Digital transformation is the use of new technologies to create business value. This can be as simple as converting paper documents to electronic files, or as complex as creating an entirely new business model based on the Internet of Things (IoT) and artificial intelligence (AI). The best digital transformation strategies involve multiple technologies. They don’t just make existing processes faster or more efficient; they enable new ways of doing business.
Companies that embrace digital transformation often focus on four key areas: enhanced efficiency, better customer experience, scalability and growth opportunities and improved agility. These benefits are created through the implementation of technology tools that automate manual processes and reduce error rates, for example. Digital transformation also provides broader access to data and analytics, which helps businesses make more informed decision-making and take advantage of new opportunities.
For instance, Netflix’s digital transformation enabled it to shift from renting movies in stores and combing through shelves of tapes and DVDs to streaming video content directly to customers. It also gave the company unprecedented insights into viewer preferences, which helped it decide what to produce in-house and what to license from other sources.
Companies that engage in digital transformation should consider how to bridge silos and create a central hub for data and information. This can help to foster communication among staff and external partners, improve teamwork and collaboration, and ensure that all relevant data is available. It can also provide a platform for future innovations. For example, an AI system could mine marketplace and sales-performance data and combine it with your internal tribal knowledge to identify trends and patterns that can give you a competitive edge in winning new business.