What Is Digital Transformation? Definition, Benefits & Examples

At its core, digital transformation is the holistic process of upgrading organizational capabilities by optimizing technological systems. While the term has become a buzzword to describe any and all IT changes, real digital transformation means more than just migrating users from one software to another.

It’s an extended process of considering how teams use technology, identifying pain points and reflecting on solutions, as well as providing education and training to ensure businesses can unlock the potential of their new systems.

Understanding Digital Transformation

Digital transformation involves leveraging modern technologies, such as cloud computing, artificial intelligence (AI), big data, and intelligent automation, to improve business processes, enhance customer experiences, and add value.

These new technologies enable the completion of long, complex tasks almost instantly, thereby increasing productivity and reducing errors. Digitalizing also improves monitoring and data collection, allowing businesses to see how employees and customers use their services so they can continue to meet expectations and compliance goals.

But digitally transforming a business doesn’t just mean tasking employees with moving from old systems to new ones. It begins with an analysis of how the organization works, and where it struggles.

This involves surveying existing workflows to find gaps and identifying solutions that can be tailored to meet an organization’s specific needs. This ensures that the transition to new technology is as seamless and impactful as possible. Beyond the initial switch, a well-managed transformation will be iterative, adjusting based on user feedback to maximize impact.

To digitally transform, organizations must embrace a growth mindset, ready to experiment and adapt. Once they do, they can truly reap the benefits that frontier technology has to offer.

Benefits of Digital Transformation

Digital transformation can dramatically improve every aspect of an organization. The most common growth areas for businesses include:

Increased Efficiency and Automation

Technology has advanced rapidly. The most up-to-date solutions on the market have the capacity to execute intricate tasks that legacy systems cannot, and they work accurately, consistently, and quickly.

In particular, intelligent hyperautomation solutions combine robotic process automation (RPA) with machine learning (ML) to boost operations, moving beyond digitizing simple tasks to providing truly end-to-end support, learning from itself, and facilitating data collection.

Integrating these solutions into business workflows can yield significant gains in productivity, allowing employees to focus on tasks that add value without being overwhelmed by paperwork.

Improved Customer Experience

Customers use frontier technology in every aspect of their lives. As a result, they have come to expect—and demand—a totally intuitive, intelligent, omnichannel digital experience when interacting with businesses.

AI-powered Digital CX solutions that can be tailored to businesses across various sectors have become particularly popular. Across the board, they reduce customer wait times, enable enhanced CX channel unification, and create seamless design, all while optimizing cost with automation.

The process begins by mapping typical customer journeys to identify common issues and inefficiencies, and then proceeds to a personalized system. After creating solutions, the final stage is careful implementation and change management so that businesses can harness the full power of digital.

Enhanced Data-Driven Decision Making

Collecting, processing, and storing business information, whether it’s customer behaviors, operational characteristics, or sales analytics, is tedious and often ineffective.

However, if deployed correctly, data can be an organization’s greatest asset: intelligent processing can provide access to real-time analytics, allowing team members to know exactly how their business is performing at any time.

More information means enhanced decision-making:

Unsure whether a new marketing strategy is working? Check website impressions.
Hesitant about changing a product offering? Deploy an A/B test and analyze customer reactions in granular detail.

Well-managed digital transformations incorporate intelligent data collection so that organizations can benefit from the information they generate. This breaks down silos and eliminates manual involvement to mitigate risk and make access as quick as possible. As well as making it easy to use, it gives data a voice through advanced analytics.

Intelligent processing ensures that information is reliable, safely stored, and completely intuitive, allowing businesses to learn from — not struggle with — it. Upgrading data processing also helps businesses stay abreast of the most up-to-date compliance regulations.

Greater Agility and Innovation

Digital transformation is all about modernizing by abandoning manual processes that slow change down and embracing the future. With flexible cloud-based systems and agile workflows, businesses can quickly adapt to changing market conditions, test new ideas, and bring products or services to market faster.

Digital transformation solutions are designed to bring organizations to the forefront of their sectors through technological excellence. All platforms, from cloud engineering to digital operations and connected intelligence, make businesses leaner, more scalable, and more agile.

Real-World Examples of Digital Transformation

To stay competitive, digital transformation has been a strategic necessity for companies across sectors. Tailored solutions can help solve even the most complex industry-specific challenges in a range of fields.

Healthcare

Healthcare is particularly data-dense – and much of that information is sensitive: the complexity of its data, along with the urgency with which tasks must take place, makes digital transformation especially important.

Healthcare players face a range of industry-specific problems, such as issues with Electronic Health Records (EHRs), claims management, unintuitive customer experience, and inadequate adherence with regulations.

Intelligent technological solutions can eliminate these problems. Existing systems include:

End-to-end claims management, from data entry, to validation, adjudication, and payment processing, ensuring accurate processing of insurance claims while reducing administrative burden.
Healthcare Information Management that unifies disparate record-keeping systems and supports the archival of records taken on legacy platforms.
AI-enabled support platforms for patients and employees to speed up care.

Financial Services

The financial services industry is being revolutionized by neobanks that have gained popularity due to their digital-first approach. To keep pace, traditional players must rethink their operations.

Typical challenges within the sector involve issues with collections, CX, and cloud engineering. In response, a range of technologies that tackle these issues have been created:

Compliance solutions that leverage the power of intelligent automation to turn piecemeal, variegated bank statements into an instantly legible financial story.
Transformed CX platforms that allow customers to move from branch to app to contact center while receiving the same level of service, thanks to services that track information provided to eliminate repetition and inefficiency.
Intelligent collections solutions that empower customers to digitally self-cure, avoiding difficult conversations and keeping their relationship alive with their bank while saving the bank money on collecting costs and ensuring debts are recovered.

Retail

Direct-to-consumer retail brands are focused on providing unique and exciting customer journeys in order to maximize sales. In the digital age, this means using technological solutions to personalize effectively.

Solutions that are particularly relevant for the retail sector center around enhancing the customer journey through personalization and seamlessness, increasing data collection through automation . This usually involves systems such as:

A comprehensive returns management solution to facilitate the difficult ‘reverse logistics’ of online retail.
Seller management systems to provide greater control over the individuals selling company goods.
Cloud modernization practices to keep the business functioning as efficiently as possible.

Manufacturing

Digital transformation can help the manufacturing sector increase productivity, reduce waste, and respond faster to market demands.

Common issues include acquiring customers, managing digital operations, and moving from legacy systems to new ones. There are a range of digital solutions available to remedy these problems, such as:

Customer acquisition, onboarding, and service platforms that provide end-to-end support and information, guided by real-time analytics.
Digital operations solutions that improve productivity in every aspect of the business, from HR to service contract management and finance processing.
Application migration support to move from legacy platforms to new systems at speed.

Common Challenges with Digital Transformation

Digital transformation can be hugely positive for businesses if implemented correctly. But not all transformations are created equal. If organizations don’t adequately plan modernization efforts, they may encounter certain issues, including:

Incomplete acceptance of new systems: employees may be unwilling to start using new systems in place of old ones, opting to continue with previous procedures and mitigating the efficacy of the innovation.
Increased errors: Poorly trained employees may not fully understand new software, and make more mistakes or take more time than usual to complete tasks, making the switch counter-productive.
Lost functionality: A digital transformation that does not take into account exactly how technology is used across every section of a business can cause a loss of functionality, as new software may work differently from original systems, creating confusion and slowing the organization down.

It is crucial for businesses to plan their digital transformation and think carefully about how exactly they want to benefit from new technology.

Start Your Digital Transformation Journey Today

Thinking creatively about how organizations use technology can usher in a new era of tangible business outcomes, bringing huge productivity, satisfaction, and financial gains.

Sutherland has 35+ years of experience in helping businesses achieve real digital transformation. Examples of our solutions include:

Robility® : A hyperautomation tool for end-to-end business process automation at scale, leading to a 52% decrease in handling time and huge cost savings.
SmartLeap® HelpTree: An AI-enabled CX solution to assist agents in providing customer support, providing a 19% increase in productivity.
SmartHealthConnect and SmartHealthAnalytics: A digital reporting tool for healthcare enterprises to produce real-time analytics and ad-hoc reports independently, without needing to contact IT teams.

Interested in discovering how digital transformation can give your business a strategic advantage? Contact a Sutherland expert today.