What is digital transformation?

It's a great question with multiple possible answers. Digital transformation is difficult to define because it varies by industry and company, and thus looks different for everyone.

It is reasonable to say that it refers to the application and integration of technology into all aspects of a business in such a way that it fundamentally changes how it operates and delivers value. It does, though, require a cultural shift and an evolving mindset in which curiosity, experimentation, collaboration, and speed are critical components for success.

Transformational journeys, as one would expect, should always begin with a clear aspirational goal, problem, or opportunity that the organization wishes to address. That is, an answer to the question "why are we doing this?" that everyone in the organization and even outside of it (for example, customers and investors) should be able to relate to and understand.

Simply stating that we want to use cutting-edge technology and be "agile" is insufficient, and in many cases can result in unintended consequences. Technology provides tools that enable people to do things that were unthinkable only a few decades (or even years) ago, but these are tools, not outcomes.

The desired outcomes of the company must be the guiding light for the transformation journey, and these are typically reflected in customer satisfaction and, eventually, in the company's financial books. How can the success of any strategic initiative be measured if outcomes cannot be defined?

There are a number of outcomes that leaders should consider in their strategies if they want to reap the full benefits of digital transformation.

For example, the following elements are frequently mentioned:

• Customer experience: using data and analytic tools to gain a better understanding of customers and their needs. Learning about their expectations and aspirations, as well as identifying better and new channels through which to reach them with improved and new products.

• Operational agility: move away from rigid work structures and processes and head towards a more flexible way of working in which change is constant and incremental improvements are critical for long-term success. Re-imagine business processes and apply technology to reduce costs, improve quality, or shorten cycle times.

• Culture and leadership: organizational mindsets, processes, talent, and capabilities must be redefined in order to achieve long-term digital transformation. Implementing a more adaptable workflow and a decentralized decision-making process. Prepare to accept change as a constant and learning and adaptation as essential to success. Recognize that leaders do not have all of the answers and embrace organization hierarchies in which talent can triumph over ranks.

• Digital technology integration: From data and analytics to the Internet of Things, automation, and machine learning, cloud technologies are being embraced. Technology has enormous potential, which can be overwhelming. Consider which tools can help your company and its employees work more efficiently, happier, and provide better services and products to customers.

In sum, digital transformation should center on a specific problem or opportunity of strategic importance to the company. It must be linked to business objectives and outcomes, and its implementation strategy should consider its culture, processes, people, and how technology can help them better serve their customers' needs. Setting priorities and investing in the right initiatives will be critical to ensuring your company's success in a new business era.