What is digital transformation?

Digital Transformation is a term that is increasingly heard and used in various contexts, ranging from purely technological to cultural, organizational, social, and managerial.

The term Digital Transformation refers to a set of changes of various kinds driven and participated in at various levels by digital technology.

The development of increasingly powerful, sophisticated, and “dematerialized” technologies has indeed brought about a true paradigm shift in the way business is conducted and the characteristics of society itself.

Digital transformation: meaning and definition

Digital transformation represents the final stage of a complex evolutionary process. It begins with the acquisition of new digital skills and their operational, tactical, and strategic use through new technological tools that support traditional methods.

It represents a fundamental change process for businesses as it encompasses all aspects of their operation, from internal organization to business models, and customer interaction. This process is made possible by advanced digital technologies that are reshaping the business landscape.

Below, we will explore the benefits of Digital Transformation, the key technologies underlying this transformation, and how to successfully apply it in the corporate context.

Key technologies underlying digital transformation:

• Cloud Computing: The shift to cloud-based solutions allows companies to access scalable computing resources flexibly. This reduces dependence on local hardware and offers greater agility.
• Artificial Intelligence (AI) and Machine Learning (ML): AI enables the automation of complex processes, data analysis, and personalized experiences. ML applications can enhance trend prediction and operational optimization.
• Internet of Things (IoT): Connecting physical devices to the network allows real-time data collection from various sources. This data can be used for monitoring, preventive maintenance, and creating new services.
• Data Analytics: Advanced analytics technologies enable companies to extract meaningful insights from collected data. This supports data-driven decision-making.

Technology and IT as means for digital transformation

One of the common mistakes is to attribute digital transformation exclusively to technology or a new marketing strategy model.

It is important to consider that technology and IT are merely the means through which these changes materialize. Transforming only the organizations and tools used is not enough. A significant effort is required in terms of people to continue innovating in one’s business. For this reason, adopting a digital transformation process should be a key strategic priority for any company, or at least for those that wish to compete successfully in the near future.

Benefits of digital transformation for companies:

• Operational Efficiency: The adoption of digital solutions enables companies to automate manual processes, reducing error margins and increasing operational efficiency. This leads to higher productivity and reduced operating costs.
• Enhanced Customer Experience: Digital transformation allows companies to offer a more personalized and real-time customer experience. Access to customer data helps better understand their needs and provide targeted products and services.
• Business Agility: Companies can respond more quickly to market changes and new opportunities thanks to the flexibility of digital solutions. This agility is crucial to remain competitive in an ever-evolving world.
• Innovation: Digital Transformation fosters continuous innovation. Companies can leverage new technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), and data analytics to develop new products, services, and business models.
• Data Access: Data collection and analysis enable companies to make more informed decisions. Data can be used to identify market trends, predict customer demand, and optimize operations.

The numbers of digital transformation

To understand what Digital Transformation is and the impact it’s having on various businesses, we need to rely on research. Recent studies confirm that the process of digital transformation is now a pervasive and irreversible phenomenon in every sector. Data from the report, “The State of Digital Transformation 2023” by McKinsey & Company, an international management consulting firm, reveals that 70% of business leaders state that digital transformation is a strategic imperative for their company.

Furthermore, based on the “Worldwide Digital Transformation Forecast, 2022-2025” by IDC, investments in digital transformation are rapidly increasing, with the global market projected to reach $1.337 trillion by 2025, at a compound annual growth rate of 12.2%.

The 6 key points of digital transformation

Several studies, including

• “The State of Digital Transformation 2023” by McKinsey & Company,
• the “Worldwide Digital Transformation Forecast, 2022-2025” by IDC
• the report “Digital Transformation: A Guide for Leaders” by Harvard Business Review

have identified the 6 key points of digital transformation:

1. Clear and Shared Vision: It is crucial to have a clear vision of what you want to achieve and have it shared by all levels of the company so that everyone is aligned and working toward a common goal.
2. Customer Focus: Companies must use digital technologies to enhance customer experiences, aiming to retain and acquire new customers.
3. Digital Company Culture: Creating a company culture that is open to innovation and experimentation is important to bring about real cultural change.
4. Appropriate Technology Infrastructure: Investing in digital technologies like cloud computing, artificial intelligence, and the Internet of Things is necessary.
5. Agile Approach: Adopting an agile approach allows for strategy and solutions to be adapted to market changes.
6. Security Awareness: Data security is a top priority and should lead to the implementation of appropriate security measures to protect customer and company data.

Digital is no longer considered an option among many, but rather the only viable path for any business area.

We are rapidly moving towards the era of the platform economy, and we cannot avoid considering the implications of this significant socioeconomic phenomenon in order to address and manage it in the most effective and efficient way.

In this regard, the market for As-a-Service solutions is increasingly becoming one of the reference sectors of great importance to cope with these complex digitization dynamics.

The ecosystem of Zoho and other cloud platforms are just a few of the solutions offered by CRMpartners to manage your business at high performance standards in line with the digital transformation.

CRMpartners guides you towards digital transformation!

When approached correctly, digital transformation offers significant benefits and opportunities for success in one’s business. It not only allows for the reduction of errors and redundancies generated by manual activities but also enables the efficient management of business flows and processes in an integrated, synchronized, and automated manner.

In other words, digital transformation provides greater efficiency, improved operability, and a substantial reduction in costs.

Furthermore, advanced digital technologies not only allow for the effective management of historical and current business processes but also enable the development of predictive estimates that can guide and suggest the best actions or next best actions.

Applying digital transformation to your business:

• Awareness and Leadership: Digital transformation should be led by the company’s leadership. Creating a corporate culture that promotes innovation and the adoption of new technologies is important.
• Assessment of Needs: Companies should evaluate their specific needs and identify areas where digital transformation can have the greatest impact.
• Training and Skill Development: Investing in employee training is crucial. Digital skills are essential to fully leverage new technologies.
• Collaboration: Digital transformation often requires external collaborations with technology partners or specialized consultants. These partnerships can accelerate the implementation of digital solutions.

How CRMpartners can help you with digital transformation

CRMpartners guides companies through digital transformation. How? Through customized consulting and a process divided into several phases.

1. First, a current situation check-up of the company is conducted.
2. Next, the identification of the best solutions to adopt takes place.
3. Once the solutions are identified, project implementation and any integrations with third-party systems are carried out.
4. The final step is post-release support and training for the people who will actually use these new digital tools.

What are the obstacles to digital transformation?

Now that we’ve defined what digital transformation is and how CRMpartners can assist you in this process, let’s look at the obstacles that need to be overcome. Despite digital transformation being a virtually obligatory path for the survival of any business today, there are still many constraints and resistance factors, especially in the Italian territory, that large enterprises and SMEs find themselves having to face and overcome:

• Inadequate budgets (39.3%)
• Corporate culture (32.9%)
• Lack of managerial support (29.1%)
• Employee skills (28.8%)
• Technology partners (24.9%)
• Other (23.1%)
• Vision of leaders/decision-makers (17.8%)

Being aware of the current limitations and challenges within your organization is already the first step in overcoming them and successfully embracing digital transformation!