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What Is “Digital Transformation”?

As businesses continually develop new methods for operating within an ever-evolving landscape, many are looking to what is known as the “Digital Transformation” to simplify business practices and create more value for employees and customers.  The “Digital Transformation” aims to modify existing traditional business practices to make processes and tasks cheaper and more efficient for everyone – giving leaders more time to focus on business innovations and propel growth in the market.

March 01, 2023

It’s important to understand what digital transformation means for business. Simplifying how a company operates using new 21st century practices can help your business gain the visibility, flexibility and control you need to stay at the forefront of a constantly changing market. 1 EDI Source, the number one leader of Electronic Data Interchange software, can help answer the complex question, “What is Digital Transformation?” and help you put new ideas and strategies into practice with EDI software integration. Keep reading to learn more.

Digital Transformation Definition

While there is no concrete digital transformation definition, you can think of it as the process of integrating new digital technologies to create or modify business processes, business culture and customer experience to cope with the new digital age in business. Digital transformation is essentially a reimagining of business within the digital age.

The digital transformation process can transcend traditional roles within a company, such as sales, customer service and marketing, to reinvent how your company thinks about and engages with customers.

The rise of the digital age has brought a shift from paper processes to digital technology for business management. Digital transformation initiatives are changing business processes and improving both the internal and external customer experience. Digital transformation also demands cross-departmental collaboration, breaking down the silos that exist in many organizations.

This digital transformation journey can apply to businesses of any size or age. Older companies must move away from how things were done in the past, while new companies have a chance to start their business practices with digital transformation in mind.

Digitization vs. Digitalization vs. Digital Transformation

To understand what digital transformation means for your business and how to put it into practice, you first must realize how the business landscape evolved from pencil and paper to digital technologies.

Digitization: From Analog to Digital

Traditionally, all businesses kept their records on paper and used traditional stationery for their important management documents. No matter what you wanted to share or find, you had to search through physical papers to find it. When computers hit the mainstream, many businesses began converting their physical documents to digital computer files in the process known as digitization – converting data or information from analog format to digital.

While this process made finding and sharing information much more accessible, how businesses utilized their digital records remained stagnant and unchanged from the old analog methods. Digitization was the first step in the long process towards digital transformation.

Digitalization: Using Digital Data to Simplify Your Work

The next leap into the digital transformation came from the process of digitalization – using digitized data to make established work more straightforward and more efficient. Digitalization did nothing for changing how companies did business, and it did not aid in creating new types of businesses. Digitalization was more about improving upon the old systems since companies could store documents more efficiently.

As businesses began to rely more heavily on digital technology, people started looking for new ways to use it for business rather than improve the speed of the old methods. It was at this time that the digital transformation process began to take full shape. New technologies – and new applications for them – were suddenly possible.

Digital Transformation: Transforming Business Through Digital Data

The digital transformation came into full effect when businesses began to look into new processes that could add value to every customer interaction, change the way business gets done and, in some cases, create an entirely new type of business. In this age of digital transformation, businesses are reinventing every step of their procedures to create something new – from internal systems to online and in-person customer interactions.

Digital transformation initiatives must touch every part of a business. One form of technology that has benefited companies in the digital transformation process is EDI software.

How to Make the Digital Transformation With EDI

To facilitate a successful digital transformation, your business must be supportive of change and have the capabilities to evaluate its most significant needs and daily challenges. EDI software makes it possible for your team to adapt to the changing digital landscape and set up your business for continued success. To build a digital transformation plan, companies must focus on four key areas – technology, data, method and organizational structure.

  • Technology: The key to understanding how to solve challenges that might be preventing your business from driving change is accepting new technologies – the entire reason behind the digital transformation. EDI software can help improve information quality and efficiency at clearly measurable rates.
  • Method: A well-defined transformation strategy is essential for creating a process that can allow your business to focus on improving operational efficiency and engaging customer experiences.
  • Data: Tracking and measuring data is the best way to evaluate your company’s numbers to communicate what improvements are needed in the digital transformation process. By integrating EDI into your system, you can increase your data visibility without spending more money.
  • Organizational Structure: For a business to prosper from the digital transformation, there must be a balance between understanding the necessity of advancing technology and the pace at which that technology advances. Bringing about change too quickly can damage a company in the long run, so keeping a proper structure in place can aid immensely in what digital transformation means for your business.