer experience and optimize your business?
  • Which insights can guide your business’s digital transformation?\

2. Designing the Process

Once more, recall that strategy is integral to a successful digital transformation process. While improvisation might suit some, it is a risky way to do business. 

Use detailed metrics and definitive roadmaps to design how your business’s digital transformation will take place. Appoint task managers to lead the transformation. 

3. Initiate the Digital Transformation 

This step is where you put everything into action. It’s important that however you implement your framework leaves room to collect metrics on how company culture is affected in addition to different categories of your business like customers and employees. 

4. Continuously Refine the Process

Utilize the metrics you’ve collected to perfect your digitization process again and again. Set new benchmarks as you do so. Old benchmarks won’t suffice with new technology. 

Conclusion

While the term digital transformation may look intimidating, at the end of the day its just optimizing your business in concurrence with the times. Naturally, this means adding new technology and integrating it into business operations to appease customers and improve the business itself. 

You may not realize it but such a process occurs in your personal life too. Like getting a new phone because you need new features for the technology to be useful. However, in business, such a process needs to be much more strategic. 

This is why your business needs a digital transformation framework. A digital transformation framework is an organized methodology for converting your business to a distinct technological realm. 

Hiring software engineers will be useful for creating this framework and putting any new technology into the rotation. Trio can turn the abstractness of digital transformation into reality. Learn more about hiring software engineers to make your digital transformation framework

Daniel Alcanja

CTO

About

Co-Founder & CTO of Trio. With more than 17 years of programming experience

Frequently Asked Questions

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To put it simply, digital transformation is a process of implementing and using new and fast-changing digital technology to solve problems and improve business practices.

Digital transformation is becoming essential and important for all businesses irrespective of their size and nature. There is no counter-argument against the significance and inevitability of digital technology.

Software engineering is at the base of all modern technology, and it is a necessary part of the digital transformation conversation.

Digital transformation occurs in a number of ways. And it is up to your business to appropriately integrate it into your business and figure out how its potential can be best applied.

Digital transformation, to be frank, is a must for all businesses. Your business might rely on a tried and true method for attracting and pleasing customers, and no doubt this method must have worked for a number of years. But time necessitates change.

Digital transformation requires businesses to map out a clear plan of action that can explain how the change can be integrated into business operations. A framework that explains the process of digital transformation within the company is a requisite, not an option.