What is digital transformation?

digital blog header

There’s a lot of talk at the moment about digital transformation. Especially with HMRC’s Making Tax Digital programme. But what actually is it? And what does it mean for businesses? 

Let’s start with what is it?

I asked Google and this is what came back:

Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.

Or more simply in my view:

Digital transformation is taking the systems and processes you’ve already got and making them simpler and quicker using technology.

Let’s look at an example – and I’m going to use your accounts – as well, I am an accountant!!

So you could either have a complete manual process currently – writing down your income and expenses in a book, filing them in a shoe box, or some folders by month – or so on!

You could have a semi digital process – like recording your income and expenses in Excel – maybe you download your statement each month from your online banking and then make a note of what each transaction is for.

Then the transformation to fully digital is moving to software, like Xero 😉, connecting your bank account so the transactions flow in, raising invoices and emailing them to customers through your software, taking a picture of your expense receipt and uploading it so it connects to Xero too.  This is a full digital accounting process for recording your income and expenses.

This can then be transferred to any process that you do.  Email taking over from writing letters or memos (wow – remember those?!) was part of the digital transformation for written communication.  You’ve probably already done some digital transformation within your business without even realising it.

So why is it so important to businesses?

Because, long term, it will make your life so much easier!  Finding the right app or software to help you digitise your processes will mean the processes will become simpler, quicker – parts could even be automated meaning you can do other less mundane (and potentially more income generating) tasks.

And I say long term to pre-empt the whole resistance to change.  I know change isn’t always easy, especially if you’ve been doing something in a set way for a long time.  It will take time to implement and learn the new way of doing things.  But once you’re in the new rhythm life will generally be easier!  Well, until you find other things to take over the long, tedious manual process that is!!

And to me, that’s what digital transformation is all about.  It’s not using an app for the sake of it, but to actually make your life easier, to improve what you do, what your team does, and to help you deliver that better service.

If you’d like to discover how we can help digitise your accounts – i.e. make the whole process a lot simpler and quicker – then check out our blog and Masterclass Ramp Up Your Business with Xero  Or, get in touch by visiting our Get Started page and completing the quick questionnaire!


Want more tax tips and advice? Check out PPF on YouTube!