What is digital transformation?

There’s a reason people talk about the “speed of business.” Any company — from the most established enterprise brands to early-stage startups — has to use every tool at its disposal to stand out in a crowded marketplace and get an edge on the competition.

Fortunately, we live in an age of unprecedented digital innovation. Businesses can pick from a never-ending stream of new technologies that promise to improve their business processes. Artificial intelligence (AI) and machine learning have changed the face of technology forever, replacing costly manual processes with cheap and efficient automation.

But affecting real digital transformation means more than picking the right apps and algorithms — and transformation efforts are not without their challenges.

Most obviously, the global pandemic has fundamentally changed the business landscape. Prior to the pandemic, a lot of companies weren't really thinking about digital transformation in a meaningful way. But in a post-COVID landscape of remote teams, distributed systems, and increased competition for talent and resources, everybody is talking about digital transformation.

Practically overnight, companies had to adapt their business model to work in a world where consumer behaviors were totally transformed. We are reimagining what it means to do business effectively. Increasingly, this means finding new ways to take advantage of a company’s most valuable asset: its data.

Digital transformation definition

Ultimately, what is digital transformation? Digital transformation can describe a wide array of initiatives and processes. It could be something as small as upgrading a single system to more modern digital technologies, or something as vast as migrating a company’s entire infrastructure to the cloud. At the highest level, digital transformation refers to all the ways companies implement technology to streamline their business.

But culture is also an important component of digital transformation. One of the less-discussed — but equally important — aspects of digital transformation is cultivating a culture of curiosity. When the people appreciate the magnitude of the challenge ahead of them, they will independently investigate new ways to leverage technology and data to the advantage of the business.

Digital transformation examples

Another term for digital transformation is digitization: taking existing data or workflows and applying digital technology to make them more effective and efficient. The first stage is replacing physical processes with technology — for example, replacing ledger books with Excel was an early stage of digital transformation. The next step is implementing simple automation to make manual processes more efficient — for example, applying robotic processes to Excel spreadsheets. After that, digital transformation becomes a matter of continually optimizing your business workflows.

Digital transformation is not a single initiative owned by a single department or group of stakeholders. Every part of the business can — and does — benefit from digital transformation. Here are a few common examples of digital transformation initiatives:

Cloud migration

Now more than ever, with so many companies adapting to remote workers and distributed workforce, migration to the cloud is a top priority for almost every business. Cloud computing provides access to technologies on the bleeding edge that simply aren’t available as on-premises solutions.

To take advantage of the cloud, start by identifying your high value systems: Where does the most important data live? What do you rely on for business decision making? Consolidate that data in the cloud, using fully managed technologies to make it safely and securely available to the stakeholders who need it most.

Operational efficiency

Since the rise of the digital age, businesses have been using technology to improve the efficiency of as many business workflows as possible. Often, this is as simple as cutting down complex processes using multiple tools to more streamlined versions of the same process.

For example, Babilou Family, an international network of corporate daycare centers, launched an initiative to simplify the enrollment process. Using the cloud and APIs, they were able to trim a hundred pages of enrollment paperwork down to a single form.

Supply chain optimization

For the manufacturers and shipping companies responsible for getting products from point A to point B, it’s imperative to know where everything is at all times. But when you are managing a large fleet of trucks, ships, and trains, it’s hard to be 100% certain that everything is going according to plan.

For these companies, a common digital transformation initiative involves the internet of things (IoT). By adding IoT sensors to trucks, ships, and cargo containers, these organizations are better equipped to confirm current locations and map expected behavior against the reality on the ground.

Product development

Bringing new products to market is an enormous logistical challenge — particularly in the highly competitive, heavily regulated healthcare field.

A Talend customer recently launched a digital transformation initiative that would literally change lives. By making trustworthy data available to more systems and more users, they were able to streamline their production processes and increase vaccine manufacturing volume output by 15%.

Customer experience

One of the most common digital transformation projects is a strategy for building a 360-degree view of the customer in order to meet and exceed customer expectations. Air France–KLM, one of the largest global airlines, were collecting customer data from a variety of sources: including trip searches, bookings, and flight operations as well as web, social media, call center, and airport lounge interactions.

With this wealth of data, they needed was a strategy to make that data useful and accessible for their customer service programs. Talend’s metadata management capabilities made it possible to improve the governance of data and empower data stewards to keep the data clean while ensuring their customers’ privacy. With faster access to clean customer data, Air France–KLM is now able to provide its customers with unique, customized experiences.

Artificial intelligence (AI) and machine learning (ML)

AI/ML give businesses the ability to aggregate data and use automation to surface insights — and issues — that are near-impossible to see otherwise. AI makes big data usable and real-time data actionable.

Digital transformation strategy

Just as there’s no single owner or application for digital transformation, there’s also no single digital transformation strategy that works universally. The journey will be different for every company, depending on their unique business models, business goals, and business strategy.

Digital transformation success inevitably relies on data and data quality, but that is only part of the larger picture. Success also depends on avoiding some common pitfalls:

1. Don’t ‘boil the ocean’

When digital transformation is driven from the top down, it’s very common that companies will try to fix everything at once. This is rarely successful, and it can sour an entire organizations’ appetite for future initiatives.

Instead, your business should decide on the highest-value projects and break them into manageable chunks.

2. One size doesn’t fit all

Businesses frequently look to their partners (and competitors) for inspiration and best practices, but you can’t take just any idea or practice and apply it directly to a completely different company.

There's probably a technology out there that will work for you, but you've got to figure out what's right for your company from the ground up.

3. Don’t let silos separate you

The modern data workforce is more comfortable than ever picking up new technologies to solve immediate problems. This gives them the power to work quickly — but it can also create data silos where solutions are disconnected, data is isolated, and collaboration begins to break down.

Department leaders should communicate openly and frequently with IT and other teams about what technology they’re using and how they’re using it.

Digital transformation roadmap

A decade ago, IT was the undisputed owner of a company’s technology. Individual users might grumble if a certain piece of software was difficult to use or didn’t quite fit their needs, but that would be the end of it. But modern business users, acclimated to smartphones and mobile devices with easy-to-get and easy-to-use mobile apps to solve almost any problem, aren’t content to sit back and wait for IT approval.

At the same time, IT leaders don’t have the bandwidth — or the patience — to micro-manage installations, maintenance, and training on all the dozens (or hundreds) of apps and platforms it takes to run modern business workflows in real time. But they do have their own requirements for compliance and control so they can protect and grow the business.

In short, the push for digital transformation is coming from two directions at once: the business users who are demanding better tools to perform their day-to-day functions, and the executive leadership and IT teams who want to keep up with increasing industry demands for security, access, and control — while still meeting reasonable expectations of a modern user experience.

With so many stakeholders presenting so many demands, it’s dangerous to embark on a digital transformation journey without a clear roadmap. But where do you begin?

Your roadmap is a collection of workflows and technology that will come together to deliver business value and positive business outcomes. Much like business transformation, successful digital transformation starts with a vision: Where do we want to be in five years?

With that answer in mind, you can start to map out the specific initiatives required to get there and to define the framework you will need to support those initiatives.

Your digital transformation framework is the specific set of resources you will need to fulfill your objectives. For example, one of your initiatives may be to give the company a clearer picture of the data at its disposal. For that, you will need a data lake to collect the data, and you will need a data catalog to index and profile that data. But it doesn't end with technology — you also need to consider the people involved. Do you want to invest in systems analysts to maintain the data, or is it better to hire data scientists who can perform complex data analytics and interpret the data?

This is where the CDO lives. Not every company has this title — yet — but almost every company needs one. If your business is still in the process of defining this role, try to identify a de facto CDO. This person will be tasked with understanding the business needs and identifying the appropriate data and strategy to address them. These needs aren't always revenue and productivity; for instance, data can be used to enhance staffing capabilities and prevent attrition. Any aspect of the business that can be addressed with data is top-of-mind for the CDO.

Benefits of digital transformation

There is a cost to digital transformation, in terms of both dollars spent on tools and technology, and hours spent on planning and implementation. But, whatever your metrics for success, these projects come with tremendous advantages:

• Agility. Things can happen fast in any industry. A business needs to be positioned to respond to threats and opportunities in real time — and that means reliable access to data. By executing data modernization initiatives before problems arise, you can identify trends early on and respond appropriately.
• Quality. Automation gives companies the ability to discover and understand their data. This includes visibility into what data exists, where and how it’s stored, where it originated, how it’s being used, if it's duplicated, and whether it exposes the company to any risk.
• Confidence. It can be disastrous to productivity and morale to have dissenting perspectives on the validity of a company’s data. In the best case, you lose valuable hours and days to disagreements over the correct course of action. In the worst case, you are taking action based on potentially flawed inputs. A preemptive initiative to establish a trusted source of data will put you on a more secure path to success.
• Profitability. From software to services to consumer packaged goods, companies are increasingly dependent on real-time data to ensure quality and supply and meet customer expectations. Old or inefficient technology can mean lost opportunities and dissatisfied customers — and that has a tangible effect on the bottom line.
• Security and compliance. Giving the right people and systems access to the right data only gets more challenging as data volumes multiply and data environments grow more complex. An organization that is unable to balance access with control runs the risk of either falling out of compliance with internal policies or preventing data users from accessing the data they need to do their jobs — and either event can be catastrophic to the business. The right digital strategy leaves the business prepared to face new and evolving regulations, while still minimizing the time and money spent on maintaining ongoing compliance.

Digital transformation solutions

Digital transformation takes many forms. It includes bottom-up initiatives to provide teams and departments with the tools they need to perform their functions efficiently and effectively. It also includes top-down initiatives to consolidate data, ensure security and compliance, break down silos, and instill a culture of curiosity.

Digital transformation can describe a massive cross-functional technology shift or adoption, or it can describe a simple migration of a single database from a server to the cloud. Talend can support any and all of those initiatives with solutions for data integration, data integrity and data governance, data trust, and more.

Start your free trial today to find out how Talend can support your business objectives.