What is digital transformation?

Digital transformation is the integration of long-term technology strategies to improve your business operations and deliver better value to customers. In the era of artificial intelligence (AI) and intelligent workflows, many organizations are under pressure to develop and implement initiatives to address digital acceleration. From supporting distributed teams to navigating in a high-stakes security and compliance landscape, the drive for innovation represents both a challenge and an opportunity for companies to move to more secure, collaborative, productive ways of working.

Digital transformation is essential to many companies’ success as technology advances and customer expectations grow. Having a plan to implement digital tools and workflows — and shift away from analog processes — is key to meeting the evolving demands of the market.

Digital transformation definition

Digital transformation is a process by which organizations modernize their operations by integrating digital technologies across all aspects of their operations. It involves creating new models for existing operations and moving your company away from time-consuming analog processes to lightning-fast digital ones, including automating processes where it makes sense. From sales and marketing to logistics and human resources, every part of the organization feels these changes and sees processes improve.

The technology involved in a digital transformation strategy centers on information. It includes processes related to collecting, cleansing, cataloging, and storing data. These processes allow you to better govern, retrieve, analyze, and integrate unstructured data across your business activities — boosting efficiency and freeing up employees to work on higher-value tasks.

Typically, IT and business leaders direct this change, whether working separately or in collaboration.

Discover the four types of digital transformation.

Benefits of digital business transformation

The potential of digital transformation strategies to improve your business processes makes them essential if you want to stay ahead in your industry. Adopting new technologies brings key benefits that are crucial to your future success.

• Improved customer experience: Technology transformation gives your customers more ways to connect with your company, including live chat, email, mobile apps, and social media. By making it easier for them to reach out in the way that works best for them, you improve their experience and increase brand awareness.
• More precise customer targeting: Customer personalization depends on fast, comprehensive access to relevant information. Data science provides insights into customer behavior and current market trends, helping you respond quickly and offer products and services that meet each customer’s personal needs.
• Increased competitiveness: According to McKinsey, 61% of most financially successful organizations said they were investing in infrastructure, including cloud migration and management.Implementing a digital transformation strategy can help you pull ahead of other companies that are slow to adapt to new technology.
• Enhanced productivity: Many digital tools allow you to automate key processes and keep your information updated in a central location, enabling employees to work faster. For example, project management software automates task assignments and tracks progress in real time, reducing manual work.
• Reduced labor costs: Automating processes can also help you lower the labor costs related to certain tasks so you can devote staff to more profitable work. For instance, an Intelligent Content Management (ICM) platform integrates AI to streamline document search, retrieval, and analysis, allowing team members to perform these tasks instantly.
• Data-driven decision-making: New technologies in data science and artificial intelligence make it possible to learn more from existing data, improving insights and allowing organizations to make faster decisions as a result.
• Strengthened data protection: Technology can improve your security and compliance posture with authentication, access controls, and automated threat detection and response. A proactive approach helps protect against data breaches, building customer trust and safeguarding your business reputation.

Take an in-depth look at all the benefits of digital transformation for business.

Digital transformation examples across areas and industries

Fortune Business Insights forecasts that the global digital transformation market size will grow from $2.71T in 2024 to $12.35T by 2032, with a CAGR of 20.9%. Increased investment in cloud infrastructure, the Internet of Things (IoT), and 5G are the key drivers of this expansion.

To understand the actual impact on businesses, let’s review top examples of digital transformation across departments.

And here’s an overview of digital transformation examples across different industries:

• Retail: Technology transformation empowers companies to sell their goods online, send individualized alerts to customers, better track customer behavior trends, and get more value out of purchasing and inventory systems.
• Financial services: Customers and clients can take care of their finances via online and mobile banking. People can also use enterprise apps to pay for items with their phones, whether in a retail store or online, leading to less reliance on plastic cards and cash.
• Life sciences: By using AI to analyze massive data sets, pharmaceutical companies can easily share research findings and collaborate across borders, while AI summarizes key insights from complex data, driving faster decision-making.
• Education: Digital transformation in education opens up new ways for students and educators to interact with content. While AI-driven platforms streamline content search and provide personalized learning experiences, collaboration tools support group work, improving communication and teamwork in classrooms.
• Media and entertainment: Businesses use AI for content creation, while cloud platforms allow for fast link sharing across multiple channels. Thanks to scalable storage, teams can share terabytes of videos, podcasts, and images, supporting faster content distribution to global audiences.
• Healthcare: Through telemedicine, electronic health records, and AI-powered retrieval of patient files, facilities offer more accessible and efficient care. Digital transformation in healthcare also improves communication between specialists and the protection of sensitive medical data. 

Best practices to start your digital transformation framework

While modernizing with technology is essential in most industries, not every company knows how to navigate the process. Follow these best practices to implement a successful framework and overcome the initial challenges of digital transformation in the workplace.

Align IT and business leaders for success

IT and business leaders bring different perspectives to the digital transformation process. While IT managers focus on system integration, department heads prioritize operational goals. Using these perspectives at your company can ensure your whole team gets on board and sees the benefits of transforming your business with information technology.

Empower CIOs to advocate for change

As an innovation driver, your chief information officer (CIO) must effectively communicate how digital transformation strategies benefit the IT department, highlighting advantages such as:

• Streamlined business processes: Technologies that improve cloud app integration and data exchange between systems are crucial for reducing manual work, enhancing efficiency, and ensuring seamless workflows across departments
• Mobile-first approach: Platforms that extend access to mobile and remote users introduce new ways of working and facilitate distributed workforce management
• Innovation across departments: Tools that software developers use may be useful to other departments, enhancing productivity across areas — but keep in mind that training and upskilling in digital transformation are essential to maximizing the impact of these initiatives
• Strengthened governance policies and processes: With growing concerns about data privacy, CIOs and IT leaders can leverage digital technology to establish retention policies and delete personal data upon request or after a specified period
• Business process improvements: Cloud migration opens up access to a new, more modern set of tools designed to improve business processes — for example, using digital file management to enhance storage, retrieval, and collaboration

Learn five key steps to implement digital transformation in your business.

Three elements underlying successful business transformation

Creating a business transformation framework isn’t just about adopting new technology. It’s also about engaging people, optimizing processes, and embracing new ways of doing business. To develop an effective framework for your company, ensure it includes the right vision, tools, and timing.

1. The right vision

Transformative leaders understand their company culture, industry, relevant technology, and the regulatory environment in which their companies operate in order to create the right digital vision. They’re prepared to communicate with all stakeholders and guide them — before, during, and after the changes.

But digital transformation can only be successful if employees, customers, and partners engage in the vision. Providing intuitive, user-friendly platforms is one of the best ways to ensure widespread adoption and reduce resistance to change. When platforms are easy to navigate, employees are more likely to embrace the new technology, leading to smoother transitions and quicker results.

Check out our guide to training your employees to use new technology.

2. The right tools

Digital transformation revolves around content. In most organizations, content spreads across several on-prem systems, and teams typically manage data across different applications. This fragmentation makes it nearly impossible for people to collaborate effectively.

By moving content to a unified platform, many of the fundamental steps to digital transformation — such as improving collaboration, simplifying data access, automating workflows, and strengthening security and compliance — become much easier.

AI-powered capabilities can also analyze and process data. Both machine learning algorithms and retrieval-augmented generation (RAG) make data easily retrievable. Digital transformation requires integrated platforms that work off the same data and automate a company’s specific business processes, such as customer service inquiries and report generation.

Review the top features and capabilities of cloud collaboration tools.

3. The right timing

The timing of enterprise digital transformation should consider the maturity of the technology, the rate of adoption among competitors, and the natural speed at which the company takes on change. Business and IT leaders must come together to decide the pace of transformation while keeping an eye on evolving technologies and the competitive landscape.

Explore the five pillars of digital transformation and build your roadmap for success.

Power your enterprise digital transformation with Box

Box offers a centralized platform for ICM, empowering teams to collaborate effortlessly across departments, partners, vendors, and customers. With the Intelligent Content Cloud, you unlock the value of your content by integrating advanced AI models to automate workflows and gather powerful insights from unstructured data.

Features like seamless collaboration, frictionless security, and integrations with over 1,500 applications allow you to digitize core processes by leveraging the latest technologies. Box offers cloud-native storage, governance, search, e-signature, and secure portals to consume content easily — and without any help from IT.

Let’s connect and discuss solutions for implementing your digital transformation initiatives.

While we maintain our steadfast commitment to offering products and services with best-in-class privacy, security, and compliance, the information provided in this blog post is not intended to constitute legal advice. We strongly encourage prospective and current customers to perform their own due diligence when assessing compliance with applicable laws.