Spending on digital transformation is going through the roof. Technology research firm Gartner has predicted that in 2023, it will hit $4.6 trillion across the globe. To put that in perspective, it's over quadruple the amount of the United States defence budget.

It's big business with big numbers to crunch. This might make you think that it's the preserve of market leaders – your Ubers, Amazons and the rest.

In fact, digital transformation has tangible benefits for businesses of all shapes and sizes. It has the potential to make you more agile, more secure and more cost-efficient.

But what is it exactly?

What is digital transformation?

Digital transformation is all about making the move from business-as-usual to a business model built around data, analytics and the cloud.

This has far-reaching ramifications for everything from your interactions with customers to how you deliver your goods or services.

Key features of digital transformation can include:

• Migrating to a cloud-first environment.
• Prioritising remote or hybrid working – a working culture that's "remote-first" as well as cloud-first.
• Training up your staff to be cloud-adept.
• Leveraging artificial intelligence (AI) and machine learning for data analytics.
• Using apps and extended reality technologies to improve the customer journey.
• Using AI to automate performance management.

All these features have the power to accelerate business growth. They connect teams, improve the customer experience and deepen your market research.

What benefits can digital transformation bring?

The first benefit relates to accessibility. The days of ring binders, box files and paperweights are starting to seem as antiquated as quill and parchment. The improvement isn't just about the convenience of word processing – it's that information and software aren't welded to the spot.

The stats are clear: more and more people are working from home – or splitting their work life between home and the office. One consequence of this is that documents and software need to be accessible from anywhere.

A cloud-first environment means your staff can access what they need from any location and from any device. No one needs to pop into the office to get a crucial bit of paperwork.

Of course, these complex networks bring their own challenges. An office environment may be restrictive in some ways, but at the very least an intranet is easier to secure than a network with users joining and leaving from multiple locations.

That's why an important part of digital transformation is the adoption of cloud-native security.

You can take advantage of public cloud providers' security postures – but you also need your own. In a cloud-first world, this means multi-factor authorisation, zero trust and the principle of least privilege.

Zero trust is an approach to security which assumes the worst of every user. It's not forgiving and it never turns a blind eye. Anyone trying to access the system has to take their belt and shoes off and pop them in the virtual tray.

Relatedly, the principle of least privilege is the belief that a user should have access only to the workflows they need to do their job. This minimises the chances of employees causing cyber infections (intentionally or accidentally).

This new school of security is tough. It's another reason why digital transformation can pay dividends.

But if a company is undergoing this change, everyone needs to be on board. Staff may need training to stay in the loop.

Saving time and money

Outsourcing hardware to a public cloud provider can save you money. Instead of paying for upkeep and maintenance, you pay a monthly subscription.

You're essentially hiring experts to take care of uptime for you. That means servers are less likely to fail and your day-to-day business is less likely to be disrupted.

If the office is flooded or the power is down, you can continue to work remotely. Your workflows are disaster-proof, safely stowed away in the cloud.

Migrating to the cloud also means that scaling your data requirements is far, far easier. You can use as much or as little as you need and are able to constantly reassess these requirements. You're not lumbered with more capacity than you need and if you want to scale up, you don't have to get the builders in.

Demand sensing

Are you reliant on your sales history to predict seasonal demand? With digital transformation, there can be a better way.

"Demand sensing" is a way of forecasting demand that harnesses AI and real-time data. It looks at "demand signals" – everything from the movements of the market to changes in the weather, from consumer behaviour to supply chain disruptions.

In practice, this can lead to better inventory management and more supply chain resilience.

The case of Nike

Nike is an example of a brand that's undergone a digital transformation.

In 2022, digital channels and applications accounted for around a quarter of its revenue. These included mobile apps, chatbots and tools for data integration and predictive analytics.

They've dabbled in NFTs and the Metaverse and are using "co-bots" to model demand forecasts, minimise their carbon footprint and optimise their inventory.

But it's not just industry stalwarts like Nike who are taking the plunge. These tools are available to everyone – it's just a case of believing that they'll help your business to grow.

Next steps

The age of digital transformation is here. Its business case is increasingly clear – but you may still be using a private data centre and wondering how to make the shift to a cloud-first environment.

One avenue for digital transformation is so-called "lift-and-shift" migration, where your existing workflows are scooped up and dropped into a new cloud environment without any alterations.

You can do it yourself – but outsourcing the job can decrease disruption and lead to a smoother transition.

Looking for a managed cloud migration service? At Ascend, we've executed over 400 successful migrations. Get in touch with our experts to learn how we can help you.