defining digital | 6 Minute Read

What is Digital Strategy?

Written By

Christine Reyes

Note: This article was last updated November 2025.

Digital strategy is how organizations use digital technologies to strengthen or reinvent how they work, compete, and serve customers. It’s about using digital tools not just to support your business, but to drive it forward. In the future, every business strategy will, in essence, be a digital strategy.

Key Takeaways

Digital strategy applies digital technologies to business models, creating new differentiating capabilities.
In the future, all business strategy will be digital strategy, as technology becomes inseparable from operations.
A digital strategy defines both the vision (concept) and the roadmap of tactics (plan) for execution.
It differs from digital transformation (organization-wide cultural change) and IT strategy (technology-focused planning).
Selecting the right approaches is critical for organizations seeking long-term success and competitive advantage.
Effective digital strategy requires C-suite leadership, a balance of proactive and defensive approaches, and the ability to pivot.
Companies that align business objectives with digital initiatives build resilience and create sustainable value.

Evolving the Definition of Business Strategy

Digital strategy uses new technology and new ways of working to improve performance — either by creating new products or reimagining existing business processes. It’s about using digital tools not just to support your business, but to drive it forward, setting the direction companies will take to create competitive advantage, backed by clear tactics.

As digital technologies have become pervasive, business strategy and digital strategy are converging. While the term “digital strategy” still helps focus efforts on specific digital initiatives, all successful business strategies in the future will be, in essence, digital strategies.

"90% of CEOs believe the digital economy will impact their industry, but fewer than 15% are executing on a digital strategy.”
MIT Sloan & Capgemini, Joint Research

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Strategy as Concept and Roadmap

It’s important to remember that digital strategy is both a vision and an action plan.; the plan outlines how to get there. You can (and should) adjust your tactics as technology or markets evolve, but your vision should stay consistent, including:

The vision – or concept –defines what digital success looks like for your organization, and how it supports your business model.
The action plan – or roadmap - outlines the steps and digital initiatives required to bring that vision to life.

Your vision should stay consistent and include a clear commitment to your understanding of what digital means for your company.

Example use case:

Goal: Monetize internal productivity software.
Initial plan: Package it as a mobile app for individual customers.
Revised plan: License it to companies for integration into their own platforms.

The goal stayed the same, but the execution shifted. This illustrates how successful digital strategies maintain clarity of vision while allowing for flexibility to adapt the tactics over time.

Digital Strategy in the Context of Digital Transformation

Although often used interchangeably, digital transformation strategy and digital strategy are closely related, but differ in scope:

Digital transformation: Drives change across three critical areas — customer experience, operational processes, and business models. It requires culture change across the entire organization.
Digital strategy: Focuses on technology enablement, ensuring that investments in digital platforms, tools, and initiatives support business objectives.

Transformation is the journey; strategy is the map. A well-defined strategy ensures new technologies create the capabilities a company needs to become a digital business. It serves clear business goals rather than becoming shiny distractions.

For example, automating citizen services in the public sector or introducing AI-based quality control in manufacturing are both transformations – but each requires a strategy to determine which technologies, how to roll them out, and what success looks like.

By aligning digital transformation and digital strategy, companies can create a clear, data-driven program that transforms how they use technology to deliver value.

Yet many organizations still struggle to bridge the gap. Only around 35% of digital transformation initiatives actually achieve their intended value. That’s why a clear digital strategy is essential to turn ambition into measurable results.

"Don’t be fooled by some of the digital transformation buzz out there, digital transformation is a business discipline or company philosophy not a project.”
Katherine Kostereva, CEO and managing partner of BPM online

Digital Strategy vs. IT Strategy

According to Accenture, digital strategy transforms business activities with technology, while IT strategy transforms technology in isolation.

Aspect	Digital Strategy	IT Strategy
Focus	Business processes, models, and customer experience	IT systems and infrastructure
Scope	Digital initiatives across the organization	IT function
Goal	Growth, innovation, and competitive advantage	Efficiency and modernization
Approach	Customer- and business-driven	Technology-driven
Outcome	New products, reimagined processes, better results	Modernized infrastructure and systems

Digital strategy looks beyond infrastructure – it’s about experiences, data, and outcomes. Digital leaders have created high-quality customer experiences by shifting from IT-centric planning to data-driven, business-led strategies.

Where to Start

How do you build a digital strategy? It starts with the right questions. Rather than asking, “What’s our digital strategy?”, the Harvard Business Review suggests using these:

Does digital technology change the businesses you should be in?
How could digital technology improve the way you add value to the businesses you are in?
Could digital technology change your target customer?
Does digital technology affect the value proposition to your target customer?
How can digital technology enhance the enterprise capabilities that differentiate you from your competition?

These questions help you connect digital initiatives directly to your mission. To some companies, these questions will have obvious answers, especially those that have already experienced disruption or competition from new digital players. For others, this exercise identifies how digital changes what you do, and in turn, clarifies where to focus and prevents investing in technology that doesn’t create meaningful competitive advantage.

Start with your organization’s purpose, not the latest tech trend. By grounding your digital efforts in business goals, you’ll spend less time experimenting and more time driving measurable results. In fact, companies that take a strategic approach to transformation see strong returns – 56% of U.S. executives report that their digital initiatives have delivered higher-than-expected ROI.

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Common Elements of Digital Strategy

Choose a Leader — Leadership is essential. However, but choosing the right person will depend on company culture, structure and priorities. Responsibility may rest with the CEO or a Chief Digital Officer. The leader must have authority to align teams across the organization because without clear ownership, digital initiatives risk staying siloed or stalling.
Attack vs. Defend — McKinsey & Company emphasizes classifying opportunities and threats, then decide whether to lead the market or protect their core business. This helps companies decide whether to take a proactive (attack) or defensive approach to digital initiatives. Being proactive helps you stay ahead of disruption; being defensive helps you protect what matters most.
Take a Measured Approach — Digital strategy should incorporate a process for assessing whether new technology will really complement or grow the current business. Avoid rushing into projects just to appear digital. A measured approach ensures that new technology complements the business strategy and drives clear results. A thoughtful rollout prevents wasted effort and builds credibility with stakeholders.
Future Proof — Digital transformation aims to create organizations that can continuously reinvent themselves to keep up with changes in technology and customer expectations. A successful digital strategy should be visionary enough to anticipate future industry shifts and equip teams with the right tools to adapt.

High-Quality Digital Experiences

Delivering high-quality digital experiences is a competitive necessity. Companies now compete as much on experience quality as on product or price. A well-designed digital journey — from discovery to purchase to ongoing support — builds trust, loyalty, and differentiation. Businesses that invest in digital platforms like mobile apps, websites, and customer portals are better positioned to:

Improve customer experience through personalization and data-driven insights that anticipate user needs.
Increase sales by creating seamless, friction-free online interactions across devices and touchpoints.
Build long-term brand loyalty through consistent value delivery and relevant engagement at every stage of the customer journey.

These experiences depend on the effective combination of design, technology, and content. Leading organizations connect their CMS, CRM, and analytics systems to ensure that every interaction feels coherent, contextual, and effortless.

"We see our customers as invited guests to a party, and we are the hosts. It's our job every day to make every important aspect of the customer experience a little bit better.”
Jeff Bezos [via forbes.com]

This customer-centric mindset is what separates digital leaders from laggards. Every investment in design, usability, and personalization compounds over time to strengthen the customer relationship.

Digital Strategy Tools and Techniques

Building an effective digital strategy requires the right combination of tools, data, and processes. The best digital strategies use technology to connect people, content, and insights across the entire customer journey.

Organizations use a wide range of tools and techniques to achieve this:

Analytics platforms (e.g., Google Analytics) for real-time performance tracking, audience segmentation, for data-driven decisions.
Content management systems (CMS) that make it easier to produce, publish, and maintain high-quality online content consistently across channels.
Social media tools (e.g., Hootsuite) for targeted engagement, campaign optimization, and social listening.
Digital marketing and SEO tools – including PPC platforms, keyword analytics, and automation systems — to increase visibility, reach, and conversion rates.
Customer data and CRM systems that consolidate insights from multiple touchpoints, enabling personalized experiences at scale.

Emerging digital technologies such as blockchain, IoT, and AI provide new ways for companies to build value and create innovative business models. These technologies help companies automate manual processes, strengthen data integrity, and uncover new business models – from predictive maintenance in manufacturing to hyper-personalized recommendations in retail.

Managing Digital Change

Technology evolves faster than most business processes, and without effective change management, even the most promising digital initiatives risk losing momentum. Managing digital change means aligning people, culture, and technology so that transformation becomes part of the company’s DNA rather than a one-time project.

A core element of any digital transformation strategy is the ability to equip teams with the right skills, tools, and mindset. Employees at every level need to understand not just what is changing, but why — and how it contributes to broader business goals. This clarity builds confidence and reduces resistance.

To manage digital change effectively, organizations should:

Train and support teams with upskilling programs and easy access to learning resources, ensuring that new tools enhance rather than overwhelm daily workflows.
Communicate a clear vision from leadership, explaining how digital initiatives fit into long-term business objectives and why they matter to customers and employees alike.
Engage stakeholders early by involving cross-functional teams in pilot projects, gathering feedback, and demonstrating tangible value before scaling new systems.
Build adaptability into business processes through agile practices, iterative rollouts, and frequent evaluation of outcomes.

By managing change as an ongoing capability rather than a single milestone, organizations make digital initiatives more sustainable and impactful. When employees feel empowered, understand the purpose behind transformation, and see real progress, they become active participants in the company’s evolution. The result is not only smoother adoption of new technologies but also a culture built for continuous innovation and long-term growth.

Sustainability & Innovation in Digital Strategy

Sustainability and innovation are no longer separate priorities – they are interdependent pillars of a successful digital strategy. Digital leaders use technology not only to drive efficiency and growth but also to meet environmental, social, and governance (ESG) goals that define long-term competitiveness.

Sustainability is increasingly powered by digital tools. According to Deloitte, 55% of executives believe digital technologies are critical to achieving sustainability targets. From automating energy management in facilities to using data analytics for supply chain transparency, digital platforms help organizations reduce waste, lower emissions, and optimize resource consumption. Cloud solutions, IoT devices, and predictive analytics make it possible to track environmental performance in real time and integrate sustainability metrics directly into operational dashboards.
Innovation, meanwhile, ensures that digital strategy remains future-ready. McKinsey reports that companies investing in digital innovation see up to 20% higher revenue growth. Innovative organizations foster experimentation – they test new business models, use AI to predict trends, and create digital products or services that respond to evolving customer expectations. By combining innovation with sustainability, they balance progress with responsibility, ensuring growth that endures.

"A winning digital strategy requires new twists to familiar moves.”
McKinsey

Digital Ambition and Strategic Impact

Every successful digital strategy begins with a clear sense of digital ambition — a forward-looking vision that defines how technology will create value for the organization, its customers, and its partners. Defining this ambition sets the stage for measurable strategic impact. To translate ambition into impact, companies should:

Identify key goals like expanding online sales, improving customer experience, or launching new digital platforms.
Align digital initiatives with long-term business strategy.
Focus on the most impactful use cases to achieve both short-term wins and future competitiveness.

Organizations that take this strategic, data-driven approach will build business models capable of thriving across industries.

Measuring Success

Without clear metrics, even the most innovative initiatives risk becoming exercises in experimentation rather than engines of progress. Measuring success means turning ambition into accountability – using data to prove that digital investments are driving real business outcomes. Effective measurement begins with defining key performance indicators (KPIs) that align with strategic goals. These indicators should track both short-term wins and long-term transformation, providing visibility into how digital initiatives contribute to growth, efficiency, and customer satisfaction:

Revenue impact (digital channels, sales growth)
Operational efficiency (automation, cost savings)
Customer engagement (conversion, retention, loyalty)
Innovation outcomes (adoption of new products, time to market)

PwC found 75% of executives cite tracking ROI on digital initiatives as their top challenge (PwC, 2023).

Organizations that set clear goals, use data-driven tools, and track progress consistently are two to three times more likely to exceed ROI expectations.

Overcoming Challenges

From cultural resistance to technological complexity, challenges often arise not because organizations lack vision, but because transformation disrupts familiar ways of working. The key to success lies in anticipating these barriers and addressing them with clarity, communication, and structured problem-solving.

Some of the most common challenges include:

Adoption barriers: Employees resisting new processes
Integration costs: Modernizing legacy systems
Security risks: Compliance with data regulations (GDPR, HIPAA)
Measurement gaps: Difficulty assessing ROI

Practical solutions — such as mobile apps, self-service portals, and loyalty programs — can help organizations accelerate adoption, enhance customer experience, and demonstrate quick wins that build momentum for larger initiatives. Similarly, adopting agile methodologies allows teams to iterate quickly, learn from early results, and continuously refine their approach.

Summary Table: Digital Strategy vs. Related Concepts

According to Accenture, digital strategy transforms business activities with technology, while IT strategy transforms technology in isolation.

Aspect	Digital Strategy	Digital Transformation	IT Strategy
Focus	Technology applied to business models	Organization-wide change (culture, processes, models)	IT systems and technology investments
Scope	Business models, customer experience, digital initiatives	Entire organization	Entire organization
Goal	Growth, innovation, and competitive advantage	Agility and long-term reinvention	Efficiency and modernization
Leadership	CEO or Chief Digital Officer	C-suite executives across teams	CIO / IT management
Outcome	Innovative products, new business processes, measurable results	Cultural and organizational transformation	Modernized infrastructure and systems