Digital transformation (DX) means implementing technology into your business processes to achieve organizational growth. Its benefits include process efficiency, increased customer satisfaction, and better employee engagement.
However, it can be hard to get right and Digital transformation initiatives can easily fail.
Global spending on DX doubled from 2017 to 2022 (as data from Statista shows), and shows no sign of slowing. So any business investing their precious resources into digital transformation has got to learn from the best examples.
That’s what we’ll do in this article by looking at how IKEA, Armstrong, Capital One, Microsoft, and Nike all found a way to maximize the outcomes of their digital transformation projects.
Using high-impact digital adoption strategies, these companies set a great example for any organization that wants to improve its digital capabilities.
What is digital transformation?
When a company goes through a digital transformation, it implements digital solutions to make a positive change to the organization. Transformation projects can be tiny, vast, or any size in between.
Digital transformations can look very different between companies. It might be a new standalone online portal, a centralized system to manage human resources, or a complete re-configuration of a business. But they all count as digital transformations.
Digital transformation does not happen in isolation from other business activities. Every digital transformation requires an effective and appropriate strategy. This means looking at the entire company and thinking about what changes would benefit the most people. Once you have your goals, you can start developing a plan to make your transformation happen.
Digital transformations can be challenging to implement, but the rewards can be great. With a successful transformation, you can improve your company’s bottom line and make it more agile and responsive to change.
However, at the start of a project it’s difficult to predict the difference between success and failure. But what do industry insiders have to say about the building blocks of a great digital transformation? Let’s take a look.
What are the four areas of the digital transformation process
There are many competing ways of judging how to deploy new digital technologies effectively and efficiently. However, the four main areas of digital transformation include:
- Customer Experience. Digital transformations should improve the service that customers get from a company. Even when the transformation affects internal processes, management should focus carefully on the end result.
- Data & Analytics. Companies can find ways to gather precise data across their systems, providing a stable basis for future decision-making.
- Cloud Computing. The cloud is a vital tool for digital transformation, enabling software provision and data sharing that would have been unthinkable a decade ago.
- Mobility. Software and digital technology are used across many devices. Digital transformation does not just happen on desktop PCs. It travels wherever processes can be improved.
A small-scale digital transformation may develop just one of these areas. But a truly digital workplace will excel in all of them.
The value of digital transformation
There are huge benefits of digital transformation in 2023.
As with any innovation, they are intended to improve operational efficiency, increase organizational agility, and create a competitive advantage that leads to revenue growth.
The specific improvements of a digital transformation journey will depend on the business, the transformation strategy, and the intended outcomes.
However, some benefits can include the following:
- Improved customer experience
- Greater market reach
- More efficient supply chains
- Greater employee productivity and job satisfaction
- Well-targeted marketing campaigns
In short, digital transformation can positively impact every area of a business.
The state of digital transformation in 2023
In 2023, businesses are continuing to imagine and re-imagine what digital transformation should look like. Across different industries, we see improved services, better customer engagement, and company relevance. So, digital laggards now have many examples for inspiration and guidance.
Some recent transformations include:
- McDonald’s in Italy streamlined their procurement processes through an online portal;
- Domino’s Pizza utilized the internet of things to help customers place orders;
- Hasbro used data about their customers to improve their advertising and marketing;
- UCIS reduced paper use by adopting digital applications using AWS cloud computing.
These cases illustrate the varied roles technology can play in an organization. The best companies will not be interested in “off-the-shelf” solutions. Instead, they will find new ways to deal with their fundamental problems.
The top digital transformation success stories
If you want to know how companies adapt to a changing digital landscape, it’s essential to look at some case studies. From the many success stories out there, the following five companies are incredibly successful examples of large-scale digital transformation that are highly relevant for 2023. Through Ikea, Armstrong, Capital One, Microsoft, and Nike, we get a much better view of how digital transformation works.
IKEA dominates the global furniture industry. The company has done this by adapting to new working practices. Their digital adoption strategy has recently helped them keep their competitive advantage over other companies.
IKEA’s stores used to be very different from an eCommerce platform. But when they started to prioritize the digital side of their business, online sales tripled. Their brick-and-mortar stores now act more like fulfillment centers than retail outlets. Even within stores in selected countries, customers can now pay for their purchases without going through the checkout.
The example of IKEA shows how a full digital transformation process can help a company to stay relevant. If you want to know more, take a look at Thomas Stackpole’s write-up in the Harvard Business Review.
Armstrong World Industries
AWI is one of the USA’s leading manufacturers of ceilings and walls, bringing in a revenue of over $1 billion in 2021.
Armstrong’s digital transformation started by improving weaknesses in its financial processes. This meant investment in Enterprise Resource Planning (ERP) software, transparent spending, and attention to cybersecurity.
These improvements became the basis of further digital strategies to support customers through their buying journey, with a massively improved website and customer services.
For Armstrong, the digital transformation started with financial systems but ended up providing a fully improved customer experience.
Capital One has used new artificial intelligence technologies to provide brilliant customer service. As one of the first banks to manipulate Amazon’s Alexa-enabled devices, their customers can now quickly get the information they need when they need it.
By asking, “what’s my balance?”, “How much is my next car payment?” and “what’s the due date on my next credit card bill?” customers get answers without even logging in to online banking.
Capital one shows how a focused digital adoption strategy can improve customer service. Their digital transformation project reconfigured only part of the business. At the right time, small interventions can produce very effective changes.
If Capital One sounds like a useful example for you, you can find out more about it in a more detailed analysis in Forbes.
Microsoft have been leaders in software innovation since the dawn of home computing in the late 1980s. But faced with the advent of cloud-based software systems in the early 2000s, their long-established distribution model suddenly seemed dated.
Their digital strategy was to completely overhaul their delivery systems, using their proprietary cloud solution. They launched Microsoft Azure in 2008. Azure has now become the 2nd biggest cloud provider in the world, providing a vast range of digital services for individuals and companies of all sizes.
As market leaders, Microsoft could have chosen to behave like Blockbuster video. Instead, they made a shrewd decision to completely update their digital strategy. If they never launched that radical change program, they could have been history.
Our article on Microsoft Azure gives you the full lowdown on this valuable product.
Nike, the global sportswear leader, showcases the excellent results that digital transformation initiatives can create.
Nike’s entire approach to branding, sales, and technology has changed.
They now focus on becoming a robust direct-to-consumer brand, reducing their retail partnerships, and increasing their work to create online sales. Programs like Nike Training Club collect detailed consumer data and use advanced analytics to make sense of the patterns. Smaller physical stores now do a lot of work to promote the Nike brand.
Behind the scenes, they use headless commerce to develop multiple online sales channels, with particular expansions into mobile apps and technology.
Like IKEA, Nike has dominated their market section for a long time. Their success in digital transformation means that they will continue to dominate. Instead of sticking with what they know, they’ve taken risks that have paid off. As a result, they’ve become a trend-setter in digital infrastructure, who are even used as a case study for teaching up-and-coming IT change leaders.
Why are some businesses more successful than others at DX?
Companies like Nike, IKEA, and Microsoft, make digital transformation look easy. These success stories are inspiring. However, not every digital transformation project succeeds. And when digital transformation fails, it fails big, sucking in money, limiting sales, and destroying staff morale.
The problems are rarely just technical. Failure usually comes about when the implementation is poorly planned. Some fundamental issues may include the following:
- No vision for the transformation;
- Poor communications across the organization;
- Lack of buy-in from staff;
- Poor timing.
There are ways of preventing these problems. For example, using a digital adoption platform as the backbone of digital organizational changes can support leaders in making effective decisions when planning organizational change adoption.
IT consultants and digital transformation frameworks can also significantly impact the chances of success.
How every business can remain transformative in an uncertain climate
Current business leaders and employees globally have lived through some of the most uncertain years in a generation.
When a crisis comes, digital transformation initiatives can learn from models of “complex change”. Organizational change is complex when it is made challenging by one or more factors, including crises, employee resistance, and financial demands.
Advanced managerial models, such as the Lippitt-Knoster model of complex change, can provide the help organizations need to keep moving forwards.
How To Drive Successful Digital Transformation
Driving a successful transformation is all about developing the right culture and using the right strategies. Here are some important areas that will help you create your own success story:
- For digital adoption, the employees in an organization can create more problems than the technology itself. At every stage of the process, staff must be encouraged, trained, and listened to. With their investment, it will be possible for a transformation to succeed.
- Digital infrastructure also should be part of the solution. A Gartner report shows that by 2025, up to 85% of business operations will be built on cloud services. Cloud solutions are now a proven way of securely handling transformation. An efficient cloud platform sounds like a big change, but it will help the whole process.
- As the transformation process progresses, collecting data is more critical than ever. Leaders can use data to understand the employee experience and ensure that supply chains are moving appropriately and technology is utilized effectively. A digital adoption platform is one way to make technical data collection much easier.
- Find a management style that will help the business to keep up with the complex change. Agile methods are a proven method of success, giving leaders and employees the tools they need to change and adapt as a change process goes on.
Looking Forward: The Future of Digital Transformation & Business Success
Businesses that want to use future technology successfully must learn how to embrace change. As new technologies emerge, leaders must find new ways of dealing with their problems.
Some strategies that will improve the chances of success include:
- Find opportunities to automate wherever possible. Automating routine tasks is one of the most straightforward applications of new data systems. More importantly, it can be accomplished without overall changes to the business.
- Create opportunities for continual training and learning. Get staff up to speed on the solutions your leaders are investigating. Send them on specialist courses. Introduce learning opportunities within the company. If staff get stuck in their old ways, they will be less willing to adapt to new challenges.
- Consider alternative business models and organizational structures. As the examples above illustrate, a complete digital transformation goes hand in hand with significant changes to the organization’s overall working model. When a business continually considers its options, it will be better placed to adapt to changing markets.
- Foster an agile mindset in every employee. Agile management techniques are one of the best ways to achieve successful change. When employees can approach tasks in an agile way, they will be ready for anything.
Learn How to Drive Growth From Success Stories
Just like any change management project, digital transformation is complicated and risky. But the best research routinely shows that it’s well worth the trouble. In July 2023, analysts from McKinsey showed that digital leaders could achieve shareholder returns of 8.1% – in comparison to 4.9% for digital laggards.
When companies proactively look for a digital transformation roadmap that suits their business goals, they unlock new ways of doing business in the modern age. The examples in this article show just a few ways of achieving that goal. Some research suggests that leadership makes the key difference – but really, building a culture of digital transformation is a company-wide priority.
So if you’ve enjoyed hearing about the top digital transformation success stories, keep on reading, thinking, and exploring, and you’ll find the innovations your company needs.