Why is digital transformation so important

Why Is Digital Transformation So Important? Here Are 5 Reasons

Why is digital transformation so important?

Digital transformation is the process of exploiting digital technology to make business improvements, transform business processes, increase organizational effectiveness, or change the organization in some way.


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There is a great deal of discussion about digital transformation – and a great deal of investment in digital transformation.

Yet with all the investment and the buzz surrounding the topic … why does it matter?

In other words:

Why Is Digital Transformation So Important? 

Here are five reasons…

1. Digital transformation enables businesses to create completely new products and services

Digital technology has opened up gateways to entirely new products and services.

In fact, many products and services are completely digital, such as:

  • Web apps
  • Mobile apps
  • Enterprise-grade SaaS platforms
  • Online teaching, training, or consulting
  • Information products

To name just a few.

A business that leverages technology correctly can augment its current line-up of solutions, or even transition to a new product model entirely.

2. The right technology can create exponential productivity gains

In the right hands – and with the right strategy – digital technology can cut costs, improve efficiency, decrease error rates, and create extraordinary productivity gains.

Here are a few examples:

  • Digital adoption platforms. Digital adoption platforms (DAPs) are tools that streamline software training, onboarding, and the software experience. They can be used to significantly enhance enterprise software adoption and training. And they can also be used for customer onboarding and training – cutting customer acquisition costs, increasing customer sign-ups, and improving the user experience.
  • Automation. Automation can also cut costs wherever it is applied. There are simple reasons for this: automation tools do exactly what they are programmed to do, they never make errors, they do not sleep, and they are very scalable. There is controversy around the role of automation in the workplace – which is another reason why employees should be trained – but the benefits are undeniable.
  • Data, analytics, and machine learning. Like automation, the correct use of analytics can dramatically transform a company’s operations. And artificial intelligence takes data and analytics to the next level, allowing machines to “teach themselves” a specific task or a set of tasks. In the right scenario, machines outperform humans almost all of the time.

Naturally, technology is the central catalyst for digital transformation and the digital revolution itself.

However, we should never forget the human component, because, in fact, digital transformation starts and ends with people.

3. A good customer experience strategy – coupled with the right technology – can enable a unified experience across all channels

Everything that we do with technology is aimed towards other people.

Nowhere is this more evident than in today’s ubiquitous customer experience trend.

The customer experience is widely acknowledged to be a competitive differentiator – and good customer experiences can significantly improve profit margins – which is why so many businesses focus on it.

The right technology lets businesses:

  • Analyze customer data, such as their interactions with data or marketing programs
  • Use that information to improve the customer experience
  • Integrate multiple digital channels and create a unified experience across those channels

Among other things.

Naturally, technology itself is only part of the equation. The other part is a solid strategy combined with effective execution.

4. Digital transformation can increase efficiency among business partners and across the entire supply chain

For better or for worse, the digital economy is transforming at a global level.

This means that in order to participate in the global supply chain, digital transformation is a must. 

For instance, if a supply chain adopts new technology in order to increase efficiency, cut costs, and so forth, then all members of that supply chain must also transform in order to keep up. After all, if a single link in the chain fails to keep up, then the entire chain is held back.

After a certain point, that link will get left behind and left out of the loop – while more savvy, forward-thinking competitors move in.

5. Organizations must transform to stay competitive

The reason covered above echoes the most important reason of all…

Digital transformation is necessary in order to survive and stay afloat.

A business that fails to move forward will face pressure from a number of directions.

For instance, a business will be pressured to digitally transform by:

If an organization fails to respond to pressures such as these, then there will certainly be other companies willing to step in and take over.

Conclusion: Digital Transformation Is Not an Option

Ultimately, digital transformation is a fundamental, necessary part of the digital revolution.

Organizations can resist change – but they do so at their own peril.

There are a great many rewards for engaging in digital transformation efforts. And, although these efforts may be costly, they are necessary.

On the other hand, if a business chooses to resist the inevitable, it will fail to take advantage of the gains offered by technology … and it will be overrun by competitors who do.

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