Technology is no longer simply a functional role in business. Today, technology serves as the foundation for almost every process, task, and decision that happens. With the evolution of AI, this shift has moved even more quickly. In a March 2025 survey by McKinsey, 78% of respondents said their organization uses AI in at least one business function, an increase from 72% in early 2024 and from 55% in early 2023.
When a company creates a new product, technology is at the core of invention, design, development, and uses. Then the organization uses technology to market, price, and sell the products and services. As products evolve, industry organizations use technology to create standards, regulations, and approaches. On a broader level, society depends on technology for most daily tasks, and their culture, mindset, and habits influence what products people adopt.
With this profound shift in the role of technology in both society and business, especially the increased use of AI, organizations are transforming how they use digital technology to run every aspect of their business. Businesses that do not move to a digital-first approach are likely to quickly fall behind competitors that are embracing digital technologies.
What Is Digital Transformation?
Digital transformation is the process whereby a company moves from manual processes to using technology in all areas of their business to improve operations and customer value. The process involves all aspects of the company, including culture, technology, structure, and finance.
For example, instead of human call centers being the first line of assistance, organizations can use AI-based chatbots to help customers find information and receive answers to common questions. By reducing hold times and increasing call center productivity through this process, businesses improve the customer experience.
Benefits of digital transformation include:
A genuine competitive advantage
Optimized business processes
An increase in the value of the company’s products or services
Product differentiation in the market
Strategies for Digital Transformation
How does an average company deal with or even drive digital transformation in their industry? The challenge is that no digital transformation is the same. Each company must transform its own processes to meet its goals and serve its customers, which are unique to every company.
Here are eight concrete steps to guide your company through the process of designing your own digital transformation journey:
1. Start with the business problems.
Organizations often approach digital transformation with the technology they want to use, such as AI. However, many companies get so caught up in the latest and greatest in tech that they forget the goals and solutions on which their business is based.
The business needs to start by finding and focusing on a single problem to solve. Then use technology to measure and track key metrics, streamline processes, enhance offerings, serve more customers, or whatever needs to be done. The goal is to deliver a solution in the simplest, fastest way possible. Start by interviewing leaders in all business units to find solvable business problems that are causing a negative impact.
2. Make incremental changes.
Manoj Balraj, co-founder and president of Experion Technologies, shared in a 2025 Forbes article how he watched leaders perceive digital transformation as an all-or-nothing gamble, which elevates the risk factor. Instead, he recommends a strategic, incremental approach, which lowers risks and increases impact.
“As a leader, the first step you should take is to speak to the stakeholders and identify their key challenges and pain points. You should ask what’s working, what isn’t, and what obstacles are slowing down revenue growth or overall progress,” wrote Balraj.
“Understanding their aspirational product vision, strategy, goals, and initiatives is also essential.”
Review the list of business problems and rank each in terms of impact to the company. Then look for a project to start that is relatively self-contained but which is causing financial issues, employee frustration, or customer dissatisfaction. Next, build a team with stakeholders to begin addressing and solving the issue using technology. For example, if customers are manually filling out a form then move to a digital form and use AI-based automation to route it to the correct employee based on the contents of the form.
3. Take a smart approach to IT.
The foundation of digital transformation is the infrastructure needed to power the technology and processes. Throughout the transformation process, businesses need the ability to build cloud-native applications and move/manage them and data across different IT infrastructures to solve the business problem.
Organizations are increasingly moving to an IT approach that ensures the right strategy and IT infrastructure to manage enterprise AI. Because hybrid multi-cloud provides the ability to quickly and easily embrace new technologies, many organizations are moving in this direction. Conduct an IT audit of your current infrastructure, and then determine what is needed to complete the digital transformation projects on the horizon.
“Strong infrastructure, particularly a hybrid-cloud approach, provides flexibility and scalability businesses need to support digital transformation. It allows companies to manage workloads efficiently, ensure data security, and adapt to changing demands without overhauling their entire IT ecosystem,” says David Boice, CEO and co-founder of Team Velocity, a B2B automotive tech company. “By leveraging hybrid cloud, organizations can strike the right balance between innovation and operational stability.”
4. Embrace GenAI.
In most cases, specific technology should not lead the journey. However, the approach should be a little different when it comes to GenAI. Because this technology holds the key to transforming and automating many processes, organizations should specifically look at each business problem with GenAI in mind to see how or if the tool can help overcome the challenge.
“Generative AI is a game-changer in digital transformation, enabling companies to automate complex processes, personalize customer interactions at scale, and unlock new levels of efficiency,” says Boice. “By leveraging GenAI, businesses can move beyond simple automation to intelligent decision-making, allowing them to innovate faster and deliver more value. The key is integrating AI strategically, ensuring it truly enhances rather than replaces human expertise.”
5. Drive strategy and operations with data.
Today, every business is an information business, and data is a company’s greatest asset. Every company needs digital systems that enable it to collect, manage, use, and share data in a secure, reliable, and efficient way—without increasing complexity.
Data is changing business models at a pace never seen before, even in traditional industries such as automobiles, oil and gas, finance, and healthcare. The better a company can analyze its data and integrate it into its processes, the faster, more accurate, and more agile its response to market disruptions will be. By creating a process and technology for collecting, storing and analyzing data, businesses can have the insights needed to make data-driven decisions to help meet their business goals.
6. Always be customer-centric.
A business might start with founders’ or investors’ money, but it’s the customers’ money that keeps it going. It is vital not to lose sight of this fact. If a disruption benefits customers, the business is bound to embrace it wholeheartedly.
“Digital transformation is key to delivering the seamless, personalized experiences that today’s customers expect,” said Boice. “By integrating data, AI, and automation, businesses can anticipate customer needs, streamline interactions, and remove friction at every touchpoint. Companies that achieve digital maturity not only improve efficiency but also build stronger customer relationships, leading to higher satisfaction, loyalty, and long-term growth.”
Technological innovations and disruptions invariably enable service providers, manufacturers, or retailers to connect better with their target markets. They offer limitless opportunities to businesses to gain deeper insights on consumer behavior and address their pain points. How the business uses these insights to minimize friction along the customer journey and improve their experience will influence its success.
7. Focus on a digital-first culture.
Digital transformation only succeeds if every employee starts every task and every decision with a digital-first mindset. In a recent Forbes article, Claudio Saes, a partner at Bell Labs Consulting, said that people’s natural resistance to change is a significant barrier to the change required for digital transformation. Saes has seen firsthand the key to a culture shift toward digital transformation, especially executives incorporating messages into every day interactions.
“For instance, when discussing a business issue casually, elucidate how proposed remedies align with the overarching objectives. During standard performance evaluations, highlight how an individual’s actions support or detract from the company’s aims,” said Saes.
“In assessing a division’s quarterly outcomes, focus on the figures while also emphasizing the leadership’s role in driving change. Even in ordinary Q&A sessions at company sites, ensure responses consistently echo the goals of organizational renewal.”
8. Move towards digital maturity.
The term transformation refers to moving to a new state. In the case of digital transformation, the goal is digital maturity, which is evaluated through a series of phases culminating in using digital technology throughout the majority of processes.
Many companies start their digital transformation viewing it as a one-time project. Instead, it’s a total organizational shift, including mindset, technology, and a strategic approach toward digital maturity.
Boice explained that businesses should view digital transformation as “an ongoing evolution requiring clear strategy, leadership buy-in, and a commitment to continuous improvement.”
“Companies should focus on aligning technology investments with business goals, empowering their teams with the right tools, and staying agile in the face of change,” said Boice.
“Most importantly, success comes from seeing transformation as an opportunity to enhance both operational efficiency and customer value.”
Rewards await those that adapt, but bigger rewards await those that transform. Grab that first-mover and fast-mover advantage.
This is an updated version of the article that was originally published July 14, 2020 and updated August 28, 2022.
Jennifer Goforth Gregory is a contributing writer. Finder her @byJenGregory.
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