What is Digital Transformation and Why it is Essential in Today’s Rapidly Changing Marketplace? (Part 1 of 3)

When Airbnb launched in 2008, longstanding hospitality companies didn’t foresee how the home-share startup would disrupt their industry. By 2015, Airbnb would surpass Marriott in market valuation and forever change the hospitality industry. (1) 

So how did three air mattresses on the floor and the promise of a home-cooked breakfast disrupt an entire industry?  Simple. Airbnb led the digital transformation of the hospitality marketplace.

According to the World Economic Forum, most industries will be greatly impacted by digital transformation. 

Accenture analyzed 10,000 companies for their Breaking Through Disruption report and found that 71% are currently in or on the verge of significant digital disruption. (2)

The consensus is that all industries and companies of varying sizes will feel the force of digital transformation in the years to come; unlike past market changes where only specific industries or industry sub-sets were impacted. 

The velocity of change is unprecedented. To remain competitive in the next decade, companies will need to innovate and create a culture open to digital transformation and lead in their industry rather than wait to be disrupted.

So, what is digital transformation, and how can companies be prepared?

Digital Transformation Defined

Digital transformation can be defined in multiple ways. No one company or organization will take an identical route. 

Jerry Kane, the author of The Technology Fallacy, concludes that digital disruption is primarily about people; cultivating a new company culture “to be more agile, risk-tolerant and experimental” is the best way to respond to digital transformation.

Gartner views digital transformation as exploiting digital technologies and supporting capabilities to create a new digital business model.

Through her extensive research on digital transformation, Pamela Hinds, Professor of Management Science and Engineering at Stanford’s School of Engineering, has concluded that companies shouldn’t see it as small tweaks and changes within their organizations, but rather a radical rethinking of their business model and how they do business.

Hinds defines digital transformation as digital transforming: a radical and ongoing rethinking of how an organization employs technology, people, and processes to fundamentally change the customer experience and business performance. 

It isn’t only about the technology; it’s about openness to change: An understanding that digital transformation is a continual process—a fluid sprint of experimentation, adjustment, and change within organizations and teams. 

What we can conclude from these varying, but similar definitions is the fact that digital transformation is forcing companies of all sizes and within all industries to rethink the way they integrate and utilize technology to remain competitive. 

Often, digital transformation is seen simply as emerging disruptive technologies. The fact is, it touches every aspect of a company; from how people and teams are managed to how products and services address a customer-centric marketplace to the business model a company is built upon.  

Next Steps

We’re living in a time of unprecedented change and uncertainty. Not only are innovative technologies disrupting even traditional industries and driving companies to rethink the way they operate, the pace of change means the company culture needs to embrace constant uncertainty.

To remain competitive in the next decade, company leaders must do more than integrate new technologies to stay ahead of digital disruption. It will require a sense of urgency within organizations to innovate so as to continuously enhance and persistently deliver a great end-to-end customer experience.

In part 2 of this series, we explore why and how companies are investing in digital transformation and the industries set to be affected the most in the coming years. And in part 3 (coming soon), we’ll look at the importance of people, organizational structure, and company culture in digital transformation.

Ready to support your company’s digital transformation? 

OpenClassrooms’ master’s level diploma program, Digital Transformation Lead, is designed to teach business leaders to guide their organizations through their own digital transformations and beyond. 

The modular structure allows individuals and teams to get highly tailored, executive education anywhere, anytime. Whether it is for a senior leader, mid-career executive, or someone looking to develop a career managing transformation projects, this program will prove essential across any business large or small. 


For business inquiries, get in touch via employers-en@openclassrooms.com


Individuals, please contact us HERE.




  1. https://www.cbinsights.com/research/airbnb-hospitality-industry-valuation-breakdown/
  2. https://www.accenture.com/_acnmedia/thought-leadership-assets/pdf/accenture-breaking-through-disruption-embrace-the-power-of-the-wise-pivot.pdf


1 Comment
Leave a Reply

Your email address will not be published. Required fields are marked *

Related articles