Digital Transformation

What Does Digital Transformation Mean?

Digital transformation (DX) is the use of digital technology and data analytics to make data-driven decisions, improve operational efficiency, streamline work and gain (or retain) a competitive edge in business.


Digital transformation projects explore ways that technology can be used to streamline workflows and make business processes more agile. The most successful DX initiatives are able to effectively use structured, semi-structured and unstructured data to improve internal operations and customer experience (CXM).

Technologies associated with digital transformation include cloud computing, big data analytics, artificial intelligence (AI), blockchain, machine learning (ML), the Internet of Things (IoT) and 5G.

Techopedia Explains Digital Transformation

The term digital transformation refers to how a company is transforming its core business processes using digital technology in order to gain competitive advantage and gain differentiation in its market segment.

The term most often associated with the business world in the context of companies striving to keep up with changing customer demands. Streamlining business processes digitally improves collaboration between business partners and provides greater customer value. The steps involved in transformation include the following:

1. Determine the baseline for the organization’s current level of digitization.

2. Conduct a gap analysis to help stakeholders visualize the difference between the organization’s current digital capabilities and its future desired state.

3. Create a strategy for improving digitization the reflects the needs of the organization’s employees, partners and customers. The strategy should include clearly defined and quantifiable KPIs to evaluate success.

4. Implement the strategy iteratively, focusing initial efforts on processes and services that can be transformed easily.

5. Regularly review data for KPIs to determine next steps.


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Margaret Rouse

Margaret Rouse is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical, business audience. Over the past twenty years her explanations have appeared on TechTarget websites and she's been cited as an authority in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine and Discovery Magazine.Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages. If you have a suggestion for a new definition or how to improve a technical explanation, please email Margaret or contact her…