What is Digital Transformation for Business?
Digital transformation uses technology to evolve how businesses operate. It can involve changes to infrastructure, processes, and business culture, with the goal of adapting the business to the digital economy and new customer requirements.
From a business perspective, digital transformation is a matrix function that touches all departments of an organization—finance, sales, marketing, product, customer service, human resources, and more.
The changes carried out by each of these departments have a common goal—to improve the way the business interacts with its customers, improve the customer experience, and make the organization more competitive.
Digital transformation is customer focused, but its ultimate impact is on the business itself—it should generate a measurable lift in business metrics like revenue, profitability, and market share. In this article we’ll showcase five stories of major organizations that carried out digital transformations and generated impressive results.
In this article
5 Examples Of Successful Digital Transformation In Business
Here are a few real life examples of companies that took on ambitious digital transformation initiatives, and succeeded in driving business results.
Target is one of the ten largest retailers in the USA, with over 300,000 employees. The company introduced online ordering and launched a digital marketing initiative to grow sales. In addition, physical stores were redesigned to help customers discover products more easily, and explore in store while buying online.
The result: Target began its digital transformation in 2006 and saw stock price increase from $53 to $88, with revenues growing by $6 billion.
Hasbro is a maker of toys and games, with over 5,500 employees and annual revenue of over $4 billion. The company made a strategic change in 2012, switching its traditional focus on children, and starting to market to parents.
It created large-scale data driven campaigns, supported by social media. The same data was used to better understand parents, recommend the most relevant games for their children, and help them seamlessly purchase via multiple channels.
Results: While the marketing campaigns grew Hasbro’s marketing expenses by over 10X, it also grew sales by $1 billion, and share price increased from $36 to $109.
Honeywell is a Fortune 100 manufacturer that operates in multiple industries, including aerospace and building technologies. Early in its digital transformation, Honeywell cut its operations from eight markets to six, to improve quality and make it easier to apply digital strategies.
Honeywell launched a digital transformation group within the company, which led innovations like IoT-connected devices, data-driven product offerings, and advanced industrial process control. Customer data was analyzed and used to improve product offerings, help customers make better decisions, and make manufacturing processes more efficient.
Results: Honeywell grew revenue from $40 to $43 billion in 2018 (although revenue dropped to $38 billion later) and share price grew from $95 to $174.
Home Depot is a home improvement retailer with over 400,00 employees. In 2017, the company set out to provide an improved eCommerce experience, tied closely to other channels including physical stores.
The company created a group of 1,000 employees with digital and customer experience skills and bolstered the IT department, improving its ability to gather and analyze customer data. One of the uses of this data is to save costs through predictive analytics of local inventory levels.
Results: Stock price grew from $135 to $215, and revenue increased by over $17 billion.
Microsoft is the world’s largest software company with over 166,000 employees. Microsoft embarked on a new digital strategy to face competition from players like Apple, Amazon and Google. Its main focus was to build a cloud computing business that would provide easier access to its technology, both for individuals and larger organizations. It built Microsoft Azure, which became the world’s second largest cloud provider, and strengthened its market position by forging partners with other technology giants, such as SAP, VMware, and Oracle.
Results: Share price grew from $38 in 2014 to over $136, and market capitalization is now over $1 trillion.
How Does Digital Transformation Drive Business Growth?
Here are several ways digital transformation can have an impact on an organization’s success in the marketplace.
Delivering a Seamless Digital Experience
Customers have grown used to seamless, convenient digital experiences in their personal lives. They expect to have the same experience in the workplace, or when interacting with a company.
Companies who can deliver agile IT services, responding quickly to customer requirements, will thrive. Successful organizations will focus on user experience, performance and security of digital services, to ensure they meet the requirements of the digital consumer.
Making Better Decisions
The digitization of business processes and data is allowing companies to make better, faster decisions. By leveraging data analytics and machine learning, businesses can now use historical data to predict future outcomes.
This is a huge opportunity for organizations who can harness the power of digital transformation and turn data into insight.
Improving Employee Productivity
Many companies are struggling with talent shortages – particularly in technical roles. Digital transformation will allow companies to get more out of their existing workforce, by making it easier for employees to do their jobs – and also providing employees with a more engaging workplace environment.
For example, many companies have implemented self-service IT portals that allow employees to request computer support or access software licenses without having to call the help desk. This has reduced the load on IT staff, while improving employee satisfaction.
Improving Inventory Management and Pricing
Digitization is helping retailers manage inventory and pricing more effectively. By digitizing the supply chain, retailers can better understand consumer demand, which allows them to adjust inventory accordingly. This helps them avoid excess inventory and over-pricing on popular items.
Personalizing Customer Experience
Digitization is allowing companies to increase revenue by improving customer experience. For example, a forward-thinking retailer can use digital transformation to improve customer service by providing personalized recommendations based on previous purchases. This type of personalization can help an organization provide better service and ultimately sell more products.
Best Practices for Digital Transformation in Business
Here are a few best practices you can use to more effectively implement digital transformation in your organization.
Invest in a Future-Proof Infrastructure
Digital transformation projects must build an infrastructure for the long term. It is best to start with technology assets the organization already has. After making the best use of your existing assets, consider how to expand your digital infrastructure. Common options include:
- Migrating to public cloud services
- Adopting software as a service (SaaS) as a replacement for legacy applications
- Transforming monolithic applications into microservices
- Adding data scientists or developers with new skill sets to your team
Don’t Underestimate the Human Factor
The people who will be using and supporting the new digital infrastructure are the most important part of the digital transformation project. They will be the ones who will make it a success or failure.
Take time to understand their daily workflows, and make sure they are involved in the design and development process. Involving users in this way will ensure that they are more productive and satisfied with the new digital tools.
Use Agile Methodologies
Digital strategies and technologies move fast. By using agile development methods, you can update the digital strategy to respond to competitors, customer requirements, and technical challenges. Develop products and platforms in an iterative manner, releasing them to the market frequently to get fast feedback. Encourage employees to innovate and take controlled risks.
Put Data to Work
Make sure your organization can collect quality data from customers, IT systems, internet of things (IoT) devices and other relevant sources. Ensure teams have the technologies and skills to process this data in a timely manner and use the insights to guide digitization projects. Also use data to drive automation, personalization and business decisions in real time, responding to customer needs and market changes.
Digital Transformation for Business with Perception Point
While going through a digital transformation process, businesses need to focus on processes that help their teams to work more quickly, and more effectively. Perception Point supports digital transformation at scale by providing enterprise-grade security to protect email, browsers, cloud collaboration platforms and proprietary apps from all types of cyberattacks.
An all-included managed Incident Response service is available for all customers 24/7. Perception Point’s team of cybersecurity experts will manage incidents, provide analysis and reporting, and optimize detection on-the-fly. The service drastically minimizes the need for internal IT or SOC team resources, reducing the time required to react and mitigate web-borne attacks by up to 75%.
Customers deploying the solution will experience fewer breaches, while providing their users with a better experience as they have the freedom to browse the web, use SaaS applications that they require, and access privileged corporate data, confidently, securely, and without added latency.
Contact us for a demo of our Advanced Threat Prevention solutions, today.