Why Digital Transformation is More Important Today Than Ever Before

The world is watching as the rules of the markets change drastically in the COVID-19 era. Businesses are making an extra effort to adapt to the “new normal” to stay competitive. Today, it’s not only the rules but the entire battleground that is undergoing massive changes! What does digital transformation mean in this situation? Let’s look at the reasons why digital transformation is important today more than ever before!

What does Digital Transformation mean in the “new normal”

A quotation by Dr. Koenig, CEO of German’s Allianz Health has been often used to stress the importance of transformative initiatives for businesses. She said:

“It’s never over. There is always change and always more to do.”

In the past, companies have always had to deal with changes in customers’ demands. But, amid the COVID-19 pandemic crisis, the way that modern society functioned has changed – and the changes will likely be last far beyond the COVID-19 wave. While some aspects of our lives (like strict lockdowns) may end with a vaccine becoming available, other aspects such as our usage of digital technologies will endure.

The need of the hour is to re-develop an organization’s digital landscape. Companies will have to reinvent their operations through the entire lifecycle, starting from customer acquisition and operations, to post-sales service and customer service.

In the current scenario, if an organization does not transform itself digitally to meet the demands of the business landscape, its survival could be at stake. Adapting rapidly to the current situation is also necessary for the successful delivery of products and services to customers, keeping in mind the safety concerns during the pandemic.

There are many hurdles for the traditional global supply chains due to lockdown conditions in various geographies. An agile response to transforming business processes hit by the pandemic is crucial. We must first acknowledge that the new normal of the post-pandemic era is not going to be the same as the old normal.

 Defining Digital Transformation

There is consensus on the fact that more and more companies are beginning to embark on a “digital transformation journey”. But there are also observations by many technology industry experts that many of the companies that take on transformative initiatives lack an accurate understanding of the concept and the approaches to executing it successfully and the pitfalls that they need to avoid. transformation.

A senior executive from a global brand has been quoted by Harvard Business Review as saying: 

“We have a dozen committees on digital transformation, we have digital transformation initiatives, we are going full steam on digital transformation…but none can explain to me what it means.”

The concept of digital transformation is not new in itself, but a true understanding of what ultimately drives the true transformation in an organization is still largely not understood.

 Let’s look at some definitions of the term “digital transformation”:

As per Harvard Business Review, digital transformation simply means adapting an organization’s strategy and structure to capture opportunities enabled by digital technology.

Digital transformation has also been defined as the process of integrating digital technology into different areas of a business, which fundamentally changes how a business operates and delivers value to its customers.

Digital transformation looks different for different companies. It is not only an organizational and operational change but cultural change as well. It requires companies to continually challenge their old business practices to seek better solutions. The focus areas for business transformation have typically been around producing products at affordable cost and scaling operations digitally, to aid or anticipate business growth.

One of the myths about digital transformation that need to be busted is that it requires radical disruption of the value proposition. In reality, digital transformation is just a means of employing new digital tools and solutions available to better serve the customer’s needs. It could even mean doing the same operations – but just more efficiently.

While the term digital transformation is usually used in the context of businesses, it has a significant impact on other organizations as well including government organizations, public sector companies, and different organizations which are involved in tackling of challenges faced by societies like pollution. These organizations also make use of new technological solutions as per their needs to aid their process.

 Why Digital Transformation?

There could be several reasons why a business might wish to transform digitally. But the most likely reason to take the digital transformation path is that it is the need of the hour.

There has been a paradigm shift in the way customers communicate with businesses due to the rise of social media platforms and web-based solutions for sales. The world has shrunk with digitization and so have the markets! International competition has entered the same space as domestic competition. No corner of the world is too far away for business now!

Digital solutions have changed customer expectations about multi-channel availability and response time. Digital solutions are helping businesses to tailor their products, services, interactions, and communications to fit customers’ specific needs. For example, according to a study by Gartner, chatbots will power 85% of customer service by the end of 2020.

“By 2023, digital transformation spending will grow to more than 50% of all ICT investment from 36% today; the largest growth in data intelligence and analytics.”


Spending on technologies and services that help business transform digitally is forecasted to reach $2.3 trillion in 2023, according to an update to the International Data Corporation IDC Worldwide Semiannual Digital Transformation Spending Guide. Investment in digital transformation is growing at 17.5% CAGR and is expected to approach $7.4 trillion over the years 2020 to 2023.  

There are several key drivers of the growth in the adoption of digital transformation solutions. Some of them are discussed below:

1.     Enhanced customer experience

According to SAP, 92% of leaders report that they employ mature digital transformation measures and strategies to improve the overall customer experience.  70% of the leaders also reported that they have seen significant value in customer engagement and satisfaction after incorporating digital transformation in their workflow.

Customer experience is the key to a successful organization. Providing a better and unmatchable customer experience is what distinguishes successful organizations from unsuccessful ones. Digital transformation helps in increasing speed and agility in the insights generated. It provides a transformational customer experience by designing and digitizing customer journeys and developing agility in delivering journey transformations. This helps companies earn authority, trust, and respect from their customer.

 2.     Meaningful data-driven insights

The data collected by an organization is one of its most valuable assets. It must be utilized to its fullest potential.

Digital transformation employs the use of both structured as well as unstructured data to generate highly personalized and relevant insights. This also enables agility and real-time feedback.

Let’s look at a simple example to understand the importance of data-based insights. Digital methods of marketing are considered more reliable than traditional or non-digital channels as digital channels provide quantitative explanations by analyzing real-world data instead of merely giving qualitative suggestions. Using this real-world data, companies can optimize their campaigns and improve the results from marketing campaigns.

 By integrating insights based on trustable data, organizations can improve their revenue by focusing on the key areas which are crucial instead of putting efforts into areas that are not of customers’ interests. 

3.     Greater collaboration across all departments

Adapting to change is difficult for everyone. From leaders to entry-level employees, a large-scale change across all departments of the organization can be an unsettling idea! Regular, clear, and transparent communication between different departments should be encouraged. Everyone must be responsible for their little role in the transformation exercise. This will work only if each individual can see how the vision is going to help the company in the long run.

With the appropriate communication and encouragement, a sense of unity can be developed in the workforce, breaking down social divides and age gaps. Strong leadership and alignment between and within departments are keys to successful transformations. This learn-together and earn-together behaviors make digital transformation easier and vice-versa.  This is a win-win situation for stakeholders, the company as well as its employees.

4.     Improved Agility, Innovation & Digital Culture

Agility refers to the organization’s ability to improve and develop continuously. This statement holds true for digital processes as well. 68% of companies rank agility to be within the top 3 considerations when it comes to digital transformation.

The changes in the digital landscape are so rapid that organizations often find it difficult to react quickly and lose the advantage of rapid response. No matter how well-established a brand is, if there’s a cheaper and better alternative available, customers will choose it. Therefore, not just new start-ups, but established companies too must keep on improving and adapting to changes in the market. 

Lastly, stakeholders should focus on fostering an innovation mindset and working on a holistic approach to steer the organization’s culture towards digitization.


At Treehouse Technology Group (TTG), we work tirelessly with our clients, helping them to adapt quickly and thrive in this dynamic digital era. We strive to be their partner in the journey towards digital transformation. We offer transformation strategy and consultation, recommendations, and implementation services. TTG digital transformation solutions are based on a trusted foundation of experience and expertise that lowers risk and empowers clients to accelerate desired outcomes.

 Contact us for a free consultation today.

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