What are the types of digital transformation | Software Development Company

Types of digital transformation

Digital transformation doesn’t mean the same thing for all companies, and viewing it as a one-size-fits-all process could be overwhelming. There are four main types of digital transformation that organizations should consider taking advantage of in their own transformation strategy. It’s critical to realize that digital transformation is not necessarily a single, black-and-white destination in the form of a product or offering, but instead requires a long-term commitment and can evolve throughout the journey.

 

1. Process Transformation

Companies can revise internal processes to lower costs, improve quality and reduce cycle times. Adopting cloud connectivity helps link disparate processes and locations. For example, implementing robotic process automation can transform manual tasks found in procurement, supply chain management and other administrative functions. Modernizing your logistics network and supply chain by digitizing these processes and integrating machine learning and artificial intelligence helps to recognize and shape data patterns into actionable insights.

 

 

2. Business Model Transformation

The business model transformation aims to fundamentally change the way companies deliver value for customers. For example, Netflix made the switch from mailing DVDs to online streaming, while Blockbuster failed to make the transition, which ultimately led to the latter company’s eventual fate. Technology OEMs are also switching from a sales and support model to XaaS, where the “X” may be hardware, storage capacity or applications.

Technology companies can reshape their go-to-market strategy and support their customers’ digital transformation efforts with the flexibility to select technology that best suits their needs. Customers often signal their readiness for a different type of relationship through their purchasing patterns.

 

3. Domain Transformation

Organizations typically adopt new technologies to redefine their products and services. They might extend current services to a new customer base or develop entirely new technology-enabled offerings. For example, offering equipment on a rental basis rather than purchase-only enables you to reach a previously unserved segment of customers who may only need your technology temporarily.

As another example, companies that sell industrial equipment can expand by providing digital solutions to their existing customer base and customers using other equipment. CNH Industrial, a manufacturer of commercial, construction, and agricultural equipment, developed its own suite of fleet telematics technology to help owners optimize operation and maintenance processes and connect them with the company’s dealer network for service.

 

 

4. Cultural/Organizational Transformation

Embracing a digital-first culture enables organizations to adopt agile workflows, develop a bias toward testing and learning as well as support decentralized decision-making. However, a successful transition to a digital-first culture requires redefining mindsets and processes while also incorporating new talents and capabilities.

A typical mindset shift alters from managing production output to focusing on customer service and innovation. Often, the cultural shift occurs organically during other transformation initiatives as internal teams adopt digital workflows and recognize the power of changing organizational norms.

 

Examples of digital transformation

Walmart

Walmart order processing transformation. Walmart Voice Order Comes to Google Assistant

Walmart is getting into the voice shopping game! On April 8, 2019, the company announced Walmart Voice Order with Google Assistant, a direct challenge to Amazon’s dominance in the voice shopping world. That may not be an easy row to hoe, considering the Amazone owns the entire ecosystem–including all of its user data–but some think there’s a reason to be bullish for Walmart.

 

Nike

Nike transformed its in-store business processes to blend digital experience with the potential of brick and mortar ‘concept’ stores to engage customers with the brand. Using the Nike store app, customers can scan the clothes they want to try on using a QR scanner, for example, and have them ready and waiting to try on.

 

Shell

In 2004, Shell committed to the long-term Shell Downstream One transformational project in the face of tanking share prices. The project involved a massive overhaul of key business systems, including financial processes and the distribution network, with stakeholder antipathy anticipated, addressed, and assuaged.

 

Tesla

pushed many car manufacturers into a new type of competition. With the rise in concerns over global warming and the world’s overreliance on oil, the automotive sector has recently embraced a move towards electrification and autonomous driving.

 

Smart Eye

Taking it a step further, technologies such as Smart Eye deliver AI-based driver monitoring systems and automotive interior sensing solutions. These technologies make driving far safer by detecting when drivers are distracted, falling asleep, or otherwise putting themselves and their passengers in danger.

 

Dominos

Take Dominos for instance. In 2011, Domino’s set out to make it easy for an individual with a smartphone to order a pizza within the 17 seconds it takes for a traffic light to turn green. Dominos transformed from a pizza company into a tech titan from that moment.

 

Carvana

Carvana started with the ability to buy a car completely online, from start to finish, delivering the car to your home and giving you a trial period to test it out. But they still found ways to innovate further, with Carvana vending machines — essentially unmanned towers of cars where consumers can pick a car and drive away with it.

 

Hyundai

Another example is Hyundai, which recently acquired Boston Dynamics, a robotics company. The intention is to take their cars into the metaverse and become a trailblazer based on new, advanced robotics capabilities.

 

UPS

A great example of digital transformation is UPS. The American shipping and supply chain management company used digital tools to synchronize its operations and logistics strategy to better meet customer demand.

Now, the two customer experience challenges UPS faced were:

  • Fast delivery
  • Real-time package tracking

 

McDonald’s

Rather than “make fast food, faster” the McDonald’s team wanted to reduce the customer experience gap by innovating the customer journey.

They decided to do so by focusing on CX (customer experience): Improving in-store, drive-thru, and home delivery (ordering, payment, mobile) systems.

In McDonald’s case, digital technology such as interactive ordering units, AI drive-thrus, and smart mobile app experiences have helped them reduce that customer experience gap.

 

Netflix

A mistake many executives make is they focus so heavily on the product, that they forget about the customer need it’s serving.

As the customer experience evolves, so must your product. If not, you risk the customer experience gap widening until eventually, you’re left irrelevant (and without any customers).

So, how was Netflix able to survive when Blockbuster did not?

Because they never lost sight of the true value they offered customers; delivering affordable home entertainment.

They were able to identify a shift in customer needs and use digital tools to close out that customer experience gap, transforming from a DVD mailing service to a fully-fledged digital media giant.

 

Spotify

Sometimes to meet customer needs, organizations must be willing to adapt, change, and scale their processes internally.

One of the standout examples of this is Spotify.

The music streaming service doesn’t operate under a traditional, hierarchical structure. Instead, they’ve opted for a model that encourages experimentation, efficiency, and accountability.

The “Spotify Model” is similar to an Agile “Matrix Organizational Model”; engineers and team members report to a single area (product owner) but work within a cross-functional team.

 

IKEA

If it can be done on this level, it can be done on almost any other level. IKEA’s digital transformation is one sure to inspire companies that digitization is possible, no matter your size or industry. To conclude this list of companies who successfully – and continue to succeed – in their digital transformation, IKEA is a stellar example. Its transformation, similar to LEGO and GameStop, truly set off when the addition of tech-oriented leadership sparked a culture change. In the person of Barbara Martin Coppola, IKEA found its Chief Digital Officer.

 

GameStop

GameStop is one of the most famed companies in the world when it comes to stories from Wall Street and one worthy of our list for digital transformation company examples. At GameStop people can buy – and trade in – new and used computer games.

 

Adobe Creative Cloud

The road to digitalization is not for the faint of heart. What starts as a digital transformation strategy in the boardroom that promises financial sustainability, in reality, means difficult decision-making that affects both top and bottom lines. This is what Adobe experienced too.