What Is Digital Transformation? Here’s Everything You Need To Know

Many companies have recently begun to rethink their operations due to the widespread adoption of digital technologies. Companies have been pushed toward digital transformation after the worldwide need to go online following the pandemic.

Many businesses are looking at digital transformation projects to increase production, efficiency, and profitability. Some projects aim to replace outdated equipment with new, cutting-edge machinery, while others seek to automate previously manual processes. Although digital transformation is meant to improve efficiency and save the business time, this transition is not always smooth.

With proper execution, digital transformation benefits both the business and its customers. But, not all digital changes are successful. Learn the background of digital transformation, and why it fails.

What is Digital Transformation?

The term “digital transformation” refers to implementing digital technologies to revamp conventional, non-digital business procedures and offerings. Firms can fundamentally reinvent their management practices and how they give value to clients by developing novel processes and services in response to shifting market and customer demands.

As a company undergoes a digital transformation, it must adjust how it serves its customers and works with its partners. Any company must undergo a digital transformation, but it’s challenging for IT departments to keep up with.

The transition to digital does not have a single, definitive plan. You can make your road map, but keep in mind that the journey will look different for each company because of the unique nature of their industry, company needs, and the client wants.

History of Digital Transformation

While the term “digital transformation” may be new, its idea goes back quite a ways. Companies started using computer-aided production technology in the late 1970s. Later, in the 1980s and ’90s, respectively, enterprise resource planning and customer relationship management were introduced.

These innovations were developed to boost productivity by replacing manual tasks with digital ones. E-commerce and internet banking both became popular in the late ’90s. When internet speeds improved, previously offline jobs were moved online. Then, in the middle of the 2000s, social media emerged and wholly altered how people interact online and share knowledge.

At the outset of their adoption of digital channels, businesses concentrated on strengthening relationships with their clientele. After this, digital processes to back up customer interactions began to emerge. Companies quickly realized that they needed to establish specialized digital departments to oversee the proliferation of social media and mobile apps.

In the last decade, digital transformation has received renewed attention as companies worldwide work to maintain their competitive edge. This idea has been around for a while, but it has recently created a new sense of urgency.

Digital Transformation Equals Business Transformation

Business and organizational activities, procedures, competencies, and models are all undergoing radical change due to digital transformation. Keeping current and future changes in mind, this is done to make the most of the advantages afforded by the proliferation of various digital technologies and their ever-increasing influence on all aspects of society.

Agile, people-focused, inventive, customer-centric, efficient, productive, and able to induce/leverage chances to challenge the status quo and delve into big data are a few of the great additions that need to be developed. The emergence of new revenue streams and information-powered networks of value are driving factors and objectives of digital transformation, coupled with end-to-end user experience improvement, scalability, and ingenuity.

Why Do Digital Transformations Fail?

1. Having Incomplete Or Inaccurate Data

Covid-19 has radically altered business models and compelled companies to speed up their digital initiatives, quickly transitioning pilot programs into production. Customers in today’s data-driven economy need to innovate thanks to the data they’re collecting. As information is spread across clouds, devices, and machines, it becomes increasingly difficult to get the correct data to the right place.

2. Having to Deal with Mediocre Onboarding Procedures

One of the most typical causes of digital transformation projects falling short is a lack of well-designed onboarding and implementation platforms. Transparency and responsibility for both parties are lacking in standard project and collaboration platforms.

3. Challenges With Employees Opposing Change

People involved in the digital transformation process will need to adapt. This is notoriously challenging, as it requires not only the buy-in of upper management but also, in many cases, a wholesale shift in organizational culture, complete with winners and losers. Workers frequently prefer the status quo and fight any attempts to alter it. It’s not uncommon for costs, Net Promoter Score, and productivity to head in the wrong direction initially before turning a corner and producing long-term benefits.

4. Having No Specified Objectives For The Final Product’s User Experience

When hundreds of on-premises applications must be migrated to the cloud, the failure rate rises. Regarding the end-user experience, some businesses don’t even bother to set clear goals or conduct adequate benchmarking before, during, or after the migration process. The reason the mark isn’t consistently hit is a lack of both end-user-focused goals and reliable metrics to gauge progress.

5. Conflict Over The Project’s Goals

Misunderstanding the problem and how to solve it is a common cause of failure due to poor communication. If the project’s objectives aren’t clear or aren’t communicated effectively, there will be misunderstandings, and the project will be deemed a failure by those involved. In addition, getting people on board with new processes can be difficult if there isn’t a culture of transformation within the company or if workers are particularly resistant to change.

6. Incorporating an Outdated Technology Platform

Even when top-level support is present, digital transformation projects often fail because they use antiquated technology. Sales and marketing departments can work together more effectively if your company has the right technology to provide them with the resources they need to do their jobs. Not having the right resources will make any attempts at digital transformation futile.

7. Confusion Caused By Fear Over Temporary Failure

The fear of making mistakes may stifle entire departments, leading to reluctance to the kinds of changes and setbacks that are essential to your organization’s digital transformation but are all too often met with resistance instead. There will inevitably be setbacks when attempting digital transformation, and many teams avoid taking on such projects out of fear of temporary failure. The pace can be slowed down, but only slightly, by adopting a continuous improvement mentality.

8. Lacking Adequate Competence

Digital transformation experts are hard to come by. To “go digital” is to move your company’s operations to the cloud, where they can provide a more streamlined experience for clients and enable remote, interactive work for employees. But, cloud expertise is still in great demand and can be challenging to locate, so migrating workloads to the cloud can be time-consuming and disruptive.


When executed with forethought, digital transformation can help businesses increase profits and alter their very nature. Getting new software out to users is only half the battle. If you don’t consider the people in your organization and train the people who will be using your new technology, it will just be useless.