Digital transformation is becoming a necessary and inevitable process that companies face in the digital age. Companies that fail to adapt to new market demands jeopardize not only maintaining a competitive advantage but also survival. There is still a great deal of misunderstanding of the notion of digital transformation, which is often equated with the notion of digitization. Digital transformation is a comprehensive process by which companies, with the help of information technologies, fundamentally change their business models, optimize processes, introduce a digital organizational culture, encourage the development of the digital skills of their employees and turn to continuous improvement. The research topic that the paper deals with is the lack of knowledge about the readiness to implement digital transformation, as well as about the effects and management of its implementation in companies in the Republic of Croatia. Secondary data sources and desk research methods were used to investigate and present examples of good foreign and domestic practice, and primary data was collected using in-depth interviews with representatives of companies, consulting companies and professional associations . Companies in the Republic of Croatia are aware of the importance of digital transformation for their operation and competitiveness, as well as of the positive effects it has on stakeholders, but they are still poorly prepared for its implementation. The biggest obstacles to the digital transformation of Croatian companies are resistance to change in middle and lower management and resistance to change in employees. Also, the challenge in the implementation of digital transformation is a long return on investment. Digital transformation requires significant financial and time investments, but in the long run it can contribute to increasing efficiency, reducing costs, greater employee satisfaction, creating added value for consumers, competitiveness and continuous improvement.