What Is Digital Transformation?

By Mitesh Shah

Published on November 4, 2022

Computer monitor with different bar and pie graphs demonstating digital transformation as a pixelated person looks through the monitor in an office setting.

In business, data-based goals tend to be very tangible. Perhaps you want to boost your ROI or CAGR, or reduce the time your analysts spend accessing and leveraging data.

Yet other goals seem a little aspirational and harder to quantify, but that doesn’t mean they’re not measurable — or achievable. But first you need to define them.

In this blog we’ll describe digital transformation: how it can be achieved as well as how it can benefit your business.

What does it mean to undergo a digital transformation?

At its core, digital transformation is simply incorporating digital technology into one’s business. This can mean different things to different people. To some, it might mean moving from paper-and-pen based accounting to general ledger software. To others, it could mean migrating data to the cloud.

Why do companies consider a digital transformation?

Because the kinds of digital transformation that organisations seek will vary, the reasons will, too. These can include:

  • Customer Engagement: By improving the customer experience and increasing engagement

  • Competition: By keeping pace with the market, launching new products, or expanding into new territories

  • Adapt to change: By reacting to macro-level events such as COVID 19

  • Cost savings: By moving to a cloud computing model, for example, companies can shrink operating costs and scale the business

  • Employee benefits: By empowering people to work from home

Although any company can consider a digital transformation, their reason for doing so will depend heavily on business goals and respective industry. Examples include:

  • Insurance: Competitive pressures from Insuretech providers mean more traditional insurance companies need to compete through better personalization and faster service.

  • Banking: The use of digital wallets and increase of cashless transactions increase the data demand on financial institutions.

  • Healthcare: AI and machine learning power faster and more accurate diagnoses.

What are the benefits of digital transformation?

The benefits of digital transformation are similarly not universal and are going to vary by the scale of the transformation and the company’s goals. There are business level benefits, which will be things such as improving the customer experience, leveraging the technology to beat competition, and financial benefits like moving to a cloud computing model. Additionally, there are employee level benefits, which are factors such as improved lifestyle and retaining talent for longer periods of time.

What are the challenges of achieving digital transformation?

The main catalyst of implementing digital transformation — new technology — can also be the greatest challenge. The initial hurdle is having the budget to purchase this technology, whether it’s software, a platform, or an upgrade to the company’s infrastructure, but your workforce will likely require training, or you’ll need to hire additional employees who have the necessary experience and skills. There may also be disruptions during the transition that occurs before a digital transformation is achieved.

Additionally, a digital transformation may present cultural challenges, especially if there is resistance to change from employees or management.

How should a company plan their digital transformation?

It’s important to have specific goals; “digital transformation” can mean many things. Even a goal such as “We want to move to the cloud” might be too vague. Clarifying that goal further by saying, “We want to move to the cloud so we can apply more innovative technologies around machine learning to better serve our customers,” is more measurable and informed, and provides a better rationale for other stakeholders or those responsible for approving your budget.

One way to plan your digital transformation is by following these three steps:

  1. Identify the specific challenges you are facing. For example, you might want to compete with companies using technology to provide an enhanced customer experience.

  2. Create policies to overcome these challenges.

  3. Plan the actions you’ll need to meet these challenges, whether it’s new software, technology upgrades, training, or other resources.

How can Alation support companies with their digital transformation?

As discussed above, there are many kinds of digital transformation, but they all have one thing in common: data. Insights derived from trusted, accessible data will lead to informed decisions that improve operations both internally (business processes) and externally (customer service, relevance, and experience).

Alation combines machine learning and human collaboration to change the way people find, understand, trust, use and reuse data. By leading the evolution of the data catalog to become a platform for data intelligence, Alation provides the vital context to data:

  • Who is using the data?

  • What data is being used?

  • Where the data came from?

Brands that have achieved digital transformation with the Alation Data Catalog include:

  • Very.co.uk, an online retail company with roots dating back to the 19th century, uses the data catalog and its data governance capabilities to create comprehensive views in real time of its customers throughout their shopping journey.

  • Finnair, Finland’s largest air carrier, leverages Alation Data Catalog in building a data culture around data literacy and data accessibility; on the platform, data leaders have found new ways to innovate by having access to data sets that were previously unconnected.

  • Salesforce created a cohesive data culture using Alation Data Catalog — a core asset in its analytics, security, and compliance initiatives — to empower more people to make data-driven decisions.

How the Data Catalog Supports a Key Digital Transformation Use Case:

When moving to the cloud, you can’t simply lift and shift because not all of your data needs to be moved. You are going to have legacy data that isn’t being used anymore, you are going to have bad data, and you are going to have old data that doesn’t meet regulations in Europe like GDPR and should just be deleted.

It’s better to surgically, and methodically, move the data you have from one environment to the other. Alation plays a key role in facilitating that process.

To launch a digital transformation at your organisation, learn more about Alation Data Catalog or sign up for a demo today.

1.Based on advice from Richard P. Rumelt ‘Good Strategy Bad Strategy: The Difference and Why It Matters’.

  • What does it mean to undergo a digital transformation?
  • Why do companies consider a digital transformation?
  • What are the benefits of digital transformation?
  • What are the challenges of achieving digital transformation?
  • How should a company plan their digital transformation?
  • How can Alation support companies with their digital transformation?
  • How the Data Catalog Supports a Key Digital Transformation Use Case:
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