How to Digitally Transform Your Business

Discover more about digital transformation. Includes a step-by-step guide and frequently asked questions.

Updated on February 2nd, 2023

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Digital transformation refers to the process of using digital technology to increase business performance and reduce costs. Digital transformation is more than just updating your IT systems, it is essentially a business transformation in which the ways and means of operating and doing business are modified or replaced.

Benefits of going digital
Benefits of going digital:
  • Improve operational efficiency.
  • Faster time to market.
  • Meet changing customer expectations.
  • Improve product quality.
  • Reduce costs.


Central to the digital transformation of a business is the shift towards data-driven decision-making, seamless collaboration across all areas of the business, improving customer experiences, and innovating products, services, and processes.

This is possible through the integration and leveraging of digital technology, such as cloud-based tools, artificial intelligence (AI), big data, analytics, and the Internet of things (IoT). It is crucial to ensure that all systems that are deployed are scalable and can be integrated to streamline and simplify operations.

How to Digitally Transform Your Business (Checklist)

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15 Steps for Digitally Transforming Your Business:

Digitally transforming a business must be planned carefully, with your business goals and objectives in mind. Don’t forget to involve your employees and business partners in the process. Begin by evaluating all areas of your business and identifying problems and weaknesses, as well as opportunities for innovation. Following this guide, you will have a good idea of the tools and solutions you need.

1. Revise HR processes to increase efficiency and cut costs.

A successful digital transformation depends heavily on the people in the organization, placing the HR department at the heart of the process.

Starting with human resources gives you the opportunity to introduce all of your employees to a new way of doing things. Human resources management systems make it easier to manage and process employee information, can drastically reduce time-consuming manual tasks, and increase the overall efficiency of HR processes.

Benefits of Digital HR Management:

  • Cloud-based employee information databases reduce the need for hardcopy files and make it easier to find, manage, and update employee records.
  • Most HR solutions offer tools to simplify recruitment activities.
  • Employee self-service portals save the HR department time and empower employees to manage their personal information and provide easy access to company information, news, internal job postings, and training materials.
  • Most platforms allow you to integrate employee data, including attendance records and benefits, with payroll software, which increases the efficiency of payroll processes and reduces the margin for errors.
  • Look for features and tools that enable you to manage and track employee performance, and sync reports with employee records.

Our Recommendations:

Gusto or TriNet Zenefits are our top HR software choices, because they both offer an incredible feature profile and integrate with benefits and payroll functions. Before selecting software, be sure to identify your needs, the processes that can be optimized and automated, as well as the ease of use and integration capabilities you require.

Other Considerations:

Keep in mind that you can also integrate your primary HR software with other platforms that are designed to streamline and automate specific functions, like benefits administration, time and attendance schedules, recruitment activities, or employee training.

2. Simplify payroll processing, ensure accuracy, and maintain compliance.

Changing your payroll processes from a mainly manual model to a digital and strongly automated format can save considerable amounts of time and reduce human error.

Many software providers make this process easier than one might think by offering user-friendly interfaces, strong customer support, powerful security features, and a multitude of useful tools and automation features that assist in maintaining compliance, accurately calculating wages, and paying employees on time.

Benefits of Digital Payroll Processing:

  • Switch to direct deposit to save the time otherwise spent printing and distributing paychecks.
  • Tax-related features, such as automatic tax calculations, income tax filing preparation, and the creation of tax documents, save time and labor and reduces the chance of miscalculations.
  • Robust payroll systems offer a multitude of useful, time-saving features, such as the ability to handle worker's compensation, bonuses, expense integration, and FICA Tip Credit claims.
  • Most platforms offer a high degree of security to protect sensitive employee and company information. Be sure to look for features like 256-bit SSL encryption.

Our Recommendations:

Gusto and TriNet Zenefits are also our top picks for payroll software. Gusto offers an impressive selection of features, from standard payroll software features, like automated taxes and compliance management, to less common and niche features, such as R&D tax credit, 256-bit SSL encryption, and lifetime accounts. TriNet Zenefits is a similarly comprehensive solution with an affordable price tag.

3. Save time and maintain high accuracy in all accounting functions.

A key benefit of accounting software is the ability to automate processes that are incredibly time-consuming and prone to human error due to their often very monotonous nature, like data entry.

Moving your accounting processes onto a cloud-based platform offers you more flexibility in terms of access and scalability, and allows for better organizational control.

Benefits of Digital Accounting Solutions:

  • Save time and reduce the potential for human error by automating tasks, such as data entry, invoicing, and record-keeping.
  • Have all your documents and transaction records in a secure and centralized location.
  • Use planning, forecasting, and tracking tools to easily monitor and manage cash flow.
  • Tax-related features simplify tax calculations and preparations and help you maintain tax compliance.
  • Many platforms allow you to integrate accounting with other business functions, such as procurement, to create more efficient workflows.
  • Most systems require a small learning curve. Evaluate the overall user-friendliness of the program, as well as the degree of customer support and training provided by the vendor.

Our Recommendations:

For your accounting software needs we recommend FreshBooks and Botkeeper. Freshbooks is one of the leading cloud-based accounting solutions small businesses can use to automate invoicing and time and expense tracking. Botkeeper is a flexible and reliable option that offers a great selection of features and is known for good and responsive customer support.

4. Simplify customer relationship management and enhance customer satisfaction.

One of the most important functions of the customer service, sales, and marketing departments is customer relationship management (CRM).

Investing in a robust CRM platform that integrates well across different departments can help you improve all aspects of customer engagement.

Benefits of Digital CRM:

  • Having all customer information and records of every customer interaction instantly available in one, secure location improves efficiency and reduces potential oversight.
  • Most platforms offer powerful analytics tools that can identify activity patterns and provide in-depth, actionable insights.
  • Most platforms offer tools to personalize marketing messages and promotions based on individual preferences.
  • Offering customers a more efficient, personalized service directly impacts customer satisfaction and retention levels.

Our Recommendations:

Our top choice for managing customer relationships is HubSpot. HubSpot's CRM system is completely free and offers unlimited access to almost everything a business could need to organize, track, and maintain leads and customer relationships.

Freshsales is another great option that offers a full range of standard CRM software tools, including lead and contact management, tasks, and activity tracking tools, mobile optimization, and reporting dashboards.

Other Considerations:

In your software selection process, always assess how easy to use it will be for the employees who will be working with it.

CRM software offers the most value and benefits when integrated with other platforms, such as sales, HR, and accounting. Enquire about third-party integrations before settling on a CRM solution.

Benefits of using digital technology to improve customer experience
Benefits of using digital technology to improve customer experience:
  • Higher score of client satisfaction.
  • 10% to 20% cost reduction.
  • 10% to 15% revenue growth.
  • Increased employee satisfaction.


5. Cut marketing costs and attract more customers.

The primary purpose of digitally transforming marketing activities and processes is to attract and engage more customers while spending less time and money.

Cloud-based marketing tools help businesses improve the cost-efficiency of their marketing operations and achieve better results through data-driven multi-channel campaigns. While some marketing platforms also offer CRM tools, you also have the option of integrating different marketing tools with your existing CRM platform.

Benefits of Digitally Transforming Marketing:

  • Using marketing automation software to automate tasks, such as compiling customer information, email marketing, and social media posting, saves time and reduces the workload.
  • Using digital communication channels to engage with consumers is more cost-effective than traditional media and allows for highly targeted messaging.
  • Marketing software lets you coordinate and monitor marketing activities and campaigns across multiple channels in one, easy-to-use platform.
  • Advanced analytics and reporting tools can help you to make data-driven decisions and improve campaign effectiveness.
  • Event management software simplifies event planning activities, from supplier coordination to promotion, and ticketing.

Our Recommendations:

Our top pick for digitally transforming your marketing processes is ActiveCampaign, a comprehensive customer experience automation platform with several advanced features that is great for running multi-channel marketing campaigns.

You may also want to look at Sendinblue, which is a great all-in-one marketing platform that includes email and SMS marketing tools and has chat capabilities, marketing automation features, a CRM system, and audience segmentation tools.

6. Deliver excellent customer service in record time.

Cloud-based customer service tools help businesses engage with their customers via multiple channels and provide fast and efficient support.

As consumers have become increasingly active online, the expectation that businesses engage with them and provide fast and efficient support via the channel of their choice, be it live chat, email, social media, or via telephone, is growing. This is where cloud-based customer service tools, including help desk software and live chat software, help businesses meet and exceed their customers' expectations.

Benefits of Digital Customer Service:

  • Simplify the way customer requests are processed with tools for ticketing, routing requests, tracking, and recording all customer interactions.
  • Having your customer information and interaction history easily and quickly accessible on one platform enables support agents to provide faster service and increases productivity.
  • Since not every request can be solved immediately, setting up automated responses to acknowledge customer requests and manage customer expectations will keep your customers from feeling ignored.
  • Self-service portals enable customers to solve their queries before contacting a support agent. This can lower staffing costs.

Our Recommendations:

Our top pick for optimizing customer service processes is Freshdesk. Freshdesk is cloud-based, easy to use, and enables customer support agents to address and resolve customer queries and complaints efficiently across multiple channels. It includes queue management, multichannel data collection, and complaint management tools.

Another leading customer service platform is Cayzu, which is very user-friendly, flexible, and equipped with a good range of features that make handling difficult tickets a simple task.

7. Reduce expenses with e-commerce and enhance in-store operations and shopping experiences.

The rise of eCommerce has redefined the shopping experience. There has been a steep increase in purely online stores. While brick and mortar are not obsolete, a digital transformation is essential for these businesses to remain relevant.

How can you do this? Look at adding e-commerce to the way you are doing business, as well as upgrading and modifying how things are done in-store. In-store solutions include smart POS systems and analytics solutions that help you optimize operations, store layout, displays, promotions, and more.

Benefits of Digitally Transforming Retail:

  • eCommerce platforms are a major cost-saver as there is no need to rent or buy commercial properties with high visibility and foot traffic or to invest in in-store promotional materials.
  • eCommerce platforms are a great option for serving niche markets and allow you to create more personalized shopping experiences, for example by generating recommendations based on past purchases.
  • If you have a physical store that you've extended onto a digital platform, you can drive customers in-store with initiatives like in-store only deals or free in-store pick-up for online orders.
  • Moving from a basic cash register to a point of sale system increases processing efficiency.
  • Investing in an in-store analytics program can help you better understand your customers' shopping behavior, reveal which displays and floor layouts work best, provide insights about store traffic, and optimize staff schedules.

Our Recommendations:

In the e-commerce arena we highly recommend BigCommerce and Shopify. BigCommerce is a leading e-commerce platform that offers comprehensive features, including product review functionality, a great range of built-in sales tools, and multichannel integration. Shopify is similarly priced and offers a strong feature set, including multichannel integration, and is easy to set up and use.

If you are looking for a robust POS system, you will want to consider Square or Loyverse, two of our top choices. Square is a feature-rich and very intuitive system that is highly mobile and includes a responsive inventory management tool Loyverse is very affordable and user-friendly with a good selection of features to help you optimize sales processes, manage stock and inventory, run loyalty programs, and track sales.

RetailNext is the leading provider of in-store analytics solutions, offering a comprehensive range of tools to optimize your in-store operations and customer experiences, from advanced people counters to optimized in-store marketing solutions.

Other Considerations:

We have also compiled a list of the best merchant services and online credit card processing companies for you to make an informed choice when you set up your online payment gateways.

8. Gain a competitive advantage by digitizing order fulfillment processes.

After setting up your e-commerce site, you will be looking for the best way to manage, process, and deliver online orders.

There are a variety of software solutions that can help you streamline this process for maximum efficiency, including cost-efficiency. Shipping software, order management systems, and order fulfillment software are very alike in the function they fulfill. The majority of providers will have a very similar solutions profile, designed to simplify the ordering process, provide real-time visibility of the order process, and ensure efficient order delivery.

Benefits of Digital Order Fulfillment:

  • Use one centralized platform to manage the complete order fulfillment process for all of your e-commerce sites.
  • If you ship across borders, ensure that the platform you select offers features and tools to handle international shipping, such as the ability to handle customs forms and integrations with international shipping carriers.
  • Allowing customers to see the real-time status of orders contributes to better customer experiences.
  • Most platforms allow you to easily access, maintain, and manage customer records, order and payment history, as well as returns and refunds.

Our Recommendations:

Our top choice for managing order and shipping processes is ShipMonk because it is incredibly scalable, offers a great range of features, and integrations, and allows for easy supply chain and order fulfillment management.

ShipStation is a top-notch order management system that offers a feature-packed e-commerce platform and integrates well with shipping accounts.

ShippingEasy is a leading shipping software option that is great for automating shipping processes and managing inventory.

9. Simplify operations management and improve operational efficiency.

Maintaining a complete overview of your operations can be a challenge, especially when you already have different systems in place for each business area.

This is where a robust enterprise resource planning (ERP) software is a valuable asset. ERP software allows you to manage and automate most of your business processes from one centralized platform and helps you improve the efficiency of day-to-day operations as well as long-term planning.

Benefits of Digital Operations Management:

  • ERP systems can manage and automate processes across multiple business functions, including human resources, finance and accounting, supply chain management, and customer relationship management.
  • Centralizing all your data allows for better collaboration between different departments.
  • Automating repetitive processes, especially data entry processes, improves efficiency, saves time, and increases accuracy levels.
  • Most ERP systems allow for a range of integrations, meaning that you can easily integrate existing systems from different departments, such as CRM or accounting programs, to maintain complete visibility and control of all operational processes.
  • As the central platform for all data and processes, ERP systems are an excellent source for comprehensive reports and analytics, allowing you to identify and address issues as they arise.

Our Recommendations:

We highly recommend ePROMIS ERP, an ERP system that can handle a wide range of functions, including CRM, human resources, supply chain management, asset management, project management, analytics, and customer relations.

A similarly impressive option is ERPAG, a comprehensive, cloud-based ERP solution suitable for small to mid-sized companies.

10. Achieve maximum production efficiency.

Production lines are one component of the entire manufacturing operation that has made strides in digital transformation, mainly through automation.

However, more can be done to increase the overall efficiency of your manufacturing operation. A complete manufacturing software solution can help you eliminate unnecessary downtime and improve manufacturing efficiency, and even increase profit margins.

Benefits of Digitally Transforming Manufacturing:

  • Make use of tools for easy and accurate production planning, scheduling, and rescheduling.
  • Create cost estimates and quotes fast, communicate these to customers, and record each interaction and quote.
  • Easily track and manage inventory and stock movements, purchases, and purchase orders.
  • Have a clear overview of your operations, all tasks, and duties, in one system.
  • Stay on top of relevant regulations and quality standards.

Our Recommendations:

Plex offers fantastic manufacturing software solutions. It helps you automate the plant floor and offers an impressive selection of useful tools, including production control, inventory, and supply chain management.

11. Save costs and ensure uninterrupted operations with computerized maintenance management solutions.

Efficient maintenance management helps businesses avoid poor production quality, risks to employee safety, and ultimately financial loss due to pauses in production.

Computerized maintenance management software (CMMS) helps businesses manage, plan, and implement maintenance activities more efficiently, reduce operational downtime, and control maintenance costs.

Benefits of Digital Maintenance Management:

  • Easily plan and schedule regular maintenance activities and set reminders and alerts, effectively reducing the risk of downtime and repair costs.
  • Maintain a real-time overview of inventory levels, track assets, and efficiently manage work orders from one single platform.
  • Reduce the need for overtime and minimize loss of work time due to compromised employee safety.
  • Save time preparing paperwork for compliance audits by generating reports on maintenance activities.
  • Most CMMS solutions include tools to plan and manage preventive maintenance activities.

Our Recommendations:

UpKeep is our top pick for efficient maintenance management. It is a highly intuitive software that is easy to use and offers a fantastic range of features, including powerful monitoring tools.

Other leading choices for streamlining maintenance activities include Direct Line and eWorkOrders.

12. Provide your employees with user-friendly, intuitive tools for efficient teamwork.

Employees that receive good training and work well as a team are a key component of a successful business.

Providing your employees with the tools to facilitate seamless and efficient teamwork across organizational departments saves time and increases operational efficiency. Cloud-based collaboration tools, document management, and digital asset management software enable your employees to work together by sharing documents and engaging with each other, even while working remotely.

Benefits of Digital Collaboration:

  • Work remotely without compromise.
  • Easily track the status and progress of projects and tasks.
  • Make it easier for your employees to share files and communicate across departments.
  • Improve workflows and save time by having all your files and documents available on one centralized platform.

Our Recommendations:

Dropbox is a great collaboration tool, offering massive storage space, formidable security, and an intuitive and user-friendly interface. DocuWare, another top choice, is a powerful document management tool with excellent collaboration capabilities and CRM integration.

13. Improve data security and reduce IT costs.

Cloud services eliminate the need to set up and maintain physical data centers on your business premises and offer multiple benefits, including advanced data security and mobile accessibility.

If your current database management system is not compatible with the move to the cloud, you will want to look for a cloud-based solution. Database management systems are a worthy investment and an efficient solution for managing large amounts and different types of data, allowing you to create a more organized working environment.

Benefits of Digital Data Security and Management:

  • Cloud services significantly reduce your IT costs because they eliminate the need to purchase and maintain a physical data center.
  • Database management systems allow you to integrate your organizational data and have a complete overview of your organization's operations.
  • Data is easily shared and accessed from Internet-enabled devices, giving you more flexibility.
  • Data can be backed up and recovered automatically.
  • Data is protected by encryption and user-based security settings.

Our Recommendations:

Our top choices for cloud services are Amazon S3 and Azure Storage. Amazon S3 is one of the most affordable options on the market and easily integrates with Amazon's powerful infrastructure of online tools. Azure Storage is a competitively priced Microsoft product with great file sharing features, reliable cloud performance, and excellent customer support.

If you are looking to invest in a new database management system, we highly recommend Knack and TeamDesk. Knack is an affordable and user-friendly online database option that does not require coding experience on behalf of the user. TeamDesk is cloud-hosted database software that is similarly user-friendly and fully customizable.

Top 5 benefits of moving to the cloud
Top 5 benefits of moving to the cloud:
  • Easier deployment.
  • Scalability.
  • Faster implementation speed.
  • Automatic updates.
  • Real-time visibility.


14. Secure, monitor, and manage your digital framework.

Moving to new, digitalized ways of doing things also brings new challenges and risks.

With the right set of solutions, you can easily manage and control your networks and mobile devices, as well as ensure the security and confidentiality of information and data that is stored on your computers, in your local network, or the cloud.

Benefits of Digital Network Monitoring and Security:

  • Cyber security software guards your computers and systems against viruses, phishing, spyware, and other types of unauthorized access.
  • You can use mobile device management (MDM) software to secure, track, and monitor employees' mobile devices.
  • You can use MDM software to remotely manage and update the software of devices with varying operating systems.
  • Network-monitoring software allows you to track download speeds and other network performance metrics.
  • Network monitoring software allows you to quickly diagnose problems so that they can be repaired with minimal interruption to the network.

Our Recommendations:

Our top cyber security software recommendations are Kaspersky Internet Security and Norton. Kaspersky is a well-established company that offers a wide range of products for protection from email spam, malware, phishing, hacking attempts, and data leaks, and is compatible with all devices. Norton is another excellent choice that offers powerful protection against phishing and malicious URLs and gives users a virus protection promise.

For your mobile device management needs you can look to Scalefusion and SureMDM. Scalefusion is highly customizable and offers a great set of features, including password-protected lockdown and location tracking. SureMDM is a powerful and intuitive MDM platform with a good selection of useful features.

Leading network monitoring solutions include Atera and Auvik. Atera is an easy-to-use web-based network monitoring software with a focus on remote monitoring and management (RMM) solutions. Auvik is another powerful network monitoring solution that is packed with useful features, including real-time network mapping and automated network monitoring.

Other Considerations:

Other security-related solutions you may be interested in are comprehensive small business security systems and password managers.

15. Use data analysis to make great business decisions and gain a competitive advantage.

Business intelligence (BI) tools help companies make sense of their data and gain valuable insights that inform important decisions.

BI software includes data analytics and visualization tools that are used to gather, analyze, and visualize business data. BI software enables businesses to fully understand the state of their operations, build their competitive edge, and maximize returns.

Benefits of Digital Data Analysis:

  • Collect data on your KPIs and market trends.
  • Advanced analytics tools identify data patterns and provide in-depth insights.
  • Generate accurate reports on different data sets, such as staffing, operations processes, and expenses.
  • Make data-driven business decisions to improve operational efficiency and reduce costs.
  • Visualize information to make data easy to understand, interpret, and present.
  • Easily track and manage performance goals.

Our Recommendations:

Our primary recommendation is Zoho Analytics because of its robust, cloud-based framework and great feature profile that includes drag-and-drop data visualization tools, connections to multiple data sources, and alerts for tracking important metrics. InsightSquared is another great option. It is a powerful sales and analytics solution that is easy to use.

If you only want a data analytics tool, we recommend the user-friendly and flexible Klipfolio or Dataiku, which is not only free but also doubles as a collaboration tool.


What is a digital transformation strategy?

A digital transformation strategy is essentially a business transformation strategy detailing the framework for implementing a new way of doing things or modifying existing processes and business models with digital technology. It encompasses a shift towards using digital technology to radically improve business performance across all business areas, from the supply chain to the customer journey.

What are digital transformation examples?

Netflix is a primary example of a complete digital transformation, having transformed from a DVD by mail service to an online streaming service. Another good example is Domino's Pizza. The franchise rebuilt its brand image through successful digital strategies that included moving their core systems into the cloud, such as digital ordering systems, ERP, and supply chain systems, as well as building a powerful eCommerce platform, something not generally associated with fast-food.

Why is digital transformation so important?

  • To meet changing consumer expectations.
  • To stay competitive in a changing marketplace.
  • To keep up with digital change.
  • To cut costs and improve operational efficiency.

What does digital transformation include?

A complete digital transformation requires every functional area of a business to be reviewed in order to identify how processes can be changed and optimized with digital technology. This may vary for each business. Common areas include the following: