As digital technology advances and plays an ever-bigger part in our daily lives, businesses have to keep up with the times. From a broad perspective, it’s simple: Keep up or fall behind. Understanding what digital transformation means to your business requires a bit more exploration, however.

The root of any change in business starts with customers. It has to: Customer happiness is how you win in business.

Modern customer expectations are being driven by largely digital technology and digital innovations. The always-connected customer is always seeing new possibilities. When they see new things elsewhere, they want them from you, too. And if you can’t offer them, they’ll find someone else who can. The digitally connected world makes it easier than ever for customers to comparison shop and move from one brand to another, often with minimal effort required.

 
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Digital transformation impacts every industry. Whether your business generates revenue through client services, digital media, or physical goods, technological innovations can transform your means of production, distribution, and customer service. 

Depending on your business, your customer could be a consumer or a business-to-business (B2B) client. Let’s extend our perspective to also include your employees. As we’ll talk about in a moment, employee expectations are being driven by their own consumer experiences, particularly when it comes to digital innovation in the workplace.

Today’s customers are connected and empowered by the digital era. They’re connected 24/7, and increasingly want and expect that same around-the-clock access to the companies they do business with. The key drivers behind this change in consumer behavior? Mobile devices and social media. 

Over half of customers surveyed for Salesforce’s report “State of the Connected Customer” (first edition) said that technology has significantly changed their expectations of how companies should interact with them. More specifically, 73% of customers prefer to do business with brands that personalize their shopping experience, according to the Harvard Business Review. 

Salesforce’s research also reports that 57% of consumers said it’s absolutely critical or very important for companies they purchase from to be innovative. Otherwise, they might just look for new companies to buy from: 70% of respondents said new technologies have made it easier for them to take their business elsewhere.

The Apple iPhone is often mentioned as a key driver in the adoption of consumer technology in the workplace. The iPhone wasn’t originally marketed to businesses, but it quickly became popular, to the point that corporate IT departments had to accommodate employees wanting to use iPhones in lieu of other devices. Once a few big employers opened their doors, acceptance of iPhones in the enterprise spread quickly.

The iPhone disrupted the status quo for technology adoption in the workplace. Instead of IT leaders telling employees which approved devices to use, enough workers asked for iPhones that IT departments eventually acquiesced. This trend continues today, with more “consumer-grade” technologies making their way into the workplace. Maybe even more noteworthy is the flip side of the trend: Enterprise software has started taking design and functionality cues from the consumer world. Long live ease of use!

Millennials — more than any other subset of the workforce — are proponents of the digital-first mentality. Having come of age on PCs, consumer electronics, and phone apps, millennials expect to enjoy the same powerful, easy-to-use digital tools in the workplace as they do in the rest of their lives.

Digital transformations apply this digital-first state of mind to empower all your employees. In the same way that consumers look for businesses ready and willing to connect with them 24/7 via social media and other digital channels, today’s employees thrive in environments that make it easy to collaborate, access information, and work anytime and from anywhere. Digitalization is a powerful ally of the empowered employee.

For small businesses, the upside to building a digital business can be game-changing. Not only is digitalization key to meeting customer expectations and empowering employees, but it can also help small businesses do more with less. The efficiencies afforded by going digital — having one comprehensive database shared across your entire business, leveraging customer data to create personalized messaging and service strategies, enabling employee connectivity from mobile devices, for example — can free small teams up to spend more time winning and keeping new customers.

Bonus: When you build digitally from the beginning, it’s much easier to scale systems as your business grows.

Employees aren’t the only ones benefiting from easy-to-use, always-on access to information in the workplace. Machines themselves are getting smarter, too. Artificial intelligence (AI), the Internet of Things (IoT), cloud analytics, and sensors of all sizes and capabilities are transforming manufacturing, production, research — virtually all facets of business across all industries.

 
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The examples are never ending. Digital innovations like AI and the IoT are driving all manner of advancements in the production of everything from consumer goods to cars and trucks. Optimized manufacturing processes adapt to changing consumer demand. Cloud-based software affords real-time visibility into supply chain logistics. Customer experience mapping powered by machine learning surfaces key insights to help product planners, marketers, and budget makers alike do their jobs better. Together, these and many more innovations like them are changing the way we do business, from every conceivable angle.

Digital transformation is business transformation. It’s a transformation that’s being driven by the basic desire to make work better for everyone, from employees to customers. The drivers we just walked though are some of the biggest reasons behind the massive changes rippling through the business world right now. Add to that the need every business has to compete for — and win — customers. If your competitors are leveraging digital transformation to streamline production, expand distribution, build a better workplace for employees, and improve the overall customer experience, you’d better up your game, too.

But how are these changes taking shape? What does digital transformation look like in practice, across different parts of an organization? Let’s take a look at some examples.