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What is digital transformation?

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Digital transformation is the process by which companies embed technologies across their businesses to drive fundamental change. The benefits? Increased efficiency, greater business agility and, ultimately, the unlocking of new value for employees, customers and shareholders.

Many different paths lead to digital transformation and each organizationโ€™s journey will be unique. For example, a company might introduce AI or cloud computing to enhance its customer experience. Or it might redesign its supply chain to make better use of machine learning. A company can even make spot-on predictions about the products customers will want in a few monthsโ€™ time, then shift production to meet demand.

In every case, though, starting a digital transformation journey requires a new mindset. It is a chance to reimagine how companies do things, often from the ground up.

Two concepts related to digital transformation are digitization and digitalization.

Digitization is the process of translating analog information and data into digital formโ€”for example, scanning a photo or document and storing it on a computer.

Digitalization is the use of digital technologies to change business processes and projectsโ€”such as skilling employees to use new software platforms designed to help launch products faster. While digital transformation might include digitalization efforts, it goes beyond the project level and affects the entire organization.

For most companies, digital transformation requires a shift away from traditional thinking and toward a more collaborative, experimental approach. These new ways of approaching work reveal new solutions which, in turn, can improve customer experience, drive employee innovation and spur company growth at the fundamental level.

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