Digital Transformation is the process of using digital technology to change and modernize business processes and customer experience.
New technology is introduced to the market at a staggering pace. Every day the world sees innovation that we couldn’t imagine just a few years ago.
As technology progresses, so too should business management and customer interactions. New technology allows us to streamline business processes. Additionally, the buyer-to-customer experience also uplifts whenever we introduce new technology. This is what digital transformation focuses on.
This article looks at digital transformation and how software development is affected by the rise of new digital technology.
Table of contents
What is Digital Transformation?
Digital transformation is the process of altering business processes to adhere to new digital technology.
At its core, the transformation occurs when a business incorporates recently developed technology to alter business operations fundamentally. Whether changing the way work is assigned or adding new internal systems, digital transformation happens when technology alters a business.
In software development, it can take different forms. New tools can be incorporated into the development cycle to allow developers to complete their tasks remotely or help team leaders better manage the workflow.
What is the Purpose of Digital Transformation?
Digital transformation allows companies to revolutionize the way they work, which comes with many benefits. You can improve your overall efficiency and productivity, employee satisfaction, customer loyalty, and more. With digital transformation, you can improve your business in many areas.
In essence, the purpose is innovation.
That being said, digital transformation can be easier said than done. A company will need to have knowledgeable employees or hire experts to incorporate it successfully. It’s also a significant investment at times—especially if done poorly.
If a company spends the right resources, it can accomplish a digital transformation that will bring benefits to its business processes. However, without prior investment, introducing new technology can end up backfiring.
The 4 Areas of Digital Transformation
Digital transformation can change a business in different manners. Because of this, we can divide digital transformation into four different categories.
1. Business Process
When a company incorporates new technology to improve its operations or customer experience, this is a business process transformation. This type of transformation can improve efficiency and/or reduce costs.
Some examples of this are:
- Automated Tools
- Cloud Technology
- Project Management Software
- POS Systems
In recent years, one example we’ve seen is with financial institutions and banks. Many banks now offer apps that you can easily access on your phone. Because of this, the FinTech industry is booming. Currently, there are tons of apps and tools now that improve customer experience and accessibility.
2. Business Model
When new technology fundamentally changes how a company operates, this is a business model transformation.
Innovations can greatly affect how businesses operate. Going with the flow and innovating can lead to growth. On the other hand, failure to adopt new technology can lead to a downfall.
We can see this with businesses like Netflix. Although the company was founded in 1997, Netflix introduced on-demand streaming in 2007. That pivot directly led to changing how we consume media. In turn, the rise of streaming services led to the fall of movie rental businesses.
3. Domain Transformation
Technology can bring about new opportunities. When companies take advantage of technology to explore new avenues, this is an example of domain transformation.
A prime example of domain transformation is how Google started from a search engine to becoming a multimedia tech giant. However, because the internet has changed over the years, it allowed Google to tap into different markets.
4. Organizational Transformation
New technology can also bring about changes in businesses’ organizational structure and workflow. Additionally, digital transformation can bring about changes in company mindset and culture.
For instance, software companies that shift from waterfall development to agile development will shift their workflow towards decentralization. Furthermore, when incorporated into software development, this benefits both the development team and the customers.
It allows the team to divide tasks into smaller, more manageable chunks from the team side. Add to that, it allows for greater flexibility in addressing issues. On the customer side, the agile methodology gets better quality software into their hands.
Digital Transformation: Improvement Through Incorporation
Failure to innovate is a major reason some businesses fail. New technology is introduced every day, and companies need to be wary of what can affect their operations. This is especially true for software development.
As we develop new tools that can streamline the development process, we must incorporate them into the workflow. Through digital transformation, companies can stay ahead of the curve.