Digital transformation is a process by which a company, agency, or other organized group of individuals changes how it performs common tasks based on understanding new digital technology. There are a number of different ways in which this transformation can take place, though it typically refers to a full and meaningful change, rather than an adjustment in focus or understanding. This typically occurs after the group comes to understand and recognize the importance of digital information and digitization. Digital transformation occurred for many businesses and organizations around the beginning of the 21st century, as the Internet and computers became established aspects of daily operations.
For many new companies, digital transformation may not be a consideration, as more and more companies are established with an understanding of digital information. Older companies and agencies, however, often have to undergo a period of digital transformation to “keep up” with new organizations. This often occurs as a long-term process, rather than as a simple change in focus, and many companies hire someone, such as a chief information officer (CIO), to help facilitate the process.
The first step toward digital transformation is often digital competence. This occurs when those running a company recognize the importance of digital information and how digitization can streamline various business processes. They may not yet understand how digital information can best be organized and accessed, but there is an awareness of its importance.
This typically moves into digital literacy, which is an understanding of how digital information can be used and processed. A company or group that has reached this stage may have a website and much of its recordkeeping may be done using digital information and processes. This is still typically an attempt to continue previous practices utilizing digital technology, which is often flawed and precedes full digital transformation.
Actual digital transformation occurs when a company comes to understand that technology and digital information can be used in ways quite different from previous practices. This often means that a business or agency must change prior practices and come to do business and organize information in new ways to take advantage of digitization. New businesses are often established utilizing this type of understanding, which is why older companies or organizations must adapt and change to keep up with new technologies. Once digital transformation occurs, however, then a business is likely to be better able to utilize new technology and digital services to reach customers, organize company data, and allow greater workflow and throughput between departments within the company.
