What is Digital Transformation?

Digital transformation is no longer an unfamiliar term to us. We can easily catch this term in our daily newsfeed or article with a typical message that this is a necessary technology in the 4.0 era. However, digital transformation may not be clear from this information. We probably thought this conversion meant uploading everything to the internet or ordering pizza via phone clicks. And is this worth it or is it just nice to have technology?

To have a closer look, let’s find out the fundamental element that formed the digital transformation term: digitization.

1. DIGITIZATION

“Digitization is the process of changing from analog to digital form” – Gartner’s IT Glossary

It is the foundation of digital transformation and the connection between the physical world and software. It means taking something that’s not digital and making it digital.

For example, you can take a picture of a person and make it into a digital picture on your computer. You can also take a book and make it into a digital book on your computer. Digitization is important because it makes things easier for you to use.

Other examples of digitization in enterprises today are that many businesses have been converting handwritten text or paper documents into digital form through several office software programs on the computer, scanning documents into PDFs saved on the computer, hard drive, CD, DVD, or Blu-ray.

Digitization plays a crucial part in data processing, storage, and transmission. There is no longer a situation when companies have to take large areas for document storage. All kinds of formats are now carried out in one system with the same efficiency and accessibility.

2. DIGITALIZATION

“Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business”– Gartner’s IT Glossary

It refers to the process of applying digitized information to make established working methods easier and more efficient. Simply put, digitalization is making your digitized information work for you.

To execute this process, we need the help of digital technologies and data to create a workflow that improves your business productivity and revenue and reduces business operating costs.

For example, to share your documents with company colleagues, instead of using a USB or hard disk drive as a third-party way to transfer your files, now with the appearance of the internet, with just a click, we can quickly send them.

Digitalization marks a shift in an organization, reshaping how value is formed and business is conducted. And when your workspace is digitalized, it turns into a digital culture and technology can be integrated into every business activity such as customer experience, business analysis, supply chain management, and marketing,… we can call it digital transformation.

3. DIGITAL TRANSFORMATION

Digital transformation is a broader term for digitalization. And it will look different for particular companies, so it is hard to define exactly what digital transformation is for each business implementation method.

In general, we understand that digital information is meant to integrate technologies into all areas of business. Every aspect and activity in your company is fully leveraged by digital technologies. For instance, instead of spending time to analyze your customer data, with some tools like Google Analytics, you won’t take much time during this period. More commonly, some companies have applied automatic timekeeping systems using many technologies, such as fingerprint and face recognition.

Therefore, there are absolutely specific changes in your business operation and the method your company values delivering to customers.

These cultural changes will result in several challenges for businesses to adapt to, experience, and get used to. And it takes time or money for the transformation.

4. BENEFITS

Digital transformation might be different for particular companies. Each business needs to identify and understand which technology has the potential to apply. A suitable and prudent strategy will attract more customer interaction, increase profit, and get the most out of your company.

For instance, Netflix got into the digital world many years ago. They started to enable video renting via email and disrupted the traditional video renting business then. These days, we can see that Netflix has transformed into digital thanks to OTT technology, which enables customers to enjoy their huge video library just on one website or application at an affordable price.

Read more: What is OTT? And why OTT box makes people gradually cut the cord.

From the case of Netflix, we can assume that digital transformation has changed the way businesses approach their customers. Before, we had to wait for customers to find us or call us. With digital transformation, businesses can increase customer contact through social media, email, online advertising, a website, or a call center.

There will be more opportunities for digital transformation in all business processes, not just digital marketing and customer service. Since IT is always developing, businesses will benefit from this new technology.

For example, recently we have witnessed lots of remarkable IT trends such as Blockchain, Artificial Intelligence, Robotic Process Automated, Cloud Computing, Face Recognition,… And the unstoppable growth of IT will surely create more challenges for companies to keep up with the digital transformation race to gain competitiveness.

However, entering the race late doesn’t mean we won’t get any competitiveness. Digital transformation is a survival issue for every business. We can see from post-COVID-19 that thousands of businesses broke down because they didn’t have a strategy to operate and approach customers. Meanwhile, many companies grow rapidly due to this phase, for example, in e-commerce.

Digital transformation might be a hard decision for us to implement for the company. Moreover, its benefits might be unclear to define. But for the long-term, digital transformation is wise for businesses on the way to optimizing business processes, and gaining more competitiveness and efficiency.

With the latest technology, our software and technology company, ITC Group, can provide innovative and suitable digital transformation solutions for your business with an experienced and skilled IT team. We have worked with many clients to transform successfully, and we will do our best to help your business go digital. Let’s contact us and get a free consultation.