Describe the concept of digital transformation.

The concept of digital transformation encompasses the integration of digital technology into all areas of a business, leading to fundamental changes in how the business operates and delivers value to its customers. This transformation is not just about upgrading technology or adopting new tools; it involves a comprehensive overhaul of processes, culture, and values to ensure that technology is leveraged effectively to enhance efficiency, improve customer experiences, and drive innovation.

Digital transformation impacts various aspects of a business, such as its operations, customer interactions, and even the business model itself. It enables organizations to respond more rapidly to changes in the market, create more tailored offerings for customers, and utilize data analytics for informed decision-making. By embracing digital technology holistically, businesses can achieve greater agility, increase productivity, and foster a more connected relationship with stakeholders.

Other options like implementing new software or redesigning processes without considering the role of technology do not capture the essence of what digital transformation entails. Moreover, moving IT services to external vendors may be a component of a broader strategy but does not fully encompass the holistic nature of digital transformation. The correct answer accurately reflects the need for a complete integration of digital practices throughout the organization, leading to transformational outcomes.