How can you break into this fast-growing field? It might all come down to developing a few crucial, in-demand digital skills.
A 2017 study from the International Data Corporation found that digital transformation spending would reach $1.7 trillion worldwide, a 42 percent increase from 2017. That’s largely because 59 percent of companies remain in a stage of digital transformation maturity the report called a “digital impasse,” meaning much work needs to be done to reach the next stage of readiness for the digital economy.
Not all digital transformations, however, are created equal. A McKinsey study found that some companies weren’t getting the ROI they wanted from digital initiatives, largely because they were investing in the wrong places or investing too much or too little in the right ones.
“Improving the ROI of digital investments requires precise targeting along the dimensions were digitization is proceeding,” the report read.
With that in mind, let’s take a look at five companies that did digital transformation the right way.
Who would have expected that a nearly 100-year-old company best-known for postage meters and other mail equipment could become a model for the power of digital transformation?
The company created its own Commerce Cloud to create a digital business that capitalizes on their digital identify, locate, communicate, ship, and pay capabilities. The company now brings in more than $1 billion in annual eCommerce business, and new clients include eBay – which has used Pitney Bowes software to automatically calculate international duty rates – and Twitter, which uses the company to track the location of its users.
Net income rose from $143 million in 2013 to more than $400 million in 2015 as Pitney Bowes reinvented itself as a global technology company, although its executive leadership still stressed that patience is a virtue in such a major undertaking.
“We have continually decided to choose the alternative that creates the most long-term value, even if it creates short-term disruptions,” said President and CEO Marc Lautenbach. “I think most companies bow to that pressure, and that’s why most companies don’t end up transforming themselves. They make decisions thinking something is the right long-term bet and then, when things start going the wrong way, they don’t have the fortitude to stick to it.”
It makes sense that the luxury carmaker would never want to lag behind the competition.
Perhaps that’s why the company announced an ambitious digital transformation strategy that would position the venerable German company as a worldwide leader in digital mobility solutions.
The company’s aim in the medium term is to generate a double-digit percentage of sales through digital services, with a focus on three key areas: products and services, including the Connected Car, automated driving and mobility infrastructure; sales digitization and customer interfaces, both online and in retail; and the company itself, with an eye for creating state-of-the-art workplaces.
Although it’s early in the process, executives at the 87-year-old company already seem energized by the change.
“We are growing in regions we could not have imagined just a few years ago,” said Wolfgang Porsche, Chairman of the Supervisory Board of Porsche AG. “The digital transformation determines the way in which we think. Young, differently minded people who are entirely unlike us are changing our mindset. What do customers expect from cars both now and in the future, and from mobility in general? The answer is that everything must be re-evaluted.”
Unlike some of the other companies on this list, the consumer credit reporting agency had only been around just over 20 years when it recently decided to undergo a digital transformation in 2017.
Still, the effects were stark. Partnering with Finicity, Experian introduced new technology that allowed for real-time income and asset verification for more than 80 percent of all financial accounts, rendering most archaic paper-based processes obsolete. The new technology had the added benefit of improving accuracy and reducing fraud risk for lenders, while loan approvals that once took as long as 70 days could be approved in as few as 10.
“For consumers, this digital transformation of key steps of the loan underwriting process can mean increased time and money savings by helping to decrease the cost of lending,” said Experian President Alex Lintner.
“We take pride … that we’re the industry leader in technological innovation to reduce pain points for consumers and build better products for our clients.”
20th Century Fox/Disney
In the case of the venerable film studio 20th Century Fox, a digital transformation helped lead to a major merger.
In 2017, the organization shifted to a consumer-oriented focus, which veered from the past, when B2B partners such as retailers, exhibitors, and producers were more of a priority. With the help of Salesforce’s digital accelerator Salesforce Ignite, 20th Century Fox updated its applications, created a new strategic vision, and most crucially, adopted new technology and approaches to tracking and improving user journeys.
“We’re a film studio that has a deep heritage creating compelling and entertaining content,” said John Herbert, Chief Information Officer at the time for 20th Century Fox Film. “When you think about digital transformation, the media industry has been at the forefront because it’s not just another dimension of our product. Our entire business has been transformed.”
That successful digital transformation collided with another in July 2018, when Disney acquired 21st Century Fox for a staggering $71.3 billion.
In fact, that acquisition was a part of Disney’s own digital transformation strategy, one that revolves around acquiring exclusive access to premium content for Disney’s upcoming streaming platform, which is expected to compete with Netflix.
When it came time for a digital transformation, this famous toy company wasn’t playing around.
Until late 2012, Hasbro’s approach was to market toys to children even though it was parents who were actually buying the products.
Then the company behind Monopoly and Play-Doh decided to take a deep dive into data to reimagine their advertising and social-media approach. In doing so, they made an important discovery: the company had been missing a major opportunity by not paying attention to moms and dads.
By leveraging an ad tech platform, Hasbro began driving sales by advertising products toward the end of a customer’s online journey – or when parents were checking out. The company increased ad spending by 1,100 percent, and sales grew by up to $1 billion, finally reaching $5 billion in 2016 for the first time in Hasbro’s nearly century-long history.
“We started really understanding where consumers were shopping,” Ginny McCormick, the VP of Integrated Media and Promotions, told AdWeek. “We’re now leveraging analytics to create a frictionless and relevant experience for the consumer.”