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Digital transformation: market imperative or strategic choice?

11 September 20263 min read
Guest Insights
Digital transformation: market imperative or strategic choice?

Digital transformation as the dominant business trend of the last decade

Digital transformation is a strategic decision to integrate technology into every area of a business. It changes not only internal processes, but also the fundamental value a company delivers to its customers. At its core, digital transformation enables organizations to operate faster and adapt more effectively to the evolving digital economy.

According to McKinsey, only 50% of surveyed employees reported implementing digital transformation in 2018. By 2024, that figure had surged to 90%. You can see how dramatically this trend has evolved in just six years.

Currently, the key areas driving digital transformation include:

  • artificial intelligence (AI) has been a dominant trend in recent years. Today, companies are increasingly relying on AI to optimize operations and offload routine tasks;

  • сloud technologies allow companies to step away from legacy physical servers, replacing them with scalable cloud solutions that adapt to business needs;

  • hyperautomation actively replaces manual processes by orchestrating advanced software tools and automated workflows;

  • people-centric cybersecurity focuses on educating employees in fundamental cyber hygiene to build a strong human firewall against digital threats;

  • improving the user experience is now built on personalization and the effective use of user data, increasingly powered by AI.

When digital transformation became a market imperative

Dominos Pizza is a great example of a market-driven digital transformation. Facing negative reviews and customer churn due to poor product quality, the pizza chain reformed its recipes while embracing technology. For instance, launching the Pizza Tracker and online ordering reduced the load on phone lines and streamlined customer interactions. Additionally, Domino’s gained deeper data on consumer behavior, tracking peak ordering times, favorite pizzas, and top-performing coupons.

Adobe excels at adapting to changes in the external environment. Once reliant on selling software on physical media, Adobe recognized changing trends and transitioned to a cloud-based model in 2013, pivoting completely to SaaS. This ended the era of perpetual licensing and ushered in a subscription model that continues to develop rapidly today.

Not all businesses realize when it's time for digital transformation. Through a detailed analysis by the contractor (a factory visit, customer service workflow observation, employee interviews, and documentation analysis), Krubeton uncovered a key bottleneck: managers overwhelmed by routine manual work. Implementing a CRM system allowed Krubeton to automate and significantly simplify order creation, tracking, and payments.

When digital transformation became a strategic choice

Netflix began its business by renting DVDs sent via mail. In 2005, the video platform YouTube launched and was rapidly gaining global popularity. Recognizing this shift, Netflix adjusted its business model by 2007, broadcasting films and TV shows online. Instead of waiting for the DVD era to end, Netflix made a timely leap into digital content distribution.

IKEA periodically introduces new technologies to enhance the shopping experience. For example, the company enabled customers to use AR for practical visualization of furniture in their homes before making a final purchase. In 2017, IKEA acquired TaskRabbit, a platform helping buyers find workers to assemble their furniture. By boldly testing digital solutions, IKEA continuously drives better business results.

How to recognize when digital transformation is necessary

There is no single right answer, as it all depends on the company itself and its market position. However, several signs may indicate the need for digital transformation:

  • core processes lead to frequent delays;

  • a rising number of negative customer reviews;

  • competitors are outperforming key business metrics;

  • disruptive new technologies emerge.

We are already living in the digital era and must adapt to market dynamics. Ultimately, a complete digital transformation is only a matter of time.

Sources referenced

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