The impact of digital transformation can be far-reaching and profound as it fundamentally changes how businesses operate and deliver value to customers. In the broadest sense, digital transformation refers to the process of integrating technology into different aspects of a company. It brings more agile solutions to everyday processes like data collection, mobile access, customer experience, marketing, and analytics. It's also a cultural change that requires organizations to challenge the status quo, experiment, and get comfortable with failure.
Global spending on digital transformation is expected to hit $3.4 trillion by 2026. What makes digital transformation appealing and integral to today's business landscape? The COVID-19 pandemic, coupled with the changing market conditions, bolstered the need for automation, remote work, and efficient workflow. Adopting digital transformation initiatives has proven to enhance the way a company operates and responds to market needs in a more agile way.
Digital transformation should be at the forefront of every organization's goal. If you have yet to digitize, digitalize, and reach a total transformation, here is a comprehensive rundown of stats to encourage every company to start. These should help illustrate how digital transformation can improve your reach, customer service, and, ultimately, the bottom line.
Digitization is the first stage of the entire digital transformation process. It involves computerizing physical files or processes and relying on digital artifacts instead. Some examples include converting paper documents into digital ones, using electronics for manufacturing, and more.
Digital adoption is the next step to transformation - where companies figure out how to leverage abstracted or digitized data and processes. These innovations contribute to how documentation, production quality, time-to-market, monitoring, and production performance, among other things, can improve.
25 percent of organizations worldwide have adopted cloud-distributed technology on a large scale
Digital transformation is a top priority for 74 percent of organizations.
Digital transformation is now prioritized over cybersecurity (73 percent) and cloud implementation (65 percent).
Almost twice as many CEOs (57 percent) choose to "reinternalize IT" or bring information technology back to the core of the business for competitive advantage. (Gartner)
97 percent of companies say the COVID-19 pandemic sped up their digital transformation initiatives
70 percent of companies either have a digital transformation strategy in place or are working on one.
Digital transformation is an overall shift toward IT solutions and capabilities, where companies understand that new-era technology skills could gain their competitive advantage and generate growth for the business.
Digital transformation doesn't happen overnight. It takes considerable time, effort, and resources to shift and fully integrate it into everyday workflow successfully. Here are the biggest challenges that adopters have experienced:
Employee pushback and lack of expertise to lead digitization initiatives are the top two barriers to digital transformation
CEOs and CIOs across many industries recognize that digital transformation boosts growth and profit. Moving away from brick-and-mortar management to an AI-powered hybrid or cloud improves efficiency and productivity and could potentially bring down operational costs. These stats highlight specific industries that have benefited from digital transformation efforts:
Digital transformation has proven essential for all types of industries. It enables a more efficient approach, less downtime, and less likelihood of human errors, and ultimately broadens a company’s reach.
Perhaps the biggest takeaway is that digital transformation is a long and arduous process. Any digital application or revision will not be immediately practical without proper onboarding, training, and support to employees as well as end users. Companies benefit from having reliable resources that can initiate or support ongoing procedures.
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Latest digital transformation trends include the rise of composable business architecture, embedded AI in customer experiences, zero-trust security frameworks, democratized technology through low-code platforms, increased focus on sustainability through digital solutions, integration of physical and digital experiences (phygital), and the shift from project-based to product-based transformation approaches.
AI accelerates digital transformation by automating routine tasks to free resources for innovation, providing data-driven insights that build transformation business cases, personalizing change management approaches for different employee segments, augmenting workforce capabilities to address skill gaps, optimizing resource allocation across transformation initiatives, and enabling more natural human-computer interaction that improves adoption.
Industries leading in digital transformation include banking and financial services (modernizing customer experiences), retail (implementing omnichannel commerce), healthcare (adopting telehealth and digital patient engagement), manufacturing (implementing smart factories and IoT), telecommunications (deploying 5G infrastructure), and professional services firms creating digital delivery models.
Common challenges in digital transformation include organizational resistance to change, legacy system integration difficulties, data silos preventing unified views, inadequate digital skills among employees, security and compliance concerns, unclear ROI measurements, and leadership misalignment on transformation priorities.
Businesses measure digital success through customer-focused metrics (adoption rates, satisfaction scores, retention), operational indicators (process efficiency, cost reduction, productivity), innovation metrics (new digital offerings, time-to-market), financial outcomes (revenue from digital channels, cost savings), and organizational capabilities (digital skills development, employee engagement with digital tools).