Digital transformation is a common buzzword lately, but do you know what it really means? And, more importantly, do you know what digital transformation would look like at your business? 

In this article, we’ll discuss the concept of digital transformation, key ways it can impact your business and your customers, examples of it in practice, and the building blocks you’ll need to put it into place.

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Understanding digital transformation

Digital transformation refers to the integration of digital technologies into all areas of a business in a way that fundamentally changes how an organization operates and delivers value to customers. That’s a fussy way of saying digital transformation is using digital technology in a way that truly transforms your day-to-day business practices, improves your customers’ experience, and increases your ROI. 

Digital transformation goes far beyond simply adopting new technologies; it requires a mindset shift that embraces innovation and agility. We’re not talking about ad-hoc digitization, like purchasing a new piece of software occasionally. We’re talking about a company that transforms its business using digital solutions. 

Digital transformation has become a necessity rather than a luxury. In fact, Flexera reports that digital transformation is a top priority for 74% of businesses. It has the potential to revolutionize industries, disrupt traditional business models, and create new opportunities for growth and success.

The role of digital transformation in today’s business landscape

First things first, how does digital transformation give companies a competitive advantage and help them deliver exceptional customer experiences? Put simply, digital transformation gives businesses a strong competitive advantage and elevates the customer experience. Let’s explore those two elements in depth. 

The competitive advantage

Companies that leverage technology are better positioned to outperform their competitors because they can more effectively streamline processes, reduce costs, and respond quickly to market changes. Businesses that fully incorporate technology into their processes can also use information from data analytics to flag any important patterns, trends, and customer preferences. This means they’ll stay ahead of competitors, despite the constantly evolving business landscape, by identifying new business opportunities that may have otherwise gone unnoticed.

We’ve seen this firsthand in the case of automation, both through the experiences of our customers and our own experience at Wrike. Automating repetitive tasks and repeatable workflows with advanced technology lets organizations free up time to focus on more strategic and value-added activities. 

Automating tasks in Wrike

This not only increases productivity but also allows team members to develop new skills and contribute more effectively to the organization’s growth. On the content team at Wrike, we’ve automated our approval process so selecting a new status notifies the approver and eliminates an entire time-consuming email thread. In fact, without Wrike’s powerful automation, our team would be slower and less agile. 

But don’t take it from us — we recently spotlighted one of our customers, a manufacturing company, that was able to cut project implementation time by 83%

The customer experience

On the customer side, expectations are continuously evolving and digital transformation is essential for meeting them. Used effectively, digital technologies can enable companies to provide more personalized and seamless experiences across multiple channels such as chatbots, social media, and email, which all support and engage the customer in real time. This combination of instant accessibility and responsiveness contributes to a positive customer experience and helps foster long-term relationships.

Let’s take a retail setting, for example. E-commerce platforms that offer user-friendly interfaces and personalized recommendations are more likely to attract and retain customers. By analyzing customer data, companies can understand customer preferences and tailor their offerings accordingly. 

What digital transformation encompasses

Digital transformation has evolved considerably over the last few decades. Initially, it focused on automating manual processes and digitizing paper-based records. But oh, how far we’ve come! Digital transformation has now evolved to encompass a broader scope, including the use of advanced technologies such as machine learning and internet of things (IoT) devices.

Machine learning, a subset of artificial intelligence (AI), has revolutionized the way businesses analyze and interpret data by training algorithms on large datasets. These algorithms help businesses uncover hidden patterns, make accurate predictions, and gain valuable insights that enable more informed decisions, optimize processes, and personalize customer experiences. 

IoT devices, such as sensors and smart devices, allow businesses to collect real-time data from a range of sources. This data can then be used to monitor and control processes, improve efficiency, and enhance customer experiences. In the manufacturing industry, for example, IoT devices can be used to track inventory levels, monitor equipment performance, and optimize production processes. 

IoT devices can also streamline processes to save employees time and enhance security. At Wrike, we can use smartphones or smart watches as part of a multistep security process, saving time typing in passwords multiple times a day. 

The growing presence of digital transformation in various areas such as healthcare, finance, retail, and transportation suggests that it has the potential to continue to transform businesses in a myriad of industries.

Key components of digital transformation

Successful digital transformation relies on two essential components: technology and the people who use it.


Technology obviously forms the backbone of digital transformation initiatives. It includes software, hardware, and infrastructure that support digital innovation. Cloud computing, big data analytics, AI, and IoT are all examples of technologies currently driving digital transformation.

  • Cloud computing enables organizations to access and store vast amounts of data securely, allowing for seamless collaboration and improved efficiency.
  • Big data analytics tools empower businesses to extract valuable insights from the immense volume of data they collect, leading to more informed decision making and personalized customer experiences.
  • AI automates processes, enhances productivity, and enables predictive analytics. With AI-powered chatbots and virtual assistants, companies can provide round-the-clock customer support and deliver tailored recommendations to their users.
  • IoT technology connects devices and objects, allowing them to collect and exchange data. This technology has transformed various sectors, such as healthcare, manufacturing, and transportation, via real-time monitoring, predictive maintenance, and improved operational efficiency.

People and culture 

However, without the people who use the technology, there really can’t be a digital transformation. Implementing digital transformation really requires a cultural shift within an organization. Leadership members need to create a culture of innovation, collaboration, and continuous learning to set the foundation for a successful digital transformation. In addition, employees need to be equipped with the necessary digital skills and empowered to embrace change.

Here are a few of the building blocks companies can put in place to set the stage for digital transformation: 

  • Create a culture of innovation. This typically involves encouraging employees to think creatively, experiment with new ideas, and take calculated risks. It requires a supportive environment where failure is seen as an opportunity for learning and growth.
  • Eliminate silos to promote cross-functional teamwork. Collaboration requires breaking down communication barriers and promoting cross-functional teamwork to achieve the seamless integration of technology and business processes. When different departments work together toward a common goal, organizations can achieve greater efficiency and effectiveness in their digital initiatives.
  • Invest in continuous learning. Organizations must invest in upskilling and reskilling their workforce to keep up with the latest trends and advancements. This means providing training programs, workshops, and resources that enable the staff to acquire new digital skills and stay relevant in their roles.
  • Empowering employees to embrace agility and adaptability. Preparing employees to thrive despite change can help organizations overcome resistance and drive innovation. This calls for effective communication, transparent decision-making processes, and involving employees in the transformation journey.

Measuring the impact of digital transformation

Once a company understands the technology and culture required for full digital transformation, it’s important to consider how to measure their impacts to determine effectiveness and ensure a return on investment. Let’s explore two approaches to measuring its impact: quantitative measures and qualitative benefits.

Quantitative measures

Quantitative measures involve analyzing key performance indicators (KPIs) to assess the impact of digital transformation. These include metrics such as revenue growth, cost savings, customer acquisition and retention rates, and operational efficiency improvements. 

  • Revenue growth occurs when implementing digital strategies expands the customer base and increases sales.
    • For example, a retail company that adopts an e-commerce platform can reach a wider audience and generate more sales, leading to a significant increase in revenue.
  • Cost savings are achieved by streamlining processes, automating tasks, and reducing manual labor. 
    • For example, a manufacturing company that implements digital technologies to optimize its supply chain can reduce inventory costs, minimize waste, and improve overall operational efficiency, resulting in substantial cost savings.
  • Customer acquisition and retention rates are improved by leveraging digital channels and technologies.
    • For example, a financial institution that offers a user-friendly mobile banking app can attract tech-savvy customers and enhance customer loyalty, leading to improved acquisition and retention rates.
  • Operational efficiency improvements happen by digitizing processes, eliminating bottlenecks, and improving collaboration.
    • For example, a logistics company that implements a real-time tracking system can optimize delivery routes, reduce delivery times, and improve overall operational performance, resulting in significant efficiency improvements.

Wrike is a valuable asset to companies in measuring KPIs, thanks to our customizable reporting features. With Wrike, you can get a detailed overview of productivity at an individual, team, and department level instantly, and schedule and share in-depth reports with teams, executives, or clients. 

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Qualitative benefits

Quantitative measures provide valuable insights, but it’s also important to consider the qualitative benefits of digital transformation, which include improved customer satisfaction, increased employee productivity and satisfaction, enhanced brand reputation, and the ability to adapt quickly to market changes. These qualitative benefits all contribute to long-term business success.

  • Improved customer satisfaction happens by offering personalized experiences, seamless interactions, and convenient services through digital channels.
    • For example, an airline that provides a user-friendly mobile app with features like online check-in, real-time flight updates, and personalized offers can significantly improve the overall travel experience, leading to higher customer satisfaction.
  • Increased employee productivity and satisfaction occur when you provide employees with digital tools, automation, and training.
    • For example, a healthcare organization that implements electronic health records and telemedicine solutions can streamline administrative tasks, reduce paperwork, and enable healthcare professionals to focus more on patient care. This results in increased productivity and job satisfaction.
  • Enhanced brand reputation is achieved by embracing digital technologies and delivering innovative solutions.
    • For example, a technology company that develops cutting-edge software solutions can build a strong brand reputation for innovation and reliability, attracting more customers and partners.
  • The ability to adapt quickly to market changes is boosted by leveraging digital capabilities.
    • For example, a retail company that uses data analytics to track consumer preferences and adjust its product offerings accordingly can adapt to changing market demands, ensuring continued business success.

Overcoming challenges in digital transformation

Implementing digital transformation isn’t always without challenges. In fact, without thorough research and pre-planned change management, your digital transformation could be a disaster. From employee resistance to security and privacy issues, here are a couple of common challenges and possible solutions.

Addressing resistance to change

One of the major challenges in digital transformation is resistance to change. A recent KPMG report explained, “Workforce and culture issues represented the top hurdles for transformation progress, specifically: collaboration breakdowns, skills gaps, and risk-averse cultures.” 

Employees may be resistant due to fear of job displacement or unfamiliarity with new technologies. When was the last time you were asked to use a different technology in your own work? Even for younger employees, things like using a work management platform instead of emails and spreadsheets can take some adjusting. 

To address this, organizations should provide comprehensive training and establish a culture that encourages innovation and embraces change. Clear communication and involvement of employees in the transformation journey are also crucial. 

Having in-house champions for implementing the technology is a great way to overcome reluctance. At Wrike, we encourage our customers’ companies to train Wrike Champions, employees who know the ins and outs of the platform and can answer questions from new users anytime — and we’ve seen it work wonders for change management! (If you’re interested in learning more, we have a blog series that focuses on Wrike customers bringing change to their organizations using our platform.) 

Ensuring data security and privacy

With increased reliance on digital technologies comes the increased risk of data breaches and privacy concerns. Companies must prioritize data security by implementing robust cybersecurity measures, educating employees about data protection practices, and complying with relevant regulations. Safeguarding sensitive customer information and making data privacy a priority will build trust with customers.

Accelerate your digital transformation with Wrike

There’s not another work management platform on the market more suited to supporting digital transformation than Wrike. With Wrike, you can create individual folders for each digital initiative, serving as a central hub for all relevant information and updates. You can easily set up regular reports to generate data about the digital initiatives you’re implementing. And you can automate repeatable work with intuitive formulas to save your entire team time — and supercharge your digital transformation. 

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But Wrike’s capabilities go beyond just managing digital transformation. Our comprehensive tools are designed to organize your workflows, boost collaboration, and drive productivity. From real-time communication to intuitive task management features, Wrike provides everything you need to successfully navigate your digital transformation journey.

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Ready to leverage the power of digital transformation and drive your business success? There’s no better time to start than now. Get started with Wrike for free today.

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Note: This article was created with the assistance of an AI engine. It has been reviewed and revised by our team of experts to ensure accuracy and quality.