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How Digital Transformation Helps Businesses

Nov 17, 2023 Rory Traynor Updated On: November 17, 2023
How Digital Transformation Helps Businesses

Digital transformation is currently a hot topic in the business world and is seen by many directors as not just the future of business, but necessary for a business to have a future. The paradigm shifts that COVID has brought on, such as changes in consumer buying habits, employee expectations and global supply chains, combined with the macroeconomic shocks that followed and the nascent AI revolution have created a perfect storm of opportunity and risk; disruptors and the disrupted.

Business models and processes that have been effective for years and even considered foundational for the running of companies are proving to no longer be effective or not agile enough to respond to competitors that are operating in a faster, more advanced manner.

But what does digital transformation mean? Why should a company execute it and what benefits will it bring? In this article, we will outline what digital transformation means and explore ways that it can help a business.


What is Digital Transformation?

Digital transformation is the process of a business changing how it employs digital technologies, processes and people through every level and department, to work more efficiently, effectively and profitably.

The transformation is not just technological but also cultural. Businesses that are adopting digital transformation must challenge their existing processes, procedures and business model and top-level leadership must commit to encouraging and enacting innovation on an ongoing basis. 

It is not simply the introduction of one technology or another to solve a single problem or improve a process but an ongoing change to how a business is run and operates that focuses on innovation, remaining agile and leveraging technology.

Individual elements of a digital transformation strategy could be the development of new software that increases employee capability, the introduction of new pieces of hardware or the development of an app to interact with customers.

Benefits of digital transformation

Remain agile in a shifting landscape

As new technologies are developed those that are the first to leverage them can cause significant disruption to industries and business status quo previously considered inviolate, e.g. Netflix using first online DVD ordering and then streaming to dethrone the global giant Blockbuster. Most recently, the introduction of AI, whilst still in its infancy, promises to unleash a new wave of capabilities and software that will allow for great advancements in productivity capability and how companies interact with their customer.

Company directors need to be aware of new and upcoming advancements in technology or economic changes that will affect their sector and the business itself must be in a position to adapt or benefit from them.

Improve productivity

Since its introduction, the computer has allowed workers to dramatically increase productivity and the amount of work one individual is capable of performing. Similarly, computers and software have led to entire roles becoming redundant as they can be carried out automatically and with much greater speed. 

The rise of the internet, cloud computing and more sophisticated software have furthered this greatly. Now we are seeing AI being introduced to business, which can reduce the time taken on tasks that took employees hours to seconds. The full capability of AI and how it will alter the business landscape is still not fully understood but it will likely provide a significant competitive advantage to those using it over those who have not. 

Reach new customers

Technology means that a company can have a reach that is much further than its size or physical location would otherwise allow. The internet allows businesses to access customers around the world and modern logistic networks mean that physical products can easily and quickly be sent to almost anywhere on the planet.

Similarly, services can also be provided digitally and remotely, which has become the new norm since lockdown, where work-from-home restrictions led to global adoptions of video conferencing software.

It is not just tech that allows you to directly do business with far afield clients, sales and marketing software can identify potential clients and deploy marketing materials to start them on their buying journey.

Those who embrace digital transformation can transcend the physical limits and access markets of up to hundreds of millions of potential customers.

Better meet customers’ needs

Customer care and satisfaction are an increasingly important focus for businesses for a myriad of reasons; the rise of rating sites, increases in competition and increasing adoption of subscription models are a few notable examples.

Whatever the business model, gaining repeat or continuing customers and avoiding bad reviews is an essential part of doing business. However, the increase in customer focus has also led to an increase in customer expectations, so keeping customers happy is not only more important than it was ten years ago, it is also more difficult.

For those companies that embrace digital transformation, numerous solutions will allow them to better serve their customers and protect their cash flow. This could be as simple as introducing an app that makes interacting with your company easier through deploying AI software that can analyse customer interaction and usage.

Reduce costs

Efficiency and reducing costs are at the core of many digital transformation strategies. Whether this is through increased employee productivity meaning less time is spent on staff hours, consolidating IT stacks or deploying analytics software to identify potential savings.

Digital transformation offers a huge number of ways that a company can reduce its spend.

Unlock expertise and innovation in your workforce

Digital transformation is not just the introduction of technology, it is a cultural shift throughout the organisation that aims to innovate and embrace change wherever possible. This has to start at the top level and flow downwards.

Leaders need to foster a culture of collaboration and idea-sharing with employees of any level and demonstrate that ideas will be listened to and considered. This is not just to improve employee morale but is a foundational part of unlocking innovation.

The majority of staff members will be experts at their jobs and have a greater knowledge of their roles and functions than top-level decision-makers. They will likely have many ideas of how to improve productivity and exploit opportunities that otherwise would be missed. Often these will be simply solved by changing internal processes to be quicker and more efficient and not require any capital to be spent, or they could be your company's next big idea.

Staff expertise and ideas are some of the resources most commonly overlooked and wasted by companies.

Case Studies

Finally, we will look at some real-world examples of digital transformation and the methods through which they were achieved.


Airbus wanted to reduce the time taken to fit their cabins and reduce the amount of errors whilst doing so.

To do this they deployed augmented reality goggles and custom software that guided staff performing a fitting. Not only did this lead to faster fit-out times but reduced associated errors by 500%.


When Netflix started, to rent a movie consumers would attend a physical video rental store and choose from the options that were there, they would have to attend again in person to return the film after a few days or risk fines. 

Netflix started as a DVD delivery service, where customers could manage their rentals through the Internet, get them delivered to the door and send them back via post. Netflix then introduced streaming to the mass market and started a revolution that would see brick-and-mortar video rental stores become a thing of the past.

They then innovated again and began creating original shows and movies, reducing the costs of licencing content from studios and production houses.


Domino has a history of successful digital transformation that has seen it become one of the largest pizza chains in the world. They successfully introduced online ordering, followed later by an app to make this easier and have introduced innovations such as their pizza tracker which not only improves customer experience but reduces staff time spent answering calls from customers checking on the status of their orders.

At Red Flag Alert, we help our clients digitally transform their risk decisioning models to be more accurate, more cost-effective and faster. With RFA Automate, risk processes that previously took days are reduced to a matter of seconds, speeding up your business process and reducing costs in staff time. Find out more by our guide to digital transformation or get a RFA Automate demo.


Published by Rory Traynor November 17, 2023

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