What is digital transformation?

Let’s explore digital transformation

Digital transformation is a well-planned strategy to overhaul an organization through information technology. The aim is most often to create new lines of business and/or new business models for existing lines of business. From sales and marketing to logistics, every part of the organization feels these changes, and sees processes improve — from product development to employee onboarding.


The technology involved in digital transformation centers on information. This means collecting, cleansing, cataloging, and storing data. It’s about governing, retrieving, analyzing, and integrating data in business processes. Digital transformation boosts efficiency and productivity, freeing employees up so they can work on higher-value tasks.


Digital transformation is sometimes driven by IT leaders, sometimes by business leaders, and sometimes by a combination of the two working together. Each of the two types of leaders has a different perspective, which we explore below.


The essential ingredients of successful digital transformation

While digital transformation may be key to success in most industries, not every company knows how to pull it off. When applied correctly, technology can improve your security and compliance posture, boost productivity, and reduce costs. When applied in the right places, a good set of tools can improve your processes, reducing cycle times and improving both employee and customer experience.


Not only is it necessary to apply technology correctly and in the right places — you also have to apply it at the right time. Those who wait too long often fall behind and fail. And those who are too quick to innovate face a different set of challenges, which could just as easily result in failure.


To stay competitive, every business needs to understand what digital transformation is and what has to be done to get it right. Let’s start with best practices for IT.  


7 ways IT drives digital transformation

When driving digital transformation, CIOs have to be effective communicators. They must be able to talk about technology in business terms — and in ways that motivate people to change. The transformative CIO gets people excited about new technology and its potential impact.


When IT drives digital transformation, it’s usually for one of the following reasons.

  1. Enhanced technology may allow the company to streamline business processes. Many CIOs are deploying technology that helps them improve data integration and sharing between systems. Some systems provide secure ways of making data accessible to everybody who needs it to do their work — members of internal teams, but also contract workers and trusted partners outside the organization.
  2. A new system extends access to mobile and/or remote users, ushering in new ways of working. Applications generally have to be altered to fit the usage patterns of mobile workers, and new security measures have to be implemented. In companies with a large mobile population, a “mobile-first” approach is often used, making the application work on a mobile device first and then adapting it to the office system, rather than the other way around. Companies may also be transformed by technology that extends access to remote workers, extending the company’s geographic reach along the way.
  3. Technology used in one part of the company may have a transformative effect if deployed to another part of the company. Take for example, software developers who have long used tools to collaborate on projects. Some companies have rolled out those same tools to make them more generally available, transforming a number of processes, including development of marketing collateral, an activity in which workflows involve content and have to be extended to people outside the company.
  4. Improved analytic tools provide better business insight and improve decision-making. New technologies in both data science and artificial intelligence make it possible to learn more from existing data, improving insights and allowing organizations to make better decisions as a result. IT leaders who stay on top of technological innovation have deployed tools that provide better analytics and decision support.
  5. Advances in data science, coupled with better data collection capabilities, make it possible to target customers with greater precision. Customer personalization depends on faster, more comprehensive access to relevant information — both information on potential customers and information on the range of available offerings. As many CIOs in financial services know, data science makes it easier to tailor services to the needs of individual customers, based on the customer’s situation as well as current market trends.
  6. New tools improve information governance processes and policies. Some IT leaders deploy the latest generation of records management tools and other technologies that help with information governance. This has especially held true in highly regulated industries, such as finance and healthcare. But now, with the growing importance of data privacy and the right to be forgotten, any company that stores any kind of personal data has to be able to delete that data — both on request from the person in question and after a certain amount of time has passed.
  7. Migration of some or all systems to the cloud creates new opportunities to improve business processes. The movement of computer systems from on-premises to cloud-based frequently involves changes to the service. New application vendors may be used, because not all vendors offer both on-premises and cloud-based services. Or if the same vendor is used, the service offered on premises is often different from what’s offered in the cloud. In either case, migration to the cloud opens up access to a new, more modern set of tools that can improve business processes.


How business leaders drive digital transformation

For business leaders driving digital transformation, they must be able to lead change and communicate a vision to superiors, peers, direct reports, and users. They must understand the impact of a new business model. At the same time, They have to be adept at working with IT managers — explaining the big picture and negotiating specific requirements from IT.


When business leaders drive digital transformation, it’s usually for one of these reasons:

  1. Technology opens new opportunities to gain a better understanding of market trends. Business leaders want better analytics and decision support systems. They want to be able to collect data from more sources and apply the latest algorithms to make accurate forecasts based on available information.
  2. Technology enables new channels and markets for lines of business. Many companies have started selling at least some of their products online. E-commerce technology and improved delivery services create new business models for product sales and make it possible to sell products and services in more places around the world.
  3. New tools make it possible to address growing customer expectations. Ever since customers have been able to browse the web to compare prices, businesses have had to find new ways of distinguishing themselves. Consequently, the level of service has risen across industries, and so have customer expectations. To keep up, companies need to respond quicker and provide products and services that are more tailored to the personal needs of a given customer.
  4. A new paradigm enables improved customer retention. A number of improvements in CRM applications have extended the range of possibilities for companies who embrace innovation. Social CRM allows companies to reach out to customers in new ways. Cloud-based CRM makes it easier for sales and marketing teams to access customer data from more locations and to integrate that data into customer-focused business processes.
  5. A new paradigm enables cost cutting. Technology, in general, streamlines business processes. Cloud computing makes it possible to avoid high upfront costs and it also makes it easier for companies to scale both up and down, depending on demand, without having to invest in expensive equipment.  


3 elements underlying successful digital transformation

Digital transformation isn’t just about technology. It’s also about people, processes, and new ways of doing business. To pull off digital transformation, all three of these elements must be present.


  1. The right vision. To develop the right vision, transformative leaders have to understand their company, their industry, relevant technology, and the regulatory environment in which their companies operate. They have to be prepared to communicate that vision through clear messages. Transformative leaders must be able to communicate with all stakeholders and guide them — before the change, during the change, and after the change. To communicate the vision across the company, transformative leaders need an excellent understanding of the company culture — and very often also the cultures of regions where the company operates. Digital transformation can only be successful if employees (and often external stakeholders including customers and partners) engage in the vision. Providing an excellent user experience is one of the best ways to engage people, whether they’re employees, partners, or customers. IT must deliver a common user experience thats relevant to the user’s context at the time, and one thats also consistent across devices and workspaces.  
  2. The right tools. Digital transformation revolves around content. In most organizations, content is spread across a number of on-premises systems, managed by different applications and stored in different databases. With so much content fragmentation, it’s virtually impossible for people to collaborate in a meaningful way. One of the first things to do is move content to the cloud, where it can be stored in a central repository, intelligently organized, and tagged for easy access. From the central repository, many of the things that are fundamental to digital transformation become much easier: workflow and collaboration, as well as information governance, security, and compliance. What’s more, data science techniques can be applied more easily to centralized data. Both statistical techniques and machine learning algorithms both work better when the data is easily retrievable. Digital transformation requires integrated systems that work off the same data and automate a company’s specific business processes.  
  3. The right timing: The timing of digital transformation should take into consideration the maturity of the technology, the rate of adoption among competitors, and the natural speed at which the company takes on change. Business and IT leaders must come together to decide not only on timing of initial steps, but also on the rate of transformation. IT leaders have to keep an eye on evolving technology; business leaders have to keep an idea on the evolving competitive landscape.


Leveraging Box for digital transformation

Today’s leading organizations, including 69% of the Fortune 500, use Box for digital transformation. Secure content management from Box gives people a user-friendly way to collaborate across teams and with their partners, vendors, and customers — and ultimately overhaul their organization’s processes. Best of all, these transformative ways of working never compromise on security, control, and compliance.


Through seamless collaboration, frictionless security, and integrations with over 1,400 applications, Box enables you to digitize core processes throughout your business, from mobile sales enablement and contract reviews in Sales, to client onboarding and engagement, to supplier procurement in Operations.


In fact, companies who leverage intelligent, collaborative work environments in their process transformation say they'll be ahead of their peers by 2024 with 30% less staff turnover, 30% more productivity, and 30% more revenue per employee.¹ By transforming these processes, you’ll see measurable benefits across your organization: exceeding customer expectations, increasing team productivity and efficiency, and reducing security and compliance risk.  

1 Collaboration Takes on New Importance as COVID-19 Pandemic Underlines Critical Need for Robust Connectivity, IDC, 26 April 2020

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