Catalyst Strategic Marketing: What Is Digital Transformation?

OVERVIEW

The term “digital transformation” is used all the time today, but what does it really mean?

This blog will provide you with a clear, concise definition of what digital transformation really is, so that the next time you need to explain it, you can.

WHAT IS DIGITAL TRANSFORMATION?

Digital transformation. That’s a term that is both heard and used a lot today. Consultants use it. Executives use it. Marketing, sales and many other departments within a business all use it.

But what does it really mean?

Depending on whom you ask, the term digital transformation will mean different things to different people. And if you ask 10 different people to give you a definition, you’ll likely receive 10 different answers.

And therein lies the problem…

There’s not an industry standard definition for the term, so anyone can define it to mean anything they want it to.

Hmmm…

Let’s take a step back and do some simple etymological analysis of the phrase “digital transformation” to see if that will help provide clarification.

ETYMOLOGY

The term “digital transformation” is comprised of two words, “digital” and “transformation”. It’s worth noting that this phrase has only been around since the 1960s, when computers first began making inroads into the business arena.

The word “digital” has many definitions¹, from “resembling, having to do with or being manipulated by fingers: (i.e., digits), to “being a device that can generate, record, process, receive, transmit or display information that is represented in a discrete numerical form” (i.e., digital). However, the definition that relates most closely to the topic we’re discussing is:

“Expressed in discrete numerical form, especially for use by a computer or other electronic device”

By comparison, the term “transformation” has a much more straightforward definition²:

“The act or process of transforming; the state of being transformed; change in form, appearance, nature, or character”

Putting the two words back together, when you look up the term “digital transformation”, you find the following definition³:

“The application of digital technologies to everyday life”

Okay, that makes sense. This definition may actually be the most clear, straightforward definition that can be found.

Unfortunately, in business, things are never quite as simple as they appear to be, or should be anyway. That last definition leads us down another path, as we then need to define more specifically what “digital technologies” are.

Looking up that term, we find the following definition⁴:

“An umbrella term for computer-based products and solutions”

However, given that nearly everything today is designed, developed, manufactured by or uses computers in some way, that’s a really vague definition.

A somewhat more specific definition⁵ of the term “digital technologies” is found if we search a bit further:

“The branch of scientific or engineering knowledge that deals with the creation and practical use of digital or computerized devices, methods, systems, etc.; a digital device, method, system, etc., created by using this knowledge: the application of this knowledge for practical ends, as in digital communications and social media.”

That provides a bit more specificity, so you can now extrapolate a more focused definition for the term “digital transformation”:

“The practical use of digital technology to transform the methods and systems (i.e., processes) used in our business”

That definition can then be further refined as:

"The practical application of digital technology to replace or integrate with existing business processes and procedures in order to transform, optimize and make them more effective and efficient"

Or in somewhat more concise terms:

"The process of using technology to improve business operations"

Note that in this definition, business operations includes any and all aspects of the business; it is not limited to a specific area. This is important to clarify because digital transformation has the power to positively impact all areas of business.

From sales to marketing, customer service to customer billing and all other areas of the business, digital transformation has the power to increase efficiencies, streamline processes, and improve business operations so that they work more effectively.

SUMMARY

So there it is. A definition that is: Short. Simple. Clear. Concise.

Digital transformation is simply the process of using technology to improve business operations.