As companies look to future-proof their operations, digital transformation has become a go-to buzzword across industries and sectors.
A catch-all phrase that describes the integration of digital technology into all areas of business, the process of digital transformation is about integrating digital and tech solutions to create or improve processes, workflows, and the customer experience.
This process of adding digitalized processes to your company can often involve a dramatic overhaul of company culture. It’s about making a choice to reimagine how your company does business, with the support of digital technology, and ensuring that your company remains up to speed with your competitors.
An effective and thorough digital transformation will incorporate all aspects of your business, including operations, customer service, sales, and marketing, for a more agile and flexible organization. With the weight of increasing customer expectations regarding service efficiency, digital transformation is becoming a critical process for organizations to not only thrive but survive in ever-more competitive markets.
Your digital transformation begins and ends with the customer. Before you undertake the process, it’s important to identify and evaluate where your company needs to build efficiency through digitalized processes, and this means viewing your business from the customer’s perspective. Consider the most frequent pain points that customers experience, and how you can support customers in facing these challenges through digital and tech solutions.
When you view the customer journey in this way, you can more easily identify the opportunities available to your business, and the improvements that you can make at each step.
Don’t fall into the trap of believing that digital transformation is restricted only to tech companies. Organizations in every industry and every sector can undertake digital transformation processes to enhance their operations, although the process will vary depending on what your company specializes in.
For example, the digital and tech solutions that a manufacturing company will aim to invest in will differ from a business that operates in retail. But all can benefit from deploying new technology to improve processes and practices.
The difference between regular business transformations and the digital kind is that the latter doesn’t end once a change has been achieved. With the constant development of new technologies and new ways for them to become integrated in business, your digital transformation will be an ongoing journey as you continue to make improvements and adjustments.
Why is digital transformation beneficial?
There are many ways in which digital transformation can offer benefits to your company across teams and departments.
Drives decisions based on data
The ability to collect significant amounts of data, carry out in-depth analysis and implement actionable insights is a major advantage of digital transformation. Whether you work in sales, marketing, customer service, or product design, you can use digital solutions to collate data from multiple touchpoints into one centralized location. From this point, you can apply tools to share knowledge, analyze data, and support company decision-making.
Increases the productivity of teams
Give your teams a boost with the help of digital solutions like AI and automation. You can ensure the automation of repetitive and mundane tasks, freeing up more time for your human agents to work effectively. You can also use AI to smooth out natural human errors in repetitive tasks. The application of detailed, actionable insights relating to customer behavior will also assist productivity and support decision-making by stakeholders.
Improves customer experience
Offering a positive customer experience is essential for any company. There are greater demands from customers than ever before, particularly in offering a personalized service. This can include a wide variety of features, from seamlessly integrated multi-channel communication options like instant messaging and social media platforms, tailored product recommendations, saving a history of past customer interactions, and tracking customer behavior to make the customer journey feel more unique and personal.
Leads cross-department innovations
A notable side effect of digital transformation is that it can often work to knock down walls between departments, meaning a reduction in separate silos. It is easier to collaborate through integrated data and communication channels. Implementing the tools for this can streamline workflows, shape new internal processes and frameworks and modernize administrative procedures with the help of digital and tech solutions.
Increases revenue
Digital transformation can be a real revenue booster for your company if you implement changes in a structured, strategic way. At least 56% of CEOs have claimed that this is the case for their business. The centering of the customer and the culture change sparked by digital transformation means that obtaining leads becomes a key focus, and prioritizes revenue growth. Digitalization can also allow companies to cut costs thanks to scalable solutions, meaning a potential revenue increase.
Top technologies being adopted in 2025
Depending on the industry you operate in, whether it’s financial services, manufacturing, tech, or a completely different area, the technologies you need to support your digital transformation will vary. Here is a selection of some of the leading technologies companies are adopting in 2023.
AI agents adoption
You can streamline workflows, support the work of human agents and develop important customer insights by applying AI agents. With the help of algorithms and contextual data, AI undertakes a process of learning that means it can operate with minimal human input. This includes exciting innovations such as chat and voice AI agents, which are more advanced and perceptive than ever thanks to developments in natural language processing and generative AI, enabling them to interact in a more human-like way.
Big data and real-time analytics
Thanks to sophisticated analytics, you can develop more advanced insights about your customer base and their purchasing interests. When you apply big data analysis, you can quickly glean important information about customer behavior from a significant amount of collected data. This also includes real-time analytics which can offer insights in a fast and responsive way to support the work of human staff during an ongoing task. Overall, technologies like AI have the ability to assess large datasets more rapidly and accurately than the human eye, ensuring greater efficiency for your company.
Robotics and automation
Similar to AI and machine learning, you can use Robotic Process Automation, or RPA, to automate processes at scale, including handling transactions and data collection. You can also use RPA for more sophisticated tasks like replying to emails or for data analysis. This is achieved by using bots powered by AI to mimic the actions of a human user, allowing you to automate IT operations at scale and refocus human agents on more complex tasks. Usually, the automation involved is less sophisticated than AI-powered chatbots driven by machine learning, but RPA is still valuable for performing automated tasks at a large scale.
Steps to take for your digital transformation
You might be wondering how to approach your company’s digital transformation. There are a number of steps to take during your journey, from initial research through to completion.
Identify your business needs
Before you throw yourself into creating a strategy, you need to identify the areas where digital and tech solutions can add the most value to your business. As mentioned above, follow the customer journey and consider customer pain points to ensure you are making smart decisions that really benefit the people who interact and invest in your business. It’s easy to jump into the idea of adopting cutting edge digital technologies, but if they aren’t useful to your business model, it can become costly and ineffective.
Develop a digital transformation strategy
The next step, after identifying business needs, is to develop a comprehensive digital transformation strategy that effectively meets your overall business objectives. Not developing a strategy means that you lack a wider view of your digital transformation and that your decisions may not be as effective. Committing to a digital transformation can be costly - even more so if not targeted properly.
Invest in the right technology
Your digital transformation strategy must be supported by the right technology. Different digital and tech solutions will suit your business needs, which changes depending on your customer base, your industry or sector and what goals you want to achieve. It’s essential to carry out research and find the right solution for you. For this stage, external consultants can help, but you also want to have a strong in-house team to help ensure all digital chances make business sense.
Upskill your workforce
Don’t leave your employees in the lurch. It’s important to ensure they’re equipped with the right skills to use the new tech and digital solutions available to them. In 2024 there was a significant increase in companies offering upskilling programs to staff because they recognized the importance of properly training employees to keep pace with the technology they adopted. A skilled team can get the most out of these exciting technological developments and can even lead the way on new innovations and ideas.
Monitor and adapt
Your digital transformation is never complete. This process is continuous, where new tech and digital solutions will become readily available and your strategy should always be open for further assessment and adjustment. You may also need to make adaptations to your digital transformation strategy if you find that you’ve invested in a technology that isn’t working for you. Remember, when you are looking at digital transformation, ensure you have an operating model that can scale, so that it works across all teams and can grow with you.
How companies are embracing digital transformation
Getting rid of legacy systems
Digital transformation also means discarding outdated, limited legacy systems. This refers to systems that still perform their original function but have restricted growth and are becoming obsolete. You cannot successfully carry out a digital transformation strategy on a foundation of outdated solutions.
Implementing more agile, intelligent systems can support you in evolving your business in the right direction. As businesses look to embrace technologies such as cloud-based solutions, they are stepping away from those legacy systems that are restricting their growth.
Making systems digitally immune
Increasing resilience in a rapidly digitalized world has become a major goal for companies in reducing risk and delivering on value. A company that is digitally immune will apply risk mitigation to reduce system downtime, improve operations and ensure business continuity.
Relying on data-driven insights and assessing areas of potential system failure will help you identify the practices and technologies you need to apply - from software design, development, automation, operations, and analytics - to create a strong digital immune system for faster problem resolution and greater resilience and stability.
Data, data, data
Digital transformation is powered by data. It’s vital that companies develop a strong data strategy to implement data governance and management practices for the secure handling of data. Analytics and machine learning are tools that can help companies gain the most valuable insights possible.
Companies should also explore ways in which data can be securely shared across the organization to improve decision-making rather than being kept in separate silos. Businesses that effectively mine, manage and analyze their data put themselves at a significant advantage.
Cyber security gains importance
With the development of cloud solutions, the amount of data available to companies is seen as an attractive target for cyber attacks. A third of all global businesses were breached more than seven times in 2024. A company that implements effective cybersecurity measures will ensure continuity and with it, build a reputation for reliability and consistency. Cloud security is set for incredible growth over the next few years.
Sustainability is top of the mind
One of the biggest challenges facing businesses, sustainability is recognised by CEOs as a top three priority. A focus on sustainability means companies leveraging tech and digital resources to reduce carbon footprints and uphold sustainability targets.
According to statistics, 92% of companies aim to achieve their net-zero targets by 2030, demonstrating the importance of this goal. Digital transformation can form a key part of this drive for sustainability, helping support businesses in making the right sustainable investment decisions as well as applying data to environmental, social and governance criteria and strategy.
Impact of digital transformation on consumer behavior
With the rise of easily accessible information, a variety of public communication channels via social media, and on-demand products and services, consumers have greater expectations than ever about the service that they receive and there have been significant changes in how they operate.
Creating an on-demand culture
Delayed gratification is no longer an acceptable part of the customer experience. Now, there are expectations for every business to replicate the on-demand experience and high standard of efficiency that customers may be accustomed to from brands such as Amazon.
Customers expect immediate, personalized service. The rise in automated self-service options provides a way for companies to meet that demand, as customers can use automated tools like chatbots to receive 24/7 support and independently resolve their own issues.
Shift in attention spans
The increase in online content and clamor for our attention may lead to a decline in our attention spans. Why stick with one product or service when you know that you can access another in a few clicks? It might not be so simple, but overall there is a decreasing window of time in which companies have to attract new customers.
Think about watching a TV show or movie on Netflix that you don’t enjoy. Knowing the wealth of other options out there, why would you persevere with a choice that you don’t enjoy?
Experience-based decisions
Experiences govern the reputation of companies. Positive experiences will lead to enthusiastic customers likely to buy products or services more frequently, become less sensitive to pricing, actively write positive reviews and grow their loyalty over time.
Experiences have become a significant factor in whether or not a business successfully retains customers and grows its customer base. How the customer feels they are treated is now as important as the product or service itself, and with the availability of public reviews, your business will be judged on this basis.
Enhanced connectivity
Customers are more connected than ever before, using smart devices to access reviews, ask questions, and research products or services from anywhere at any time. This means that brands have had to grow their online presence, particularly with an omnichannel approach in marketing and social media.
It’s believed that 54% of social media users use social media to research products. Customers - and potential customers - also have greater interconnectivity than ever before, with the ease of sharing opinions and discussing products or services on forums and social media platforms.
Higher expectations
As a result of digital and tech solutions offering greater accessibility, empowering knowledge, and flexibility, customer expectations are at an all-time high. Consumers expect more personalized service, targeted recommendations, and around-the-clock support than ever before.
Not only this, but customers have become aware of their own empowerment too, with the refocus on positive or negative experiences as part of the consumer journey and the visibility of public reviews.
Why digital transformation is the future
Executives and decision-makers view digital transformation as a way to future-proof their business, especially with fast-growing technology trends. This new age of digital immediacy means that businesses can only successfully meet consumer demand by undertaking a digital transformation strategy and automating a variety of processes.
Indeed, it is accepted that improving customer experience is the most common objective for a business when driving its digital transformation. Whether it comes to providing self-service, offering virtual agents, developing more sophisticated customer insights and more, digital transformation can shape your business for the future. As is so often the case in the world of business, customer demand drives change.
Reinforcing cybersecurity measures is another effect of digital transformation. When a company’s security is compromised, it can be destructive to its reputation and revenue streams. As the world becomes more digitalized, heightening cybersecurity and implementing data privacy are two key tools to combat vulnerabilities.
Decision-makers and stakeholders are empowered by digital transformation. Applying AI solutions to collect data and create actionable insights assists decision-making at the highest levels and informs company strategy.
Internally, digital transformation can also drive operational efficiency. Breaking down silos between departments, simplifying and streamlining workflows and collecting huge amounts of data for smoother analysis can all be supported by sophisticated digital solutions.
The most important thing to remember is that the technologies you apply will vary depending on your digital transformation goals and the industry in which you operate.
How to measure the success of your digital transformation strategy
Digital transformation is the future. But how can you be sure that your digital transformation strategy is successful? You can track and measure outcomes to see how your strategy is performing, and understand if the changes you’ve made are creating value. If not, it’s still possible to change course.
Typically, the key performance indicators for digital transformation come under one of three categories. There is value creation, where digital solutions target operational metrics that can be understood in terms of financial benefits.
Then there is team health, where digital transformations are measured against teams depending on staffing, training, and critical capabilities. High-performing teams are naturally likely to be more productive and successful.
Finally, there are change management progress metrics. These measure progress in building capability and the strength of your digital transformation. You will discover if teams are mobilizing as planned, adapting to the new strategy, and building new skills to manage change.
How digital transformation has helped to change companies
Every company requires a significant change in company culture to manage a successful digital transformation. One of the world’s biggest companies, Amazon, was once a small startup that saw opportunities to invest and upgrade its technology, data management, talent acquisition and other aspects of its business to take its current place as a global market leader.
This type of digital transformation is not just restricted to tech. The mining company Freeport-McMoRan applied an AI model at its ore-concentrating mill in Arizona. The model was loaded with years of operating data and guided the crew to greater outputs than ever before, optimizing performance with minimal investment - and in an industry that you might not typically expect to be open to the use of artificial intelligence models.
Digital transformation can revitalize logistics and operations too., UPS, the shipping and supply chain management company, applied digital solutions to track packages and deliveries in real-time, developing new tools to manage its fleet of vehicles.
With machine learning using collected data on previous deliveries and pickup times, UPS developed optimal routes for drivers to take. This helped to cut waiting times for deliveries, thus satisfying customers and reduced wastage in terms of fuel and driver time.
McDonald's successfully made its fast food offering even faster by applying a digital transformation strategy to overhaul customer experience.
Anyone visiting a McDonald's restaurant will have noticed the implementation of new digital ordering kiosks, where customers can use an interactive touchscreen to order their food without having to stand in line and speak to a member of staff. This addresses two customer desires by both cutting wait times and providing an independent, self-service option.
McDonald’s isn’t the only food company harnessing the power of new technologies to offer a better customer experience. Domino’s has introduced AI-powered chatbots to create a conversational interface that speaks with users. Those who are registered can use Facebook Messenger to reorder dishes they’ve previously ordered or opt for one of their regular favorites, and all users can track the progress of their order as it is prepared and delivered.
For its part, Ikea has developed its customer service offering by purchasing new technologies. The platform TaskRabbit is all about connecting the public with people who can run errands and complete tasks such as home repairs, cleaning and more.
By acquiring TaskRabbit, Ikea can now offer additional help for those who want it. If they don’t want to assemble their r¡furniture, it’s easy to simply contact someone to come and help.
Ikea is also using augmented reality to help people furnish their spaces virtually, showing them through the app how different rooms will look before they make the purchase.
Nike has seen its fair share of digital transformation, too. Keen to connect in a better way with its customers, it harnessed powerful data analytics to better understand what its customers wanted, how they lived and what they expected from their favorite brands.
The result was the development of concept stores and updating its ecommerce strategy, both of which improved customer experience. It also created more options, such as membership opportunities, to build a community united by the brand.
Final thoughts
From cloud technologies to AI and automation, there are so many different technologies available today to help businesses work smarter.
Whether you’re focus is on streamlining processes, offering customers greater value or building more connected teams, there is technology out there to help you do just that.
No matter the size of your business or the sector you work it, with the right approach to digital transformation, you can experience immediate benefits as well as ensuring the technology you choose scales with you as you grow.
The most important thing you can do is build an effective strategy for digital transformation that assesses what your customers and employees want, how digital and tech solutions can provide those missing gaps, and address the challenges you’ve identified.
A robust digital transformation strategy must also consider cybersecurity - a huge consideration for today’s businesses - as well as the ongoing adaptations and modifications that you can make, to ensure your business always remains one step ahead of the curve - and the competition.