Digital transformation, also known as ‘business transformation, is an ongoing journey that business leaders and companies undertake to convert non-digital operations, such as products, services, or processes from all areas of their business and integrate them using digital technology. Ultimately, this transforms how businesses operate and deliver value and gives them a competitive advantage.
Digital transformation is all about taking processes that used to be done on paper and making them digital. Companies are jumping on board with this change to refresh how they do things.
By going digital, companies can become more efficient to respond to customer’s needs and wants. Digital transformation also has the power to reshape business models, and company culture, and drive innovation and fundamental changes beyond just technology and deliver more value to customers.
Read the 3rd edition State of IT Report with insights and trends from over 4,000 IT leaders worldwide.
What are the benefits of digital transformation?
Digitalisation is the automated process of using digitised information to simplify and improve established ways of working. It isn’t about changing how you do business or creating new types of businesses.
It’s about working faster and better now that your data is instantly accessible and not trapped in a file cabinet. Measuring the return on investment and maximising business value through ongoing evaluation of digital transformation strategies is crucial to ensure the success of these efforts.
1. Adds value to every customer interaction
Digital transformation is changing how business gets done and, in some cases, creating entirely new classes of businesses. Companies are revisiting everything they do. From internal systems to customer interactions, both online and in person. They’re asking important questions like:
“Can we change our processes to enable better decision-making, greater efficiencies, or a more personalised customer experience?”
In the digital age, businesses are finding innovative ways to leverage technology. A prime example is Netflix.
Originally a mail-order service, Netflix disrupted the brick-and-mortar video rental industry. Digital innovations enabled wide-scale streaming, allowing Netflix to compete with traditional broadcast and cable networks by offering a growing library of on-demand content at competitive prices. This effectively created a new industry of on-demand videos and TV shows.
That’s the true power of digital transformation: it can completely change the landscape, disrupt competition, and create new businesses and demand, ultimately adding greater value to every customer interaction.
2. Simplifies business processes and improves efficiency
The process of using digitised information to simplify and enhance established ways of working is called digitalisation. Note the word established. Digitalisation isn’t about changing how you do business or creating new types of businesses. It’s about improving efficiency now that your data is instantly accessible instead of trapped in a dusty file cabinet.
Consider customer service, whether in retail, field operations, or call centres. Digitalisation transformed service by making customer records easily retrievable via computer.
While the fundamental methodology of customer service remained the same, the process of handling inquiries became much more efficient when searching through paper ledgers, which was replaced by entering a few keystrokes on a computer or mobile device.
As digital technology evolved, people began to explore new ways to use technology in business — not just to perform old tasks faster. This is when the idea of digital transformation began to take shape. Suddenly, with new technologies, new ways of doing things became possible.
3. Makes data more accessible and easier to share
Not so long ago, businesses kept records on paper, whether handwritten in ledgers or typed into documents. If you wanted to gather or share information, you dealt with physical documents and legacy systems like — papers, binders, Xeroxes, and faxes.
Then computers became mainstream, and most businesses converted those analog records into digital files. This process is called digitisation: converting information from analog to digital.
Finding and sharing information became much easier with digitisation, but businesses often used their new digital records to mimic old analog methods.
Computer operating systems were even designed around icons of file folders to feel familiar to new users. While digital data was exponentially more efficient than analog, business systems and processes remained largely rooted in analog-era ideas about managing information.
4. Enhances customer service experiences by providing more connection options for customers
Digital transformations have reshaped how companies approach customer service. The old model involved waiting for customers to find you, whether in person or by calling an 800 number. The rise of social media has changed this dynamic, allowing progressive companies to meet customers on their preferred platforms.
While improving call centres and in-store service desks with digital technology is beneficial, true transformation occurs when businesses leverage all available technologies to enhance customer experiences. Social media has become an additional channel for better customer service, exemplifying this digital transformation.
Digital transformation encourages businesses to rethink traditional concepts of teams and departments. This doesn’t mean service reps must run marketing campaigns, but it can involve breaking down barriers between departments. By integrating service and marketing on social media, businesses can capture customer information, create personalised journeys, and efficiently route queries to service agents.
How to digitally transform your business?
A successful digital transformation is a complete business transformation. It’s crucial to keep this in mind if you’re seriously considering transforming your business. It’s not just about updating IT systems and apps. It’s a cultural shift and a way to reimagine all of your company’s processes and create better ways of doing things.
Small businesses can leverage a digital transformation mindset to build digital-first into their company culture.
Step 1: Assess your business data and processes
Remember that just as digital transformations are about business first and digital second. Problems with your business data may be signals to look more closely at how your company is doing business generally.
Laurie McCabe, Co-Founder and Partner at SMB Group, said it well: “In fact, it’s usually situations like these that make you realise you don’t have great visibility into your own business data or, even worse, have lost touch with what your customers want and need.”
Step 2: Identify gaps, problems, and areas for improvement
Start by conducting an internal assessment to pinpoint gaps, problems, and areas of difficulty. Here are some questions to consider:
- What’s your biggest problem?
- What’s the key to your survival?
- What technology changes are my competitors making?
- What could our business do better?
For very small or new businesses, the answers may be simple, such as needing more customers or implementing basic systems. Involve everyone in your company from the start, as your digital transformation will impact them all over time.
Even if the current path seems clear, remember that you’re building for the future. Your business will grow, whether that means more employees, increased revenue, or both. Flexibility should be part of your strategy so you can adapt as your business evolves.
Connecting with a Salesforce MVP online or in person can be an excellent way to help you create a small business digital transformation strategy.
Step 3: Get key stakeholders involved in the process
When leading a digital transformation, remember to be collaborative. If you have ten employees, all ten will be affected by the changes. Involve them early and seek their input.
This will not only ensure better buy-in but also lead to stronger outcomes. Digital transformation impacts daily workflows and is designed to empower employees. So why not make them a part of the process from the beginning?
That’s why implementing change management is critical, as it helps key stakeholders adapt and adjust to the new workflows and transformation initiatives smoothly.
Step 4: Choose the right technology tools
Technology integration is key. It’s perhaps the number one area SMBs should be investing in.
One of the biggest, easiest-to-make mistakes businesses make is investing in many different technologies that don’t integrate.
SMBs need to stay focused on getting the capabilities they need now in a way that will scale as their businesses grow. Today’s business ecosystems and platforms make it easy for vendors and developers to build apps tailored to help SMBs grow.
Adopting a scalable platform like Salesforce will help ensure that the processes and information in your company can flow as easily as possible. That’s the foundation upon which everything else can be built.
Here are some tools to consider that integrate well and can help digitally transform your business:
- Salesforce CRM: Manage customer relationships effortlessly.
- Salesforce Marketing Cloud: Automate marketing and personalise messages.
- Salesforce Service Cloud: Simplify support requests for better customer service.
- Slack: Enhance team communication and collaboration.
Test the technology with a small group first to ensure it meets your needs, and get your team’s thoughts and conduct a needs-met analysis to find out if your team’s needs were met or exceeded.
Step 5: Build bridges to connect your data, employees, and customers
You don’t need to scrap everything and start over when beginning a digital transformation, even if you’re transitioning from a snarl of apps that don’t talk to each other.
In fact, the most effective solution is to bridge data silos and pull all information into a central space — rather than completely starting over.
The second part of the process is to unify your data, with the aim of creating a single, unified view of the customer. Once you’ve built bridges between fragmented information, you’ll be able to surface useful insights into customer behaviour and maximise the potential of new AI technologies like AI agents, generative AI, and robotic process automation (RBA).
Step 6: Consider outside help in mapping out a digital transformation strategy
Working with consultants, partners, and tech vendors can be great for SMBs because they have the depth of experience and knowledge to help you figure out the best paths to success.
Experienced partners have likely helped other companies in similar situations and so can help you find the most direct paths to meaningful transformation. A great place to look for consulting partners is the consultant’s directory on the Salesforce AppExchange.
Many small business leaders hear the word “consultant” and instinctively flinch while reaching a hand to guard their wallets. Don’t assume that getting help is always too expensive — that’s simply not true.
Many large companies offer free advice or trainings for SMBs, like Salesforce Trailhead. Beyond free offerings, there are all sorts of ways to get advice without spending a lot.
Why are businesses going through digital transformations?
As digital technology advances and plays a larger role in our daily lives, businesses must keep up. The fundamental principle is simple: keep up, remain competitive with your digital transformation efforts, or fall behind.
Any change in business starts with customers. Customer satisfaction is key to success. Modern customer expectations are driven by digital technology innovations. The always-connected customer constantly sees new possibilities. When they discover new options, they want them from you, too.
If you can’t offer what they seek, they’ll find someone else who can. The digitally connected world makes it easier than ever for customers to compare brands and switch with minimal effort.
1. Digital innovation shapes business across all industries
Digital transformation impacts every industry. Whether your business generates revenue through client services, digital media, or physical goods, technological innovations can transform your means of production, distribution, and customer service.
Depending on your business, your customer could be a consumer or a business-to-business (B2B) client. Let’s extend our perspective to also include your employees.
As we’ll talk about in a moment, employee expectations are being driven by their own consumer experiences, particularly when it comes to digital innovation in the workplace.
2. Customers expect digital technology and innovation
Today’s customers are connected and empowered by the digital era. They’re connected 24/7 and increasingly want and expect the same around-the-clock access to the companies they do business with.
Over half of customers surveyed for Salesforce’s report “State of the Connected Customer” (first edition) said that technology has significantly changed their expectations of how companies should interact with them.
Salesforce’s research also reports that 57% of consumers said it’s absolutely critical or very important for companies they purchase from to be innovative.
Otherwise, they might just look for new companies to buy from: 70% of respondents said new technologies have made it easier for them to take their business elsewhere.
3. Employee empowerment drives digital solutions
The Apple iPhone is a key driver in the adoption of consumer technology in the workplace. Although it wasn’t originally marketed to businesses, it quickly gained popularity.
This prompted corporate IT departments to accommodate employees wanting to use iPhones instead of other devices. As a few major employers embraced the iPhone, its acceptance in the enterprise spread rapidly.
The iPhone disrupted the traditional approach to technology adoption in the workplace. Rather than IT leaders dictating which approved devices to use, employee demand for iPhones led IT departments to adapt. This trend continues today, with more consumer-grade technologies entering the workplace.
4. Digital-first employees are connected employees
Today, we live in a digital workplace. Millennials and Gen Z are strong proponents of the digital-first mentality. Having grown up with PCs, consumer electronics, and phone apps, both generations expect powerful, easy-to-use digital tools in the workplace, just as they do in their personal lives.
Digital transformations apply this mindset to empower employees. Just as consumers seek businesses that connect with them 24/7 via social media and other digital channels, today’s workforce thrives in environments that facilitate collaboration, access to information, and flexibility in how and where they work. Digitalisation is a powerful ally in this empowerment.
For small businesses, embracing digitalisation can be game-changing. It’s key to meeting customer expectations and empowering employee experiences while helping them do more with less.
The efficiencies gained from going digital, such as having a comprehensive shared database, leveraging customer data for personalised messaging, and enabling mobile connectivity — allow small teams to focus more on winning and retaining customers.
5. Digital innovations are transforming industries
Employees aren’t the only ones benefiting from easy, always-on access to information in the workplace; machines are getting smarter, too.
Emerging technologies like artificial intelligence (AI) and machine learning, the Internet of Things (IoT), cloud analytics, and various sensors are transforming manufacturing, production, research, and virtually all facets of business across industries. The examples are never-ending.
Digital innovations like AI and the IoT are driving all manner of advancements in the production of everything from consumer goods to cars and trucks.
- Optimised manufacturing processes adapt to changing consumer demand.
- Cloud-based software affords real-time visibility into supply chain logistics.
- Customer experience mapping powered by machine learning surfaces key insights to help product planners, marketers, and budget makers do their jobs better.
Together, these and many other innovations are changing the way we do business from every conceivable angle.
Examples of digital transformation
What does digital transformation look like in practice, and how has it already changed how we do business? Let’s look at examples of digital innovations in marketing, sales, and service that build closer customer relationships and empower employees across all industries.
Examples of digital transformation in marketing
At a high level, the goal of digital transformation in marketing is to find more customers while spending less money. More specifically, digital marketing generates more quality leads and helps you get closer to all of your customers.
The shift from analog to digital marketing materials helps these efforts in two key ways. First, digital materials are generally cheaper to produce and distribute than analog media. Second, digital marketing opens the door to marketing automation, analytics tracking, and dialogue with customers in ways that analog never could.
Instead of planning a one-size-fits-all trip down the funnel, marketers can build 1-to-1 journeys that observe customer behaviours and shape the experience to best suit each buyer.
Digital transformation helps marketers connect with individual customers. Let’s look at some examples that detail how digitally transforming your messaging strategy can increase customer engagement and reduce costs.
| Traditional Marketing Channel | Digital Marketing Channel | Transformational Impact |
|---|---|---|
| Print materials | Digital materials | Reduce cost of print and distribution; ability to score/grade prospects based on digital interactions. |
| Print mail campaigns | Email campaigns | Reduce cost of print and postage; greater scale and personalisation. |
| Print/billboard advertising | Social media advertising | Personalised targeting; lookalike audience targeting. |
| Brick-and-mortar storefront | Website/ecommerce site | Eliminate rent/utilities, accessibility and scale, and opportunity to nurture prospects at scale. |
| Loyalty club card | Mobile app | Reduce signup friction; reduce the cost of printing cards; ability to personalise promotions and trigger offers in real-time; and the opportunity to push offers and messaging out to customers. |
Examples of digital transformation in sales
The traditional marketing and sales roles are being redefined in the digital age. It’s all about the data.
The ability to collect precise data on consumer behaviour allows marketing and sales teams to work in ways never before possible. The natural bond between marketing and sales becomes evident by studying consumer behaviour from the first touchpoint through the buying journey. Nurturing that bond leads to better collaboration.
Data makes every sales rep productive.
Salespeople benefit from access to better data. When marketing and sales teams share information across a CRM and sales reps keep their pipelines updated allows for information to flow freely.
More eyes on the same information create opportunities to share intelligence across the business. Someone from marketing ops might see a sales rep’s note about a prospect and share marketing campaign activities that help move the deal along.
Second, as information gathers, you can leverage digital innovations like artificial intelligence.
Digital transformation creates AI-driven sales techniques.
AI systems can comb through data to find useful patterns and insights. They study sales and marketing data from the end-consumer standpoint and determine the effectiveness of sales techniques. AI can identify which demographics are more likely to buy at certain times of the year.
With more datasets available, AI can mine marketplace information and your sales history. The systems look for correlations and patterns to give your teams a competitive edge. Combining AI insights with the knowledge of your teams realises digital transformation for sales.
Social selling strategies are a key component of digital transformations.
Consumer participation in social media has changed the buying process, so successful digital transformation must incorporate a social selling strategy. This medium offers opportunities for salespeople to connect and build relationships with prospects and longtime customers.
Examples of digital transformation in service
Customer service, and our ideas around where service begins and ends, are being upended by the digital era as much as any other part of business. Maybe more so.
With everything from pizza delivery to child care available at their fingertips, customers expect more companies and industries to embrace digital as their primary means of doing business. For service departments, that means greater expectations for 24/7 problem-solving on the customer’s channel of choice and greater opportunities to delight buyers and win more business.
Social media is the new customer service desk.
Listening and responding to customers across social media channels sounds daunting. However, tools for social customer service make it easy to highlight customer needs and measure brand sentiment.
Meeting your customers where they are is key to winning business. A digital transformation mindset can turn service calls into opportunities to grow your brand.
Collaboration is essential. The Salesforce “State of the Connected Customer” report shows that 84% of high-performing marketing leaders say that service collaborates with marketing on social inquiries, while just 37% of underperformers do. When information is freed from silos, teams collaborate more, and businesses perform better.
Self-service is a service agent’s best friend.
Remember when customer service meant calling a toll-free number for product questions or warranty claims? While call centres still exist, the digital age offers more flexibility for serving customers.
Self-service portals are a great example. These tools provide features like password reset, incident logging, service requests, and knowledge base searches. They can also include interactive services like chat, and social media feeds relevant to service issues.
User-friendly designs, such as suggestion fields and personalised profiles based on purchase and service histories, improve the customer experience. A good self-service portal can reduce demands on service agents. According to our research, customers value self-service: 59% of consumers and 71% of business buyers say it impacts their loyalty.
AI plays a key role in transforming service.
AI-powered chatbots can answer simple inquiries, reducing wait times for customers. They also free up personnel for more complex cases. When queries exceed a chatbot’s capabilities, natural language processing helps direct questions to the best expert.
Examples of digital transformation in banking
Banking has been transformed by digital technologies, benefiting many consumers. Not long ago, most transactions were handled in person by bank tellers.
Automated teller machines (ATMs) streamlined transactions, extended business hours, and reduced wait times for cash withdrawals. Over time, ATM technology evolved to support cash and check deposits, more secure transactions, and multiple accounts, including credit cards and mortgages.
Recently, PCs and mobile devices have led to online and mobile banking, as well as cashless payment systems. Consumers now conduct more banking online, including paying bills and sending funds.
Mobile banking apps allow users to deposit checks remotely, and payment systems like PayPal and Apple Pay enable consumers to make purchases with accounts linked to their phones, without cash or cards.
Examples of digital transformation in retail
Retail has been radically transformed in the digital era, impacting both the in-store experience and ushering in e-commerce.
Digital technologies have improved the retail experience for consumers and proprietors and enabled digital transformations such as loyalty cards, e-coupons, automated inventory, and retail analytics systems.
Shoppers now show their phones at checkout for discounts, with digital systems tracking consumer behaviour and triggering personalised events like emails and SMS messages. Digital beacons can further enhance the in-store experience by linking to mobile apps to alert shoppers upon entering the store.
Retailers are experimenting with subscription-style sales using Internet of Things technology. For example, Amazon has Dash Buttons, which are IoT-enabled devices that trigger automated reordering of household items. Just click the button when running low, and a refill will be dispatched to your Amazon Prime account.
Examples of digital transformation in insurance
The impact of digital transformation in the insurance industry is driven by changing consumer expectations. Web and app-based self-service portals allow consumers to compare shops, enroll in coverage, use multiple agents and carriers, and file claims without needing to speak to an agent, saving time and money.
A notable aspect of digital transformation in insurance is the role of the Internet of Things (IoT). Inexpensive IoT-enabled sensors provide insurers with valuable data for forecasting and claim reviews.
For example, in car insurance, in-vehicle sensors monitor driving habits and reward safe driving. Sensors connected to phones can deter texting while driving by disabling messaging apps, and connecting vehicles to wearable devices that measure blood alcohol content could help prevent drunk driving by temporarily disabling the engine.
What are some signs that a business needs a digital transformation?
Signs that your business is in need of a digital transformation can appear across different parts of your organisation. They may not scream, “It’s time to go digital!” or “Why aren’t you on Instagram?” Instead, they could manifest as a diverse set of business problems.
If one or more of the items on our checklist rings true, it might be time to think seriously about developing a digital transformation strategy.
1. Repeat business isn’t what it used to be
Customers not returning isn’t necessarily a sign of poor products or services; it could be due to competitors’ promotions, lack of follow-up, or other reasons. A digital transformation for your messaging strategy could reveal why repeats are dwindling.
2. Promotions are no longer generating leads
Are you measuring their impact? It’s hard to pinpoint the effectiveness of print campaigns, and last year’s digital strategies may no longer work. If your promotions aren’t effective, consider a new approach to marketing.
3. Cross-departmental complaints are rising due to a lack of collaboration and information sharing
The idea that sales and marketing don’t get along is outdated. Collaboration is essential, and making data accessible across departments is key.
4. Your technology feels old, and your employees want features they’re used to from consumer apps
Spreadsheets shouldn’t be your only tool. Modern business apps that integrate for data sharing and offer user-friendly experiences across devices are essential. If your current technology lacks these features, it may be time to explore better options.
Summing up
Digital transformation is a business transformation. It’s a transformation that’s being driven by the basic desire to make work better for everyone, from employees to customers. That’s why embracing digital transformation should be a key part of every business strategy.
The drivers we just walked through are some of the biggest reasons behind the massive changes rippling through the business world right now. Add to that, the need every business has to compete for and win customers.
If your competitors are leveraging digital transformation to streamline production, expand distribution, build a better workplace for employees, and improve customer satisfaction, you’d better up your game, too.
Ready to transform your business with Salesforce Customer 360? Discover how a unified view of your customers can drive digital transformation.
