What is Digital Transformation?

Digital transformation is the latest buzzword across nearly every industry. Robotic process automation, augmented reality, virtual reality, and artificial intelligence have taken the world by storm, sending companies scrambling to get ahead of the competition.

Despite this massive focus on becoming digitally “transformed,” there is a looming ambiguous question: How do you know when you’ve finally achieved it?

In short, you can’t.

Let’s rewind for one minute. By definition, digital transformation means utilizing innovative technology to digitize and automate the functions and processes of a business with a goal of becoming more competitive and nimbler.

Again, phrases like “more competitive” and “nimbler” are still unclear, and there’s a reason for it. The truth is there are no concrete steps, or hard and fast rules, regarding digital transformation. It’s more of a mind state, a culture, an ongoing effort. There’s no true finish line where you can stop and say, “That’s it, we’ve done it!”

This is because, at its core, digital transformation is more than technology. It’s about creating a competitive advantage by shifting your thinking from reactive to proactive. Organizations need to approach their digital transformation more like a philosophy, not a business initiative with an end date. Just as the market and technology itself constantly evolve, so should your approach to making sure your business stays ahead in this technological age.

So, if there are no set rules for this initiative, what should an action plan for digital transformation entail?

Traditionally, organizations focus on two things. First, they want to automate processes with the goal of using technology to move faster. Second, they target processes that directly affect customers and end-users with the goal of driving better outcomes. But it’s misguided to think that digital transformation is ONLY suitable for these two uses.

What many fail to realize is how important it is to transform their back offices. Specifically, to automate procurement and accounts payable operations. What type of problems can this solve? Take a look at the chart below to get an idea.

There are countless problems to be solved with digital transformation. Whether you’re looking to automate due to manual data entry hang-ups, inefficiencies, discrepancies, or other difficulties, there are four distinct phases to follow that will help you accomplish what you’ve set out to do.