Your go-to resource for acronyms, jargons, terminology, and useful words for product and customer experience teams.


Digital Transformation

What is Digital Transformation?

Digital transformation can be defined as the act of improving business processes with digital technologies to make them more efficient, accessible, and scalable.

Digital transformation is an epidemic that has been taking over businesses of all shapes and sizes. This transformation primarily consists of changes in how digital technologies are used to improve, change or replace existing business processes. The goal is to provide a better customer experience by leveraging digital technology to interact with businesses and their products in a more efficient way. In other words, businesses want to use digital tools to make it easier for customers to do business with them. We’ve seen this transition happen gradually over the past few decades, with some businesses lagging behind while others are still in the early stages.

To be clear, digital transformation is not just making small, gradual improvements as new technologies become available. Instead, it’s about changing how things are done entirely, facilitated by new methodologies and the digital technologies that make them possible.

Why is Digital Transformation Important?

Digital transformation offers businesses a chance to revamp the way their customers do business, learn, shop, and live. This is a huge opportunity for businesses to take advantage of and there are many methods that can be used to achieve digital transformation. Most companies will need to seek out external help to complete a digital transformation as it can be difficult to do independently. Consultants, service providers, and products can assist with long-standing practices and migrating them to a digital environment.

After a company has decided to go through with a digital transformation, they will then invest money into these projects, which in turn creates potential revenue for the transformation and SaaS solutions that support the new digital workflow.

What are the Benefits and Pitfalls?

Digital transformation can help businesses to achieve amazing levels of productivity, and grow at a faster rate than ever before. With each new technological advance, businesses can automate repetitive, manual processes, and free up time and resources for growth, creativity, and innovation. In data-rich environments, digital transformation can also unlock entirely new opportunities that were not possible before.

Nevertheless, change is troublesome for many people and organizations, who would rather stick to known processes and technologies. When change does happen, there is often a learning curve involved that some people are unwilling or unable to master. This is where change management strategies come into play.

However, there is also the risk of implementing a digital transformation simply for the sake of doing so without truly improving a process or adding additional value.

Despite the potential for amazing ROI and efficiency, some companies may not want to take on the cost of transformation. These changes can be difficult and often lead to unhappy customers who were used to the old way of doing things. Unfortunately, more often than not, these projects fail rather than succeed. This just goes to show how tough it can be to implement a major change to long-standing processes.

There is also the risk of implementing a digital transformation simply for the sake of ticking a box without truly understanding how it will improve a process or add additional value. And there is also a cost some may be unwilling to take on, despite promises of great returns on investment and potential efficiencies to be had.

Transformations can also be rocky, with problems and hiccups creating unhappy customers who didn’t experience any of these issues when they were doing things “the old way.” However, it’s important to understand that more of these projects succeed than fail – so don’t be discouraged!

Successful transformations require significant changes in thinking, and the full support of company executives to drive company-wide buy-in. Transformations don’t occur in backrooms and dark corners but as a concerted effort with high visibility and broad awareness.

How Can Product Managers Leverage Digital Transformation?

There are two types of opportunities where product teams can leverage digital transformation; identifying internal processes ripe for a change and spotting market opportunities where digital transformation can create an opening for products and services.

For internal use cases, product managers can identify tools, solutions, and methods to create a more efficient product management organization. This might involve collecting and synthesizing feedback, communication and collaboration tools, or systems for managing requirements and planning roadmaps.

For external use cases, product managers can spot market opportunities where digital transformation can create an opening for new products and services. This might involve developing new business models, identifying customer needs that are not being met, or creating new channels to reach customers.

But the far greater opportunity is identifying opportunities to serve a target market by leveraging digital transformation to solve customer problems and create efficiencies. Conducting customer research is the key to locating and quantifying digital transformation opportunities. As problem-solving outsiders, product managers can glean from interviews and surveys what customer pain points exist and devise digital solutions to mitigate them. If these solutions are compelling enough and have a decent ROI for customers, a new market opportunity exists.

With digital transformation, the landscape of customer communication changes, too. Customers are no longer okay with only one-way communication or a toll-free number to call when they have a problem. Instead, they want a constant dialogue that includes useful information and responsive product improvements from the companies they rely on.