Digital transformation has become a cornerstone of business strategy in recent years, as leaders look for new and more effective ways to deliver results. Nearly 70% of business leaders responding to Deloitte’s “Measuring Value from Digital Transformation” survey believe that digital transformation is “the single most important investment now and into the future that organizations can make to drive enterprise value.” In fact, worldwide spending on digital transformation is expected to hit a staggering $4 trillion by 2027.
Get digital transformation right and the potential benefit is huge. Deloitte estimated in its “Focusing on the foundation: How digital transformation investments have changed in 2024” report that each digital technology (such as quantum computing and generative AI) generally delivered at least 16% more value in 2024 than it did in 2023. However, businesses today face increasing barriers to digital transformation, with US leaders citing up to a 20% rise in obstacles in 2024.
Business leaders are in an unenviable position where digital transformation is an essential investment, but also a risky one. Knowing the best practices has never been so important.
Digital transformation: a definition
Before looking into the steps needed to make digital transformation a success, it’s important to consider what we really mean by digital transformation in the first place.
Simply put, digital transformation is the process by which companies adopt and embed technologies within their processes and services to drive efficiency and create value. This can take many different forms, from moving data onto the cloud to automating processes using artificial intelligence and even building entire virtual twins of business operations to analyze and improve performance. In each case, new technology is introduced that profoundly changes the way that a business works, with the aim of creating more value, faster.
Digital transformation strategy involves every level of the organization, making it a source of comprehensive but necessary change.
Digital transformation vs digitalization: What’s the difference?
While these concepts are relatively new, the trend toward digital tools has been happening for many years. Digitalization, or the use of digital technologies to change a business model and provide value-producing opportunities, came first. Computer-aided design (CAD) first started transforming engineering and product design processes in the 1960s, and other examples include the popularization of customer relationship management software to replace paper-based files in the 1990s.
Digital transformation takes these opportunities a step further. When technology digitally transforms businesses, it creates new digital business models and improves products and customer experiences, meeting market demands with efficiency and precision. Digital transformation represents not just an advancement in technology, but of human progress, allowing people, processes, tools and data to work together.
In recent years, the development of cloud computing has driven the transformation process into overdrive.
What is cloud transformation?
Because today’s brightest innovators are building new technology at record speed, businesses need to accelerate their systems to keep up with changing market demands. And that’s where cloud transformation comes in.
Companies offering Software as a Service (SaaS) and cloud services offer businesses a platform to accelerate working habits and processes while mitigating technical debt. Solutions like the 3DEXPERIENCE platform on the cloud offer a collaborative environment that enables people and businesses to capture knowledge and know-how. It can be used as both a system of operations to run a business and a model to transform one.
Cloud transformation focuses on migrating an organization’s IT infrastructure, applications and data to cloud-based platforms, and companies who are looking to transform digitally would be wise to adopt a cloud-based, business-wide application as an initial step.
Cloud computing in digital transformation: What role does it play?
There are a variety of definitions of cloud computing, but it can generally be thought of as the on-demand access, via the internet, to computing resources such as software, hardware, databases, storage and networking. These resources will typically be managed by a cloud computing provider such as Amazon, Microsoft or Google in their own data centers.
The cloud has rapidly become a fundamental part of many businesses’ operations, with more than 72% of PwC’s 2024-2025 Cloud and AI Business Survey’s “Top Performer” companies saying they have achieved “all-in cloud adoption” when it comes to modernizing data.
This has transformed the way we work, moving away from the model where an entire company’s IT resources had to be focused on maintaining a secure on-premises environment for employees to work within. With the cloud, work can be carried out securely from any location, a capability which became a necessity during the pandemic and has given companies much greater flexibility in the use of their IT resources. That flexibility also poses a question to businesses: How can they use these newfound capabilities to deliver value? Making the leap from simply implementing cloud technology for basic infrastructure to embedding it throughout all business processes is the crucial next step for companies to achieve digital transformation.
What are the benefits of cloud-based digital transformation for a company?
Moving a business’s operations to the cloud is itself a process of digital transformation that has several significant benefits. They include:
- The costs of maintaining on-premises IT services are largely eliminated.
- Network performance is typically significantly better.
- Resources can be scaled up rapidly to meet demand.
- Better collaboration is possible through real-time access to workplace data and systems
- Sustainability is improved by only using the required processing power.
- Security services provided by cloud providers deliver global coverage against cyber threats at a lower cost.
You can read more about the benefits of cloud computing in the Dassault Systèmes blog post “Exploring the advantages and benefits of cloud computing”.
The capabilities of the cloud have been crucial in accelerating further digital transformation. Cloud-based automation tools can optimize development workflows, allowing a company to release code into production thousands of times per day and therefore deliver new capabilities much more quickly. The scalability of the cloud then allows an organization to roll out a digital service in seconds rather than weeks, making the initial implementation process drastically shorter.
Digital transformation strategy optimizes the cloud, alleviating some of the biggest concerns surrounding such dramatic change within a business. Cloud providers invest in the latest security features, from encryption to advanced incident detection, to ensure that any data moved onto their platforms is kept secure from attack. They also make sure that data is distributed over multiple data centers so that even if a natural disaster or network outage were to damage one application, no data would be lost, and businesses could continue to operate.
Examples of cloud and digital transformation technology in action
Across the globe, digital technologies are being deployed to redefine industry operations.
Driving change: Electric vehicles
In car manufacturing, the move toward electric and autonomous vehicles is progressing at speed thanks to cloud digital transformation initiatives by major carmakers. The development of the next generation of vehicles requires creative design, integrated collaboration and a broad systems engineering approach that is facilitated by cloud-based platforms.
New customer experiences—addressing the desire for greater comfort, safety, performance and sustainability—are also made possible through solutions that enable vehicle innovation teams to develop and virtually validate new options, ensuring easier and quicker compliance with regulatory requirements.
Propelling innovation: HeliAir
Austrian company HeliAir is using the Dassault Systèmes 3DEXPERIENCE platform to fit essential medical equipment into air ambulance helicopters. It can create interior designs in virtual reality on the cloud, share them across internal departments and give customers access so they can be involved in the design process. The platform helps keep team members aware of what needs to be done and when during HeliAir’s complex projects, while the platform’s full data traceability supports the company in remaining compliant with aviation regulations.
“We work in parallel with the helicopter OEM so that as soon [as] it’s off the production line, we’re ready to install the interior,” said Marco Sattlegger, design engineer at HeliAir. “These types of projects are only possible because we have the 3DEXPERIENCE platform on the cloud. Without it, they would take too long and medical equipment would become outdated. This way we can handle more complex projects and get helicopters off the ground and into the skies faster.”
Sensing the future of industry: Pepperl+Fuchs
German industrial sensors specialist Pepperl+Fuchs aimed to unify over 100 different software systems with a single source for all development and product data, so it could stay at the forefront of advances in the field of virtual twins. By implementing the 3DEXPERIENCE platform on the cloud, the business can fully digitalize its existing workflows to improve efficiency, transparency and quality across the entire product lifecycle, implementing digital, data-driven business flows.
Cities in simulation, solutions in sight
Similar advances are possible in government organizations, too—for example, in the delivery of services to citizens and the development of smarter, resilient and sustainable cities. Virtual twins of cities allow officials to assess the potential impact of climate change or infrastructure development and make better decisions accordingly.
What is the best strategy to jumpstart cloud digital transformation?
Cloud digital transformation strategies can deliver a wide range of benefits for an organization. What are some of the best practices? Below, we provide four crucial steps to ensure your project is a success.
. Create a clear strategy
It is difficult to produce measurable results in a digital transformation project without clear objectives. A successful transformation should be focused on delivering greater efficiency in specific areas that will create the most value for the company.
Business leaders should investigate the most pressing needs for their customers and employees and set out a roadmap that identifies the solutions and resources that can help meet those needs most effectively.
Deloitte’s analysis of 4,600 companies’ financial reports over the past decade reveals a clear trend: Companies that successfully align digital change initiatives with their strategy and technology investments see a 14% higher market capitalization compared to those that have a strategy and invest in technology but fail to manage change effectively.
2. Change the culture
Employees at all levels of an organization, not just the leaders at the senior executive level, need to be convinced that change is worthwhile and will deliver value. Without buy-in from the people who will be using the new digital tools every day, it will be difficult to achieve their full potential.
Leaders should therefore be looking to communicate with employees about the introduction of a digital tool to provide a clear understanding of its capabilities and benefits. Providing a strong vision of the future gives credibility to the project. Digital transformation is as much about change management as it is about technological advancement.
There should also be a willingness from the upper management to encourage employees to take risks in order to achieve innovation. Cloud digital transformation allows for many different solutions to be tried quickly at a limited cost, but with the chance to produce valuable results. To take full advantage of the benefits of digital transformation, companies should therefore empower their employees at all levels to try their ideas. This sense of ownership also helps projects to succeed.
3. Redefine roles and develop skills
A company that has successfully digitized processes may free up valuable capacity within its workforce.
The roles and responsibilities of individuals need to be redefined to align with the goals of the transformation. For example, if an employee was previously responsible for a task that has now been automated using a cloud-based tool, they should be given new responsibilities to make the most use of the time they’ve saved.
Programs can also be developed to educate employees in the use of new digital tools, giving them the skills to make full use of their capabilities. This is an important step in helping individuals adjust to the change in their roles and working environment, putting them in a position to deliver the gains in productivity and efficiency that were envisioned at the start of the project.
4. Remain agile
Technology is constantly being developed and updated, especially with the power of the cloud accelerating the pace of innovation. It’s possible that a new solution for achieving the business goals you set out at the start of your transformation project could present itself after the project is already in progress or has been completed.
It could be tempting to remain committed to an existing solution, but competing in an era of cloud operations requires constant transformation and adaptability to avoid being left behind as your competitors take advantage of new technologies. Similarly, changes in market demands could mean that your customers’ challenges, and therefore the capabilities they require, could rapidly shift.
KPMG found in 2024 that, for the past 10 years, CEOs identified technological innovation as the most disruptive force. However, the speed of innovation can offer agile organizations an advantage and innovators and industry disruptors should be ready to match the pace.
It’s essential that organizations keep up with the latest developments and update their strategy frequently to take account of them. Successful digital transformations rely on an agile, innovative mindset that strives to find the best tool to create value.
Embracing cloud and digital transformation services for your business
Progress on a digital transformation journey is essential for companies to succeed in today’s fast-paced, competitive business environment. However, it’s also key to have the right tools and strategy in place to deliver the full value of a transformation. Most crucial is the switch to cloud-based or SaaS operations, with its capacity to implement digital services more quickly, on a larger scale, and more securely being essential in the effort to keep up with the pace of change.
The Dassault Systèmes 3DEXPERIENCE platform on the cloud leverages the capabilities of the cloud with computing resources to provide access to a complete suite of digital tools on a single platform. Apps and software available on the platform can meet a range of industry needs, including design and engineering, simulation, governance and collaboration, manufacturing and operations and marketing.
By integrating these tools into their business processes as part of their digital transformation journey, using best practices to ensure a smooth transition, users can deliver a better value to customer experience with greater flexibility and speed, finding creative and impactful solutions to meet their needs.