The four main areas of digital transformation in the real world

The promise of digital transformation

Digital transformation means using technology to create new, or change existing, business processes, culture, and customer experiences. It is a call to action for businesses to keep up with competitors, set new goals, and meet changing market needs.

But starting a digital transformation just because it sounds like a great idea does not mean it is ready to be a good idea.

Before you begin, ask the following:

• What transformation(s) are you hoping to achieve?
  There are four main areas. We will explain each one below. Review them, explore the real-world examples, then come back to this section.
• What are the goals?
  Does your business need to modernize systems? Or does it need to change its structure to stay competitive? Look at your market and competitors. What is happening in the real world?
• Establish baseline metrics.
  Decide what outcomes are acceptable before you spend time and money.
• Bring in all stakeholders.
  Get feedback from the right people across your business. Use their input to refine your plan.
• Map out the transformation process.
  Use a whiteboard, diagramming tool, or mind map. Define what Point A looks like today and what Point B will look like after the transformation.
• Test, test, test.
  Never launch a plan without proper testing. For example, Twitter made a change to its verification system that failed and had to be rolled back. Mistakes are better caught in testing than in production.

Four areas of digital transformation

A digital transformation effort typically focuses on one or more of the following areas:

1. Process Transformation

This focuses on making operations more efficient and effective. It starts with reviewing current systems to identify what can be improved to better support business goals.

Real-world examples:

• A regional healthcare provider used Twilio Studio Flow to automate post-op follow-up calls.
• A well-known automotive retailer simplified its workflows to support growth.

2. Business Model Transformation

Some companies use digital tools to change their entire business model. For example, communication used to happen mainly through postal mail. Now, we use phones, email, text, and apps.

The need to communicate is still there. But the way we do it has changed through digital transformation.

3. Domain Transformation

Domain transformation means rethinking your products and services, which can blur industry lines and open the door for new types of competitors.

Example:
Amazon started as a bookseller. Then it launched Amazon Web Services (AWS), offering cloud infrastructure to others. This move helped Amazon reshape the web and expand into areas like streaming, subscriptions, and delivery.

4. Cultural and Organizational Transformation

Digital transformation that does not match your values and culture can lead to problems. Companies that ignore new tech risk falling behind, losing productivity, and missing out on growth.

Negative example:
The real estate industry was slow to adopt digital tools. Poor websites, outdated listings, and clunky forms were common. This delayed progress and hurt the customer experience.

Positive example:
Zillow and others modernized the process. Today, buyers can search by neighborhood, tour homes by video, talk with agents online, and apply directly through an app.