Digital transformation may be defined as the impact digital technology has on changing different aspects of life as we know it. Digital revolution is the main characteristic of the era we live in. Technology has an influence on everything, and it covers more parts of the everyday life than it was imaginable several decades ago.
There are three main phases through which technological impact can be understood:
- Digital competence – ability to use technology in order to achieve certain personal or business goals;
- Digital literacy – ability to find, create, understand and rate different content using digital technologies;
- Digital transformation – moving from paper and physical environment (work or personal) into a digital environment.
In business terms, transformation represents comprehensive change of all aspects of the business. The need for transformation appears when the business can no longer continue its growth and development, when it gets stuck in some way. As long as there are improvements which gain certain benefits, no transformation will be conducted.
Performing transformation means changing absolutely everything. That includes finance, HR, technology, marketing strategy, sales approach and many more business components.
Implementing changes in one aspect, creating new product or expanding the market is not transformation. Transformation starts only when everything else fails; when the only solution left is to change the core of the business and all that it implies.
The term digital may be defined as anything expressed with binary code (digits 0 and 1). Since it is rather broad definition, let’s narrow it down by saying that digital is anything that can be presented by a machine or a computer. In this case, the term refers to the new IT technologies that change the perspective on businesses of all types.
Digital transformation can work in two ways:
- First, it can be simply making the online world part of the business – creating website, mobile app, social media profiles, maybe online store etc. The question is: can that be called transformation, considering what transformation is? The answer is not that simple, but it is some kind of transformation since whole perspective changes once new technologies come.
- The other way is letting technology really impact the business and change its field of work. This may be the real definition of digital transformation, because it actually transforms the given business.