A digital transformation is an overhauled, digital-first approach to how a business is run. The digital world is evolving quickly with new products and digital technologies that require vigorous digital transformation initiatives. The main goal of a digital transformation is to use new digital technologies throughout all aspects of a business and improve business processes. By using AI, automation, and hybrid cloud, among others, organizations can drive intelligent workflows, streamline supply chain management, and speed up decision-making.
Why digital transformation?
Unlike a typical business transformation, implementing digital transformation is not a one-time fix. Rather, it’s the start of a new foundation for a business that seeks to keep up with new technology and evolve with the ever-changing outside world.
In a moment’s notice, customer expectations and market conditions can change. Your business needs to be prepared to handle such an event. Staying up to date with the digital age is among the benefits of digital transformation. By updating a legacy system your business is embracing digital innovation and new business models.
Digital transformation can be a risky move, but if done well it can streamline your business onto a path for a better, smarter future. A recent analysis from the IBM Institute for Business Value asked company executives “[…] how they use data to create performance baselines and to understand how applying technologies—for example, cloud, AI, generative AI—might materially improve performance in the parts of the business that generate income.” What they found was that 9 out of 10 organizations interviewed “[…] do not have a way to represent how they deliver their most important products and services from end to end, nor do they have the performance data necessary to create a baseline to improve that performance. (They might do so if pushed, but they are not being asked to do it).”
An example of a company that underwent a major retail transformation is Amazon, which changed the way consumers shop for everyday items. There are several examples, or case studies, of successful digital transformation across a range of different industries. These real-world examples give a glimpse into the digital transformation process for both stakeholders and business leaders.
Digital transformation technologies
Before exploring digital transformation examples, it’s important to understand the diverse digital technologies available. Companies are becoming more reliant on data analytics and automation to enable profitability and customer satisfaction. There are many different digital technologies that might play a role in an organization’s digital transformation strategy, depending on the needs of the business. Specifically, there are a few digital tools that are continuing to evolve and show that they’ll be a fixture to digital transformation into the future.
Artificial intelligence – Artificial intelligence, or AI, is a digital technology that uses computers and machines to mimic the human mind’s capabilities. The AI learns from what it sees around it and when combined with automation can infuse intelligence and real-time decision-making into any workflow. The AI technology drives innovation to smart products and a more pointed focus on customer and user experience. An example is machine learning, which enables a computer or machine to mimic the human mind. Another is augmented reality technology that uses algorithms to mimic digital information and understand a physical environment.
Hybrid cloud – The hybrid cloud environment creates a single, optimal cloud for public cloud private cloud and on-premises infrastructure. It takes an organization’s on-premises data into a private cloud infrastructure and then connects it to a public cloud environment, hosted by a public cloud provider. Examples include AWS®, Google Cloud Services®, IBM Cloud®, and Microsoft Azure®.
The cloud computing infrastructure bridges a gap for cloud resources, making it easier and scalable for an organization to run every workload. This operating model increases operational efficiency and can better organize big data. An organization is not locked into a single platform with hybrid cloud, which sets up an organization for a successful digital transformation.
Blockchain – A blockchain is a digitally distributed, public ledger or record of electronic transaction. The main benefit of blockchain is total transaction transparency for those employees who require it and security from others who didn’t need access. This type of trust is an example of how blockchain can foster a stronger community, internal and externally.
Other technologies include:
- Internet of Things (IoT)
Examples of digital transformation
Modernized tools example: Frito-Lay
Snack food giant Frito-Lay decided to optimize its productivity across its systems and improve service to retailers with Salesforce. Frito-Lay’s digital transformation efforts enlisted the help of user-focused experts from IBM® Consulting and the IBM Salesforce practice. Together, they worked to expand the Frito-Lay e-commerce strategy and make a more streamlined workflow for frontline employees.
Through extensive user research done by IBM Garage™ and IBM iX® team of experts, the Frito-Lay and IBM team came to two solutions built on Salesforce platforms. These two solutions created modernized tools for both retailers and employees. ‘Snacks to You’ is an advanced e-commerce solution that helps small businesses simplify the ordering and delivery process. ‘Sales Hub’, powered by Salesforce Service Cloud, is the second solution the team came up with and works to simplify logistics on the back-end. These solutions focused on optimization for the users and required a rethinking of how processes were done in the past.
Transformed technology infrastructure example: Water Corporation
Water Corporation, a state-owned entity that is located in Western Australia, maintains pipelines that deliver water, wastewater, and drainage services to a region that spans roughly 2.6 million km. The organization relies on SAP architecture to run its critical resources and recognized its on-premises servers that were supporting the SAP infrastructure were out of date. Instead of purchasing more hardware, the organization shifted to a cloud-based strategy.
Water Corporation selected IBM Consulting to plan this extensive migration. They chose Amazon Web Services (AWS) to power its critical SAP systems and IBM watsonx™ Code Assistant technology to yield code recommendations for automation functions supporting the migration and upkeep of the SAP environment.
IBM Consulting and Water Corporation estimated the new automation strategy saves the business roughly 1,500 hours of manual labor that is associated with infrastructure support. It also cuts carbon emissions by roughly 150 metric tons per year. The shift to a new SAP environment was a digital transformation that required immense coordination between Water Corporation and its partners, but yielded a worthwhile result that will ultimately set them up for a successful digital future.
Re-imagined customer experience example: Camping World
The COVID-19 pandemic caused an unprecedented number of customers for Camping World, the leading retailer of recreational vehicles (RVs), revealing some issues with their existing infrastructure. The company, which relies on its contact centers and customer service, found holes in its agent management and response times as business grew.
Camping World sought out IBM® Consulting to address its concerns. The answer was a human-centered solution to allow its operation to scale. The retailer ended up settling on a cognitive AI tool that was developed by IBM to modernize Camping World call centers for a better customer journey from start to finish. The solution is powered by IBM watsonx™ Assistant and is integrated with a conversational cloud platform called LivePerson. By expanding the question and telephone capabilities Camping World is better suited to serve its customers, sending the simpler questions to the virtual agent, named Arvee rather than a live agent. Arvee frees up the live agents for more complex questions while still providing all customers with the answers that they need.
Intelligent, data integration platform example: State Bank of India
State Bank of India (SBI) saw its customer base grow their wealth and found they were looking for new opportunities. The SBI is the country’s largest public sector bank and the financial foundation of India. Therefore, it was important that the institution remains ahead of the curve and lean into the digital future.
To create a mobile financial marketplace, the bank used the IBM Garage Methodology. Bank representatives worked closely with IBM Garage designers, architects, and analysts to collaborate across all disciplines of the project and analyze metrics. The bank’s vision was a one-stop-shop that addressed all a customer’s needs in the form of a mobile app. They termed it ‘YONO,’ or ‘You Only Need One’. IBM worked with SBI to design workloads and build a security system that might support the solution and further enhance the customer experience.
Digital transformation and IBM
While digital transformations require investment and ultimately change how an organization conducts its business, there are many benefits if done correctly. Those organizations that succeed at digital transformations will stay ahead of the competition, drive better relationships with employees and customers and be better prepared for what may come.
Emerging technology and social forces are creating new customer experiences that result in changing expectations and demands and disrupt business models. IBM Consulting professional services for business help organizations navigate an increasingly dynamic, complex and competitive world. We help them align digital transformation with their business strategy to create competitive advantage and a clear focus on business impact.