Why Digital Transformation Is Important


Ah, “digital transformation.” The go-to term for those who want to sound up-to-date on all the latest digital trends without actually having to understand them. Toss that expression into the conversation and watch heads start nodding.

Is “digital transformation” a buzzword? Yes. Do business leaders use it to impress their investors, employees, and customers without doing anything remotely transformative? Yes. Is digital transformation important for a manufacturer to survive and thrive over the next five years? Absolutely, yes! 

This article explains the financial, cultural, and environmental reasons why digital transformation strategy is important. Collectively, they explain why the digital transformation market is worth over $730 billion and growing at a CAGR of 26.7%.

7 Reasons Why Digital Transformation Is Important

1. You Can Build New Digital Businesses and Revenue Streams

A common misconception about digital transformation is that it means digitizing your existing manual processes. Yes, initiatives like migrating to the cloud, replacing legacy on-prem software with shiny new SaaS, or swapping wet ink for electronic signatures play their part. But digital transformation means more than that.

Digital transformation means leveraging digital technologies to fundamentally change how you deliver value to your customers and society. It means integrating new tech into every facet of your operations, creating new channels, revenue streams, and businesses, and increasing market share, revenue, and profitability.

Software development agency BRAINHUB point to some great examples of digital transformation efforts in action: 

  • IKEA is using augmented reality (AR) to create immersive online experiences. They’ve also teamed up with the online and mobile marketplace TaskRabbit to match freelance labor to customers who need help setting up infuriating flat-pack furniture.
  • Lego has branched out into video games, CGI movies, 3D printing, and has even begun adding sensors to turn models into IoT devices. 
  • Nike’s long list of digital initiatives includes a mobile app that scans your foot and matches you to your ideal shoe and a digital library of 6,000 materials designers can use to innovate products. 
  • Disney has cloud-enabled soft toys and Disney+, a TV channel with over 100 million subscribers. They’ve recently launched the MagicBand+, which reacts to park attractions and responds to gestures with lighting effects.

2. You Can Differentiate Your Core Business and Enhance Customer Experiences

Differentiation through digital innovation can help you stand out, compete, and succeed in a rapidly changing business landscape. Captivating digital technology like augmented reality, virtual reality, and 3D product configuration attract, engage, delight, and persuade, helping you forge stronger customer retention. 

However, with so many technologies available, it can be challenging to determine which ones are truly beneficial and which offer style over substance. That’s where digital tools and techniques such as big data analytics, machine learning, social media monitoring, and user behavior tracking come in.

These tools allow businesses to gain valuable insights into customer needs and behaviors. Buyers can then use these insights to determine which technologies will significantly impact the customer experience and deliver the best ROI.

3. You Can Attract and Retain Talent and Elevate Employee Satisfaction

The labor shortage and the dearth of talent in the manufacturing industry have led to a significant shift in how companies prioritize employees’ needs. In today’s market, companies must consider employee experience and satisfaction as highly as customer satisfaction. 

To attract talented employees and maintain engagement, companies must provide digital tools that empower their teams, making them feel like they can innovate and grow within the organizational structure. Only by fostering an authentic digital culture can they hire elite candidates and let them achieve their potential.

4. You Can Achieve Dramatic Efficiency Gains and Cost Savings

The right tech-driven changes streamline processes, reducing the resources and time required to achieve tasks. One example is how implementing CPQ (configure price quote software) transforms the engineer-to-order process for manufacturers selling complex configurable products. Compare the before and after…

This is what the engineer-to-order process looks like without CPQ. It’s exhausting:

  1. Sales rep meets with customer and finds out what they require. Creates a quick sketch and crappy notes.
  2. Sales rep sends napkin sketch and crappy notes to engineer. Engineer doesn’t really understand what it means. 
  3. Engineer translates sketch into CAD file that will function in the real world and sends it back to sales rep.
  4. Sales rep calculates pricing for configuration using a calculator, sends it to management for approval, waits days for a reply, and creates a quote in Excel.
  5. Sales rep shares configuration, price, and quote with customer. Hopes they don’t say “no.”
  6. Customer does say “no.” They don’t like the design, and they’re not happy with the price–it’s marginally higher than the verbal ballpark estimate they received at the first meeting.
  7. The cycle continues!

Notice how different the business process looks with CPQ software in the mix:

  1. Customer visits manufacturer’s website. Uses the visual configurator to design a product.
  2. Configurator validates configuration, displays a price, generates a quote and CAD file in real-time.
  3. Customer removes credit card from pocket and places order.

5. Forge Stronger, Longer, More Profitable Business Relationships 

In strange times such as these, where supply chains are disrupted, costs are spiraling, and customer demands shift on a whim, manufacturers increasingly rely on their trading partners for stability.

Just as successful digital transformation facilitates internal collaboration, it also drives communication and collaboration with external partners. Leading suppliers, distributors, retailers, and sub-contractors expect their partners to integrate seamlessly into their operations. If your legacy systems slow things down, they’ll seek other companies to work with, leaving you isolated.

6. You Can Boost Agility, Resiliency, and Data Security

With real-time access to data, analytics, and insights, companies can make faster, better-informed decisions in the face of challenging circumstances like shifting customer expectations, new competitors entering the market, economic shifts, or even global pandemics.

The ability to connect software systems via APIs means companies can experiment with new solutions and adopt breakthrough technologies like artificial intelligence without destabilizing the technology scaffold that supports their business. They can meet the future head-on with an open, flexible IT infrastructure built on a solid foundation of data security.

7. You Can Increase Sustainability and Climate Credibility

For the sake of the environment, society, the economy, and geopolitical stability, we should all do what we can to pursue more sustainable lives and careers. Manufacturers also have to consider the reputational and financial risk associated with policies and activities that customers, investors, and other stakeholders see as contributing to climate change.

Digital transformation can make manufacturers more sustainable in several ways:

Resource Efficiency: Companies can reduce their environmental impact by monitoring and optimizing energy usage, minimizing paper-related expenses, and reducing unnecessary waste.

Supply Chain Optimization: Digitizing the supply chain and optimizing logistics reduces transportation costs and emissions.

Reporting: Companies can collect and analyze data on their sustainability performance, benchmark themselves against the market, and feed this information back to stakeholders. Transparency increases accountability and performance.


While it may be a buzzword, effective digital transformation can benefit your business significantly. You can build new revenue streams, enhance customer experiences, attract and retain talent, achieve operational efficiency gains, adapt to changing market conditions, and gain a reputation for sustainability. 

However, most companies achieve less than one-third of the value they expect to capture from their digital investments. So to avoid falling into that trap, contact one of our digital transformation experts at KETIV. We’ll make sure you achieve rapid implementation, adoption, and ROI from your digital investments.

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