Digital transformation sounds great in theory. We know that a genuine digital transformation can provide a substantial return on investment, as long as it’s planned out in advance and strategically implemented. Still, the question remains: what does a successful digital transformation look like in practice, rather than on paper? Here’s some prominent examples to get you started.
Ford Motor Company
In 2006, Ford’s corporate bonds had been downgraded to junk status and they were fielding questions about bankruptcy. Now, Ford is a global powerhouse on the cutting edge of new technology. To call Ford a digital transformation success story is a distinct understatement.
Ford recovered by rallying itself around what it refers to as the “One Ford” initiative. In the early 2000s, Ford was structured as a loose confederacy of regional business centers and IT silos. From 2006 on, the company began taking measures to change this, integrating Ford into a single enterprise. They moved forward with clear goals: simplifying the company’s product line, focusing in on quantitative data and quality vehicles, and unifying the company as a whole.
On the IT front, Ford slashed the budget by a massive 30 percent. Their goal, however, was not to reduce expenses, but to take resources that were tied up in maintaining fragmented and complex legacy systems and free them for use in expansion and innovation. It was all of these measures together that gave Ford the agility and capital to invest in ground-breaking projects such as the much-lauded Ford SYNC and MyFord Touch.
Long known (and sometimes mocked) as the purveyor of high-priced luxury drinks, Starbucks naturally also struggled during the recession. Like Ford, though, Starbucks has bounced back largely through a masterfully orchestrated digital transformation.
Starbucks COO Kevin Johnson perhaps sums it up best: “Where others are attempting to build a mobile app, Starbucks has built an end-to-end consumer platform anchored around loyalty.” The company’s main innovation is their Mobile Order and Pay app. This is fundamentally a customer-first strategy, as it addresses the basic wants of the consumer: convenience, line avoidance, and so forth. Coupled with their extensive loyalty program, the app gives Starbucks the perfect venue to upsell and market to consumers. Furthermore, the app funnels back massive amounts of user data to the company, allowing them to better understand their customers’ habits and desires.
Starbucks has certainly invested large amounts of money into their digital transformation, with their technology and partnership spending increasing in just the past year from $145 million to an estimated $250 million. But their efforts have more than paid off, as not only have their profits soared, but they’ve seen an “unparalleled frequency” in repeat customers.
You might not be as familiar with CaixaBank as with Ford or Starbucks, but it’s not only the number one bank in Spain, it’s also been hailed as the most innovative force in banking today. CaixaBank themselves describe their people-first digital transformation as a four-pronged strategy.
The first component of their strategy focused on what CaixaBank calls “digital proximity,” wherein they simplified the relationship between clients and branches by merging channels of communication and functionality. Examples include such tools as “The Wall,” which can be used for chat, file sharing, and more, or “Ready to Buy,” which dramatically speeds processes such as loan approval.
Secondly, CaixaBank has used their digital efforts to provide clients with more detailed and to-the-minute reporting of financial information. With servives like ReciBox and CardBox, clients have real-time access and alerts, as well as analyses of costs and spending patterns.
The third prong should be a familiar one: streamlining backend processes in both speed and integration. Commented CaixaBank’s Head of Electronic Channels Benjamí Puigdevall, “Digital user experience requires a new paradigm for how internal processes are executed.”
Finally, CaixaBank has also implemented digital platforms for both client and employee feedback. This not only tells the bank how well their current strategies are working, but also helps them decide where to direct future efforts.
These are only three out of hundreds of businesses that have used digital transformation to successfully revamp their business strategy. Nonetheless, any one of them can make an invaluable case study to use when deciding how best to implement digital transformation in your organization.