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ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/uedp20

WHAT IS DIGITAL TRANSFORMATION?

David Tang

To cite this article: David Tang (2021) WHAT IS DIGITAL TRANSFORMATION?, EDPACS, 64:1,
9-13, DOI: 10.1080/07366981.2020.1847813

To link to this article: https://doi.org/10.1080/07366981.2020.1847813

Published online: 03 Jun 2021.

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 THE EDP AUDIT,

EDPACS CONTROL, AND SECURITY

NEWSLETTER

2021 VOL. 64, NO. 1

WHAT IS DIGITAL
TRANSFORMATION?
DAVID TANG

Abstract. Digital Transformation is a type of Business Transformation that is

driven by emerging technologies. The potential for top line growth and bottom line
savings of a Digital Transformation Program exceeds that of other types of
Transformation initiatives. At its core, Digital Transformation is driven by the
tangible shift in the role of the technology within an organization. No longer as
purely a support function that enables business processes, technology is now
capable of much more. Technology now allows for new, innovative business
models (e.g. XaaS), drives sales growth, and can even be a source of
Competitive Advantage. There are numerous emerging technology trends that
drive Digital Transformation. Notable ones include Social Media, Mobility,
Internet of Things (IoT), Cybersecurity, Big Data & Analytics, Cloud Computing,
Robotic Process Automation (RPA), Artificial Intelligence (namely Machine
Learning), Blockchain, and so forth. The applicability of technology is largely
dependent on the industry and organization. With these technology trends,
businesses are armed with the capability to fully digitize, transform, and grow
their organizations. These technologies, in fact, mobilize 8 levers to Digital
Transformation–spanning both Growth (business drivers) and Operational
Improvement (business enablers).

Organizations across all industries are undertaking “Digital

Transformation” projects. But, what exactly is it? And, are they
doing it right?
At its core, Digital Transformation is driven by the tangible IN THIS ISSUE
shift in the role of the technology within an organization. No
n WHAT IS DIGITAL
longer as purely a support function that enables business pro­ TRANSFORMATION?
cesses, technology is now capable of much more. Technology
now allows for new, innovative business models (e.g., XaaS),
drives sales growth, and can even be a source of Competitive
Advantage.
Editor
There are numerous emerging technology trends that drive DAN SWANSON
Digital Transformation. Notable ones include Social Media,
Mobility, Internet of Things (IoT), Cybersecurity, Big Data & Editor Emeritus
BELDEN MENKUS, CISA
Analytics, Cloud Computing, Robotic Process Automation (RPA),
Artificial Intelligence (namely Machine Learning), Blockchain,

CELEBRATING OVER 4 DECADES OF PUBLICATION!

E D P A C S 2021

and so forth. The applicability of technology is largely dependent

on the industry and organization.
With these technology trends, businesses are armed with the
capability to fully digitize, transform, and grow their organiza­
tions. These technologies, in fact, mobilize 8 levers to Digital
Transformation—spanning both Growth (business drivers) and
Operational Improvement (business enablers). These 8 levers
are listed and depicted below; and are at the core of Flevy’s
approach to Digital Transformation Strategy.
Let’s take a deeper look into the 4 levers that drive growth for
the organization.

DEMAND GENERATION
Emerging technologies, particularly Social Media (and Social
Media Marketing), are facilitating Demand Generation by building
awareness and brand interest. With an increasing number of
customer touch points and ability to collect and unify customer
data across these various touch points, we are better able to
understand our customers and their interests—leading towards
customer “micro-segmentation.”
Likewise, advertising platforms (as they, too, are collecting
more and more customer data) also allow for more targeted ads.
You can reach consumers by demographics, behavior, location,
interests, and so forth.

SEARCH & SELECTION

We can now be where customers can easily find us—and likewise,
can easily find customers wherever they may be. This has been
largely made possible through Mobile and Internet technologies.
This includes across channels (online and offline), across
devices (e.g., PC, mobile), and across platforms (e.g., website,
search, email, social). GPS and location-based services allow us
to find customers based on where they are and where they have
been.

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2021 E D P A C S

CUSTOMER EXPERIENCE (CX)

Prior to the Internet era, customers had limited interactions with
a company—e.g., retail salesman, telephone customer service.
With emerging technologies—namely, Social Media, Mobility,
Internet of Things—the number of customer touch points has
increased dramatically. This is both an increase in number of
ways for the customer to reach company and an increase to the
number of people within a company to reach the customer.
Companies now have the ability to constantly engage with the
customer.
Thus, Customer Experience has grown in increasing impor­
tance. Immediate growth opportunities tends to come through
Customer Experiences and relationships that adapt to their
dynamics and demands.
In fact, of the growth drivers, Customer Experience (CX) is the
most impactful and at the core of Digital Transformation-driven
growth. Refer to these best practice frameworks on CX for more
on the topic. Typically, Customer Experience Strategy is a focal
point within any Digital Transformation Program.
Customer Experience has evolved from a traditional linear pro­
cess (with few touch points) to a continuous, circular process (with
constant touch points). This change in Customer Experience is so
significant that many top management consulting firms have devel­
oped their own frameworks addressing this behavioral and opera­
tional change, such as McKinsey’s Customer Decision Journey and
Accenture’s Nonstop Customer Experience Model.
Today’s Customer Journey and Purchase Process is dynamic,
accessible, and continuous, because the digital touch points consu­
mers are exposed to are always on and customers can constantly
re-evaluate their purchase options. Enabled by technology, custo­
mers expect to easily control and vary their routes within and
across channels to suit their needs at any given moment.
Customers now expect their experiences to be continuous, con­
stant, customized, and cross-channel.
The key, then, is for us to deliver a continuous Customer
Experience via an integrated Omnichannel Strategy. Otherwise,
in today’s “switching economy,” a customer may quickly look for
a different provider that does provide the continuous experience
she desires.

CUSTOMER PURCHASE PROCESS

As highlighted above, with the evolution of Customer Experience,
so has the Customer Purchase Process evolved. Customers can
now be reached via:
● New and optimized products and services
● New and optimized channels
● New pricing models
Likewise, existing channels, services, and products can also be
improved and better leveraged.
As we can better target customers and tailor our offerings, custo­
mer profitability (or revenue per customer) is a metric that should

ª Copyright 2021 Taylor & Francis—All rights reserved. 11

E D P A C S 2021

see considerable improvement. Technology also shortens product

development cycles and reduces the time to market for offerings.
For a more in-depth discussion on the 4 growth drivers to
Digital Transformation, as well as the 4 levers to operational
improvement, take a look at our Digital Transformation Strategy
methodology document available on Flevy. In addition to discuss­
ing the levers to Digital Transformation Strategy, this document
also provides a framework for Digital Transformation Execution.
We lay out key phases and functional layers. Furthermore, we
provide a framework for Digital Maturity—i.e. know where you
stand and how to gradually improve/mature across the areas of
Customer Experience, Operations, and Information/Technology.
If your organization already has a Digital Transformation
Strategy underway, we also recommend you familiarize yourself
with the 4 business ecosystems critical to a successful Digital
Transformation Program. These ecosystems are:
● Customer Solutions Ecosystem
● Operations Ecosystem
● Technology Ecosystem
● People Ecosystem
Studies have shown organizations that have excelled in Digital
Transformation (i.e. “Digital Leaders”) distinguish themselves
through their mastery of the 4 critical business ecosystems.
More information on the Digital Transformation: Integrated
Business Ecosystems methodology can be found here.

READING LIST
● Where and How Does Digital Transformation Actually Create
Value? https://flevy.com/blog/where-and-how-does-digital-
transformation-actually-create-value/
● It’s the Age of Data, Time to Incorporate a Data Monetization
Strategy into Digital Transformation https://flevy.com/blog/
its-the-age-of-data-time-to-incorporate-a-data-monetization-
strategy-into-digital-transformation/
● How to Redesign Your Operating Model for the Digital Age
https://flevy.com/blog/how-to-redesign-your-operating-model-
for-the-digital-age/
● Build the Foundation to Digital Transformation through Big
Data Enablement https://flevy.com/blog/build-the-foundation
-to-digital-transformation-through-big-data-enablement/
● What Digital Operating Model Should We Adopt? https://
flevy.com/blog/what-digital-operating-model-should-we-adopt/
● By Now, We All Know of RPA. But, What Is IPA (Intelligent
Process Automation)? https://flevy.com/blog/by-now-we-all-
know-of-rpa-but-what-is-ipa-intelligent-process-automation/
● The Omni-channel Retail Strategy for the Digital Age
https://flevy.com/blog/the-omni-channel-retail-strategy-for-
the-digital-age/

David Tang is the founder of Flevy, the online marketplace for business best
practices. Flevy represents the largest library of best practice business

12 ª Copyright 2021 Taylor & Francis—All rights reserved.

2021 E D P A C S

documents available online—with over 5,000+ documents (including frame­

works & methodologies, presentation templates, financial models, and more),
spanning over 350+ management topics. Prior to Flevy, David worked as
a management consultant for 8 years. His consulting experience spans cor­
porate strategy, marketing, operations, change management, and IT; both
domestic and international (EMEA + APAC). Industries served include Media
& Entertainment, Telecommunications, Consumer Products/Retail, High-
Tech, Life Sciences, and Business Services.

ª Copyright 2021 Taylor & Francis—All rights reserved. 13