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Digital transformation

Understand digital transformation and how our insights can help drive business value.

What is digital transformation?

Digital transformation is the process by which companies embed technologies across their businesses to drive fundamental change. The benefits? Increased efficiency, greater business agility and, ultimately, the unlocking of new value for employees, customers and shareholders.

Many different paths lead to digital transformation and each organization’s journey will be unique. For example, a company might introduce AI or cloud computing to enhance its customer experience. Or it might redesign its supply chain to make better use of machine learning. A company can even make spot-on predictions about the products customers will want in a few months’ time, then shift production to meet demand.

In every case, though, starting a digital transformation journey requires a new mindset. It is a chance to reimagine how companies do things, often from the ground up.

Two concepts related to digital transformation are digitization and digitalization.

Digitization is the process of translating analog information and data into digital form—for example, scanning a photo or document and storing it on a computer.

Digitalization is the use of digital technologies to change business processes and projects—such as skilling employees to use new software platforms designed to help launch products faster. While digital transformation might include digitalization efforts, it goes beyond the project level and affects the entire organization.

For most companies, digital transformation requires a shift away from traditional thinking and toward a more collaborative, experimental approach. These new ways of approaching work reveal new solutions which, in turn, can improve customer experience, drive employee innovation and spur company growth at the fundamental level.

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Why is digital transformation important?

Prior to the COVID-19 pandemic, digital transformation largely focused on customer experience. Then, everything changed—and accelerated. Now, digital transformation is the centerpiece of operational efficiency and innovation across the organization.

Across industries, change is happening in shorter waves than ever before, and CEOs feel the pressure but recognize the opportunity for the entire organization. And, according to our most recent survey, accelerated digital transformation, including cloud and data, has become the number-one topic CEOs prioritize for the board since the pandemic hit. Our research "Make the Leap, Take the Lead" shows that leading companies in enterprise technology were growing two times faster than most companies, and by doubling down on their tech investments recently, they are now growing five times faster. Leaders harness key cloud technologies, including AI, to outpace their peers. They adopt innovative technology sooner and reinvest more frequently. And they direct their IT budgets toward innovation. The benefits are more revenue and more growth—and the ability to stay ahead of the curve.

The COVID-19 pandemic has accelerated the rate of tech adoption

The top priority for leading companies? Scaling innovation through digital transformation.

Digital transformation strategy

Driving big change in an organization is too difficult to pull off without a plan. There are five major areas companies must address, often in parallel.

Business strategy transformation

Today, all companies are tech companies; all CEOs are tech CEOs. Digital transformation puts technology at the core of business strategy. This approach can reduce operating expenses and inefficiency. It could even change the course of your business. With a unified model across business and technology, it’s easier to achieve future ambitions. The technology path you choose now will determine, more decisively than ever, your company’s success.

Business operations realignment

Transforming business processes and adopting new ways of working for agility and experimentation are crucial to success. What do your customers and employees need most, and how can digital processes help? Starting with these questions can create better processes across the board, whether that’s improving customer service through better data and analytics, moving key services to the cloud, or building sustainability across engineering, manufacturing and supply chain functions.

Adoption of new practices for agility and experimentation

As customer expectations and the pace of change increase, it’s necessary to introduce new ways of working coupled with modern engineering capabilities. Most companies are making suboptimal decisions about how to direct their tech investments. It all comes down to embracing change and innovation. Successful digital transformation is a radically different approach—one that sees technology as accessible and people as adaptable.

A flexible technology core for sustainable change

It’s important not to get locked into just one technology. By staying nimble and flexible, you can catalyze innovation in your company and more easily form ecosystem partnerships that drive speed and scale. A modular approach allows for fast and sustainable change, and staying focused on customer needs is key.

People change management

Digital transformation affects all aspects of business. For it to work, the digital foundation, digital operations and a digitally skilled workforce collectively need the backing of leaders and a culture that is aligned on which new technologies to adopt and how best to integrate them into daily life. What should the future of work look like? How should roles and responsibilities evolve? In what ways can technology enable better knowledge sharing and collaboration? How can leaders be trained to communicate better, have greater empathy and earn trust in a remote-work environment? Technology introduces new challenges for workers, but it can also solve many of them. To create sustainable change, companies often need to build new skills as employees work in new ways.

Forrester ranked Accenture as a leader in digital transformation management, saying that leaders "bring a clear vision for how they execute transformation with evidence from clients that this successfully leads to positive business outcomes."

Being digitally fluent will be key to future survival and growth.

How to enable digital transformation

Companies know that digital transformation is essential. Questions we often hear include "How should I start?" "Where do I start?" and "How can I fund this transformation?" Here are six action steps that help answer those questions and make change possible:

View it as business transformation.

Customers should be top of mind in any transformation. Companies should start by identifying the key friction points that customers may be facing—whether in equipment sales, parts, service or elsewhere. Companies across industries are embarking on large-scale transformations as dramatic market shifts drive reinvention.

Develop your strategy and organizational change.

A clear vision, an integrated approach and a focus on value are key to any transformation. Having the right transformation strategy and workplace—typically called a transformation office—is critical for all stakeholders.

Break down barriers to change.

Focusing on customer challenges enables the breakdown of functional silos. It generally takes multiple functions to share information and solve for a quality customer experience.

Cultivate your partner ecosystem.

Our study in the high-tech and software segment found that 89% of partners are looking for new sources of growth and operational effectiveness.

Adopt an agile approach.

Agility is the key to any transformation. Fostering it starts with creating a business culture in which experimentation is encouraged and innovative ideas can flourish.

Fund it as an investment.

Funding digital transformation is a complex process that is best approached one step at a time. In the short term, start with an end-to-end view of digital opportunities and requirements across the customer journey. From there, choose a challenge that fits your desired investment and payoff opportunity. By doing these things, organizations can self-fund innovation, optimize technology investments and remove roadblocks to change.

Forrester ranked Accenture as a leader in digital transformation management, saying that leaders "bring a clear vision for how they execute transformation with evidence from clients that this successfully leads to positive business outcomes."

Today, all companies are tech companies.

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At the heart of every great change is a great human. Come be part of our team—bring your ideas, ingenuity and determination to make a difference, and we’ll solve some of the world’s biggest challenges.

Frequently asked questions

The five main ways to address digital transformation are: reimagine your growth strategy powered by technology, realign your organization to put technology at the heart, adopt new practices for agility and experimentation, create a flexible technology core for sustainable change and empower your people to innovate with technology.
Think of two, similar consumer product companies. One has undergone a digital transformation, the other hasn’t. The traditional company simply produces and sells products according to what customers order. The transformed company, however, uses a steady flow of real-time data and insights on which products are being consumed, where and how quickly inventory is depleting. This informs production to maximize efficiency in the here and now, but also helps the company predict what consumers will want months or even years into the future.

Funding digital transformation is a complex process that is best approached one step at a time. In the short term, start with an end-to-end view of digital opportunities and requirements across the customer journey.