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Digital Business vs. Digital Transformation: Understanding the Key Differences

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Digital Business vs Digital Transformation

Today’s businesses are grappling with the distinction between digital business and digital transformation as they navigate the evolving landscape. The pressure to innovate and adapt is immense, with the need to overhaul operations and enhance customer experiences to remain competitive. This obsession to keep up with their disruptors and competitors has led to a rush among organizations to invest significantly in digital technologies. According to IDC, worldwide spending on digital technologies and services is expected to reach $3.4 trillion in 2026. Despite this staggering sum, many business leaders don’t know where to start, how to integrate components effectively, or how to improve collaboration needed for an adaptable agile culture. In fact, nearly 75% of digital investments fall short of their objectives and many abandon these investments. 

As companies move faster and deeper into the digital ecosystem, a key distinction needs to be made between digital business and digital transformation. They may seem to be the same and are often used interchangeably but there is a big difference. While digital transformation is traditionally a point-in-time solution focused on technology, digital business takes a more holistic approach to tackling key challenges. 

Challenges of Digital Transformation:

Digital transformation, often called digitalization, is the process of using technology to change a specific process or how a group within a business operates. This can involve anything from implementing new software to changing the way employees perform a specific task. This can be a major undertaking in terms of cost and resources, and it’s not always easy to measure the results. In many cases technology based transformation is an inefficient, siloed approach that prioritizes technology over aligning with core business objectives. 

Digital Business: Transforming Operations, Culture, and Profitability

Digital business, on the other hand, is not just about technology — it also changes how people work, the way organizations are structured, and the way businesses operate. Digital businesses are customer-centric, agile, and use data and analytics to make better decisions and create new business models. They are also more innovative and adaptable than traditional businesses. Executives take ownership and focus on delivering a specific outcome. According to McKinsey, digital leaders produce better returns, have higher P/E ratios, and 67% higher total shareholder return.

Differentiating Digital Transformation and Digital Business

The difference between digital transformation and digital business is important because it affects how businesses approach technology and strategic investments. Digital transformation is often seen as a one-time event gauged by cost efficiencies and streamlined processes, while digital business looks to improve customer satisfaction, revenue growth, productivity, and innovation. Digital businesses are constantly innovating and looking for new ways to leverage technology and data to improve their business and competitive position. For example, they consolidate data sources to form a single source of truth (SSOT) that democratizes data and helps inform smarter decisions. They also have more responsive operating models, a collaborative innovative culture, invest in talent, and develop cloud-based technology.

Digital transformation can be a good first step to focus on a specific technology challenge, but that alone doesn’t create a true digital business. Companies need to focus on creating a customer-centric, agile, and data-driven business that is constantly innovating. The table below highlights some of the key differences between digital transformation and digital business:

Digital TransformationDigital Business
FocusUses technology to improve existing business processes Uses technology to create new business models and value propositions
ScopeLimited to specific areas of the business such as IT or marketing An enterprise-wide, collaborative transformation that affects all aspects of the business
TimeframeCan be a long and complex process lacking collaboration, which often leads to delays or cancellationTakes an incremental approach and is an ongoing process that fosters continuous innovation and adaptation
OutcomesMeasured in cost savings or efficiency gainsMeasured in customer satisfaction, revenue growth, higher productivity, and market share

Digital business takes a holistic approach with an emphasis on:

  • Customer-centric focus: Data and analytics show customers’ needs and wants, and technology can deliver a personalized experience to exceed their expectations
  • Agility: Responsiveness and flexibility to changes in the market and customer demands allow organizations to experiment and innovate without fear of failure
  • Data-driven decision-making: An end-to-end data ecosystem unearths insights about customers, markets, and competition, empowering organizations to optimize their operations, product delivery, and marketing campaigns
  • Strategic technology investments: Technology can automate tasks, improve efficiency, aggregate data to create an SSOT, and create new products and services
  • Culture of innovation: Employees should be encouraged to experiment, share ideas, and collaborate
  • Talent investment: The right talent can accelerate desired the change and work collaboratively to learn and make better decisions

CEOs should aim not only for transformation but seek to reshape their companies into digital-first entities, driving higher productivity, a competitive edge, and better bottom-line results. They must understand the differences between digital transformation and digital business, terms used by too many interchangeably. Successful digital business starts with support of top management to create customer-centricity, agility, collaboration, and data-driven intelligence. 

 This comprehensive shift in the mindset toward digital business is something you don’t have to undertake alone. Altimetrik is trusted by Fortune 500 companies and startups worldwide to deliver outcomes that demonstrate the potential of digital business. Contact our experts to learn how we can create unlimited opportunities and growth without disrupting your operations. 

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Jeff Fleischman

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Michael Woodall

Chief Growth Officer of Financial Services

Michael Woodall, as the Chief Growth Officer of Financial Services at Altimetrik, spearheads the identification of new growth avenues and revenue streams within the financial services sector. With a robust background and extensive expertise, Michael brings invaluable insights to his role.

Previously, Michael served as the Chief of Operations and President of the Trust Company at Putnam Investments, where he orchestrated strategic developments and continuous operational enhancements. Leveraging strategic partnerships and data analytics, he revolutionized capabilities across investments, retail and institutional distribution, and client services. Under his leadership, Putnam received numerous accolades, including the DALBAR Mutual Fund Service Award for over 30 consecutive years.

Michael’s dedication to industry evolution is evident through his involvement with prestigious organizations such as the DTCC Senior Wealth Advisory Board, ICI Operations Committee, and NICSA, where he served as Chairman and now holds the position of Director Emeritus. Widely recognized as an industry luminary, Michael frequently shares his expertise with various divisions of the SEC, solidifying his reputation as a seasoned presenter.

At Altimetrik, Michael plays a pivotal role in driving expansion within financial services, leveraging his expertise and Altimetrik’s Digital Business Methodology to ensure clients navigate their digital journey seamlessly, achieving tangible outcomes and exponential growth.

Beyond his corporate roles, Michael serves as Chair of the Boston Water & Sewer Commission, appointed by the Mayor of Boston, and is actively involved in various philanthropic endeavors, including serving on the board of the nonprofit Inspire Arts & Music.

Michael holds a distinguished business degree from Northeastern University, graduating with distinction as a member of the Sigma Epsilon Rho Honor Society.

Anguraj Kumar Arumugam

Chief Digital Business Officer for the U.S. West region

Anguraj is an accomplished business executive with an extensive leadership experience in the services industry and strong background across digital transformation, engineering services, data and analytics, cloud and consulting.

Prior to joining Altimetrik, Anguraj has served in various positions and roles at Globant, GlobalLogic, Wipro and TechMahindra. Over his 25 years career, he has led many strategic and large-scale digital engineering and transformation programs for some of world’s best-known brands. His clients represent a range of industry sectors including Automotive, Technology and Software Platforms. Anguraj has built and guided all-star teams throughout his tenure, bringing together the best of the techno-functional capabilities to address critical client challenges and deliver value.

Anguraj holds a bachelor’s degree in mechanical engineering from Anna University and a master’s degree in software systems from Birla Institute of Technology, Pilani.

In his spare time, he enjoys long walks, hiking, gardening, and listening to music.

Vikas Krishan

Chief Digital Business Officer and Head of the EMEA region

Vikas (Vik) Krishan serves as the Chief Digital Business Officer and Head of the EMEA region for Altimetrik. He is responsible for leading and growing the company’s presence across new and existing client relationships within the region.

Vik is a seasoned executive and brings over 25 years of global experience in Financial Services, Digital, Management Consulting, Pre- and Post-deal services and large/ strategic transformational programmes, gained in a variety of senior global leadership roles at firms such as Globant, HCL, Wipro, Logica and EDS and started his career within Investment Banking. He has developed significant cross industry experience across a wide variety of verticals, with a particular focus on working with and advising the C-Suite of Financial Institutions, Private Equity firms and FinTech’s on strategy and growth, operational excellence, performance improvement and digital adoption.

He has served as the engagement lead on multiple global transactions to enable the orchestration of business, technology, and operational change to drive growth and client retention.

Vik, who is based in London, serves as a trustee for the Burma Star Memorial Fund, is a keen photographer and an avid sportsman.

Megan Farrell Herrmanns

Chief Digital Officer, US Central

Megan is a senior business executive with a passion for empowering customers to reach their highest potential. She has depth and breadth of experience working across large enterprise and commercial customers, and across technical and industry domains. With a track record of driving measurable results, she develops trusted relationships with client executives to drive organizational growth, unlock business value, and internalize the use of digital business as a differentiator.

At Altimetrik, Megan is responsible for expanding client relationships and developing new business opportunities in the US Central region. Her focus is on digital business and utilizing her experience to create high growth opportunities for clients. Moreover, she leads the company’s efforts in cultivating and enhancing our partnership with Salesforce, strategically positioning our business to capitalize on new business opportunities.

Prior to Altimetrik, Megan spent 10 years leading Customer Success at Salesforce, helping customers maximize the value of their investments across their technology stack. Prior to Salesforce, Megan spent over 15 years with Accenture, leading large transformational projects for enterprise customers.

Megan earned a Bachelor of Science in Mechanical Engineering from Marquette University. Beyond work, Megan enjoys playing sand volleyball, traveling, watching her kids soccer games, and is actively involved in a philanthropy (Advisory Council for Cradles to Crayons).

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