While digital initiatives promise to improve the operational efficiency of any business and drive growth, it isn’t always clear what this looks like in practice. The trend towards digital transformation is picking up momentum and a number of digital transformation success stories have emerged over the past months and years. This article focuses on twelve inspiring real-life digital transformation success stories and illuminates key factors behind their successes.
Digital Transformations Explained
According to research from the global market intelligence firm IDC, digital transformation accounts for over 40 percent of all IT spending and is expected to top $2 trillion by the end of next year. These transformations cover all types of digital adoption ranging from cyber security, to artificial intelligence (AI) and automation. This leads to better gross margins and higher earnings for firms. A key aim of all digital transformations is to make businesses more efficient by expanding digital capabilities. The goal of such activity is to increase top-line revenue growth.
As reported by CIO, Joseph Pucciarelli, an IT executive adviser at IDC, believes that employees who work for a company that doesn’t invest in transformational technology will resort to outsourcing in order “to handle development needs.” According to Harvard Business School, businesses who fail to adopt digital technologies post an average three-year gross margin of 37 percent, while the leading digital adopters can post an average 55 percent gain.
Here are 12 real-world digital transformation success stories that are guaranteed to inspire you.
While outsiders may see few opportunities for a sandwich franchise to adopt technological innovations, Subway’s CIO Carman Wenkoff is far ahead of the curve. Wenkoff plans to completely overhaul the layout of future stores and introduce self-service kiosks to speed up sandwich ordering. According to reporting by CIO, Subway is bolstering its workforce with over 150 technology professionals to improve the company’s mobile app.
#2. Capital One
Capital One is a great example of a banking and credit card business that has reinvented itself by adopting the latest technology. Capital One was the first bank to welcome Amazon’s Alexa virtual assistant into its voice activated financial transactions system. Its mobile banking app was among the first such apps to support Apple's TouchID biometric software. According to CIO Rob Alexander, technology is “going to play a central role” is future banking services. Alexander has ensured that Capital One is just as good at building great software as it is at providing banking services.
In common with Subway and Capital One, Walgreen’s has joined the digital transformation trend by completely redesigning the its mobile app. After taking over the company’s digital strategy in 2015, CIO Abhi Dhar has taken dramatic steps to ensure that the company can meet the needs of its customers for efficiently. Walgreen customers can now use Apple watches to manage their medication schedules and can also earn and redeem loyalty points via Apple Pay.
Walgreen’s rival, CVS, has become another digital transformation success story thanks to the addition of a digital innovation lab to the firm’s Boston premises in 2015. The strategy favored by the CVS CIO Stephen Gold is for the innovation team to “fail fast”. Provided that ideas fail early in the process, Gold is fine with failure. This strategy has seen CVS consolidate its websites and mobile apps and greatly improve the customer experience. It has also led to the introduction of insurance card scanning via Apple watches as well as digital prescription scanning. With the help of startup ‘Curbside’, CVS is trialing a pick-up service that allows shoppers to pick up products in front of selected CVS stores.
No rundown of digital transformation success stories would be complete without mentioning Wal-Mart. A huge part of Wal-Mart’s transformation has been embracing open-source solutions. The centerpiece of the firm’s development has been introducing a new search engine and a range of cloud applications based on the OpenStack cloud platform. In order to let its programmers test and switch between different cloud providers, Wal-Mart launched OneOps. This additional flexibility to experiment with different technologies has been a key reason for Wal-Mart’s success.
In common with Wal-Mart, Target has started developing its own customer software. Throughout 2016, Target phased out the practice of outsourcing its software development and began bringing it in-house. This helped the store meet consumer demands by developing software that could better align inventory availability. A driving factor behind this change was the appointment of Mike McNamara in 2016. A former leader of the British grocery chain Tesco, McNamara helped to jumpstart Target’s digital transformation following its significant 2013 data breach.
#7. Armstrong World Industries
Armstrong’s digital transformation was spearheaded by CIO Dawn Kirchner-King following her appointment in 2015. She made the company more transparent so that shareholders could see how their money was being spent. By streamlining business operations, she was able to parlay the savings into transformative technologies such as cybersecurity and analytics. For instance, analytics currently helps Armstrong identify quality issues with its ceiling tiles.
According to Kirchner-King, a key reason for the success of Armstrong’s digital transformation was its move to using SAP Business One for ERP financial applications. Armstrong has completely overhauled their website, migrated management of its travel to Concur and also created both European and Asian CRM suites in order to expand its reach.
To compliment Armstrong’s digital transformation, Kirchner-King has also implemented stand-up meetings to create a “sense of urgency”. This, among other things, has helped turn Armstrong’s IT department from simply an “order-taking” center into a business that meets the needs of its customers.
#8. Putnam Investments
Eighth on our list is Putnam Investments, a leading provider of retirement services, mutual funds and institutional investment. CIO Sumedh Mehta told CIO that companies that embrace change “will become the digital companies of the future." According to Mehta, one of the driving factors behind Putnam’s digital transformation was having business partners who were willing to embrace new working styles. If people are excited to see the new ideas, Mehta says, they will have a “stronger engagement,” with the business.
So, how did Putnam achieve its transformation? Migrating apps to the cloud and investing in data analytics was a huge part of the equation, according to Mehta. In common with CVS’ development of their “digital innovation lab”, Putnam created its own “data science center of excellence”. The goal of this center is to “generate business insights,” says Mehta, and machine learning (ML) is a huge part of that. Putnam’s IT operations have become far more agile than before, with the IT departments able to build software in fortnightly cycles.
Another secret to Putnam’s success is an increased use of automation tools. Of particular help have been tools that can automate the workflow, such as Google-like search tools and Facebook-like collaboration tools. According to CEO Bob Reynolds, digital transformation work has “helped improve the performance” of Putnam’s services.
In 2010, Mark Schwartz was appointed CIO of the USCIS (the U.S. Citizenship and Immigration Service) and he immediately began working on the agency’s digital transformation. He divided the task into three strategies. Firstly, he wanted to digitize all of the paper forms and paper-based processes that the agency handled. According to reports, if the total amount of paper that the agency received each day were stacked on top of each other, its height would have been almost double that of the Statue of Liberty. Secondly, he wanted to transform the department’s approach into a more customer-centric model. Lastly, he wanted to centralize digital applications. Although the 2016 annual report from the USCIS’ official ombudsman indicated that there were still ‘significant issues’, the report gave a glowing account of the digital transformation that was taking place.
In an interview with CIO, Schwartz credited the transformation with a model called FADS, Flexible Agile Development Services. Under this model, top performing departments were allowed to expand and collaborate with others meaning that the digitization process was expedited. Schwartz’ decision to go cloud-first was another significant reason for the success of the USCIS’s transformation. He pioneers the exclusive use of Amazon Web Services for the agency’s IT systems.
Domino’s Pizza has undergone such a successful digital transformation over the past five years that it was lauded by Fortune contributor Kyle Wong as a “case study on how digital transformation leads to business value”. The cornerstone of the company’s journey was its ‘AnyWhere’ platform that lets customers place orders in a variety of ways besides the main website. Customers can tweet or text emojis and use almost any computing device to order their favorite pizza. According to Wong, Domino’s has built an e-commerce platform that could rival the best in the business and they’ve done it in less than five years.
No list of companies that have undergone digital transformations would be finished without including Sprint. Under pressure from its rivals, Sprint enlisted the help of VML to focus on analyzing data in order to improve the customer experience. So successful was Sprint’s mission to operate in a new way that its digital sales have grown by over 200 percent while its care costs have been reduced by 20 percent.
VML helped to transform Sprint’s main website into a thing of beauty by taking a utilitarian approach to web design. The redesigned website was so streamlined and user-friendly that VML reported a 300 percent engagement rate growth overall including a 9 percent lift in “gross new conversion on desktop” and 16 percent on mobile.
Besides the redesign, Sprint began using Elastic Stack open-source software to help it analyze the performance of the site. This approach helped the firm to pinpoint glitches and analyze bugs. Building on this, a Hadoop-based data lake of customer data helped the firm to target customers with relevant offers. For instance, users of Apple handsets would be sent Apple phone offers, helping to improve the transaction rate.
The final real-life digital transformation success story is JetBlue. They sought to adopt new approaches to customer services in 2016 when they launched the analytics and machine learning-driven Jetblue Technology Ventures (JTV). This led to a raft of technological adoption including self-service kiosks and check-in desks. The aim of their transformation has always been to improve the customer service by investing in startups that offer real value to airline customers. JetBlue has trialed near field communication as a replacement for self-service kiosks as a way of improving the value proposition for their customers.