Digital transformation refers to the use of information technology to transform one's business, either by promoting digital processes to replace non-digital or manual processes, or by replacing old information technology with newer information technology.
The progress of digital transformation varies from region to region. According to the McKinsey Global Institute's 2016 Industry Digitization Index, Europe's digitization potential is 12 percent, compared to 18 percent in the United States. In Europe, Germany's digitalization potential is 10 percent, while the UK's is 17 percent, almost the same as the US.
One example of digital transformation is the use of cloud computing. This reduces reliance on user-owned hardware and increases reliance on subscription-based cloud services. Some of these digital solutions enhance the functionality of traditional software products (e.g. Microsoft Office compared to Office 365), while others are entirely cloud-based (e.g. Google Docs).
Because the companies providing the services are guaranteed regular (usually monthly) recurring revenue from subscriptions, they are able to fund ongoing development with less risk (historically most software companies have derived the majority of their revenue from subscriber upgrades and have had to invest up front in developing enough new features and benefits to encourage subscriber upgrades) and often use agile software development in-house to form to provide more frequent updates.
This subscription model also reduces software piracy, which is a major benefit to vendors.
Historical Development
With the introduction of the World Wide Web, the scope, dimensions, scale, speed, and effects of digitization changed radically, putting more pressure on the process of social transformation. Companies, including Dell, quickly capitalized on the World Wide Web between 1996 and 1997 to disrupt traditional PC manufacturing companies such as IBM by selling products directly to consumers rather than through a network of resellers or hobby stores, and as they navigated the Web.
In 2000, digitization began to be used more widely as a concept and argument for the full introduction of IT in government, increasing the use of the Internet and IT at all levels.
Similar developments began in the general business environment in order to increase awareness of issues and opportunities. For example, in the European Union, an initiative called the "Digital Single Market" has been developed to propose national digital agendas for the EU, which should progressively and actively contribute to the transformation of future societies, communities, structures, and the creation of a more modern development-based e-government and information society.
As a result, the debate around digitization is becoming increasingly important in political, business and social issues and is related to the political working issues of community development, new changes in practical business methods, effective opportunities for organizations in the development of their operations and business processes, and the impacts on the internal. and external efficiencies of IT, among others. in 2018, digital transformation in manufacturing is expected to create more than $370 billion in global value over the next four years.