A showcase of ten stellar use cases of digital transformation
Much more than digitization, digital transformation is the process of organizational transformation. Done in such a way that information, technology, people, and processes experience a revolutionary shift toward agility and value creation in a digital landscape. But why should companies focus on digital transformation? And more so, what inspiration can be drawn from 10 companies who have completed this journey?
Why the need for digital transformation?
The world is continuously evolving whether it’s how we advance digitally, our political climate, or our planet’s actual climate. And this evolution brings out our core human ability of adapting to change. It’s an understatement to say that the internet has changed our lives forever. And with that technological leap forward we are still adapting and unfolding new possibilities to become ever more connected.
This connection is also true for how the real world and the digital world are intertwining and fast becoming one. Where our digital actions have effects on our real world experience and vice versa. You could state that currently we are ‘in between stories’. Meaning, we have a firm foot in the analog world and are stepping into the digital one with conviction.
The digital one, and its rapid digitization, invites us to find better interoperability. Increased market opportunities, more agility, productivity improvement, and increased efficiency are “just” surface level drivers for digital transformation. Underneath and in essence, digital transformation is an invitation to level-up our ability to make sense of the world and become more connected – seamless even.
In this post we’ll dive deeper into 10 use cases of digital transformation companies who took the leap and came out on top.
1. Brick by Brick: Lego
In David Robertson’s book – ‘Brick by Brick: How LEGO rewrote the rules of innovation and conquered the global toy industry’ – he shows how LEGO is a fantastic digital turnaround story. The company was on the verge of bankruptcy in 2004. The core problem was the misapplication of its digital transformation. Mostly due to; a series of digital media mishaps that drifted away from the core business, and secondly a lack of internal information flow, the company operated in silos and people often didn’t understand what was going on.
Their turnaround came with newly-appointed CEO Jorgen Vig Knudstrop at the helm. Over the following decade LEGO went back to its core value proposition and aligned it’s operational, technical, and marketing processes. The key factors in its digital transformation were threefold.
- A new enterprise system
LEGO restructured its Enterprise IT system to greatly improve the data sharing across the company – and with third-party-providers. Implementing APIs to bring in better services. And simplifying the user interface to give teams easier access to information and new tools to interpret data.
- Crowdsourced Product Design
LEGO Ideas was a brilliant move of bridging digital experience with that of the real world. Why is LEGO an exciting toy? Because users can build anything their imagination can come up with. Its options are endless. Then why not leverage that creativity and allow users to upload, vote, and allow LEGO to produce these user-generated designs? That is LEGO Ideas. It gave LEGO insight in market trends, knew that the designs would do well, and connected a more digitally attuned target demographic.
- Strong licensing model for media endeavors
LEGO solidified it’s licensing model for media endeavors. The LEGO Movie, it’s Batman spinoff, and various games boosted the profits of the company. These media successes were in turn further put to use by integrating them in actual product offerings achieving a coherent experience for all its customers.
2. Delivery by Data: DHL
‘Delivering excellence in a digital world’, that is DHL’s strategy towards 2025. The COVID-19 pandemic has boosted the company’s efforts towards digitalization. Investing over $2 billion on digital transformation projects between 2021-2025. Some of the more notable cases that have accelerated its digital transformation are:
- Advanced Quality Control Center (AQCC)
Millions of packages are being sent worldwide through innumerable logistics systems, different providers, and hundreds of thousands of touchpoints. How does one make sense of this? DHL invested in a state-of-the-art Advanced Quality Control Center. Its main features are interpreting big data to make predictive analyses on deliveries, real time issues, and shipment / flight movements. Through Artificial Intelligence (AI) and machine learning the AQCC continuously adapts and improves itself.
- Improved customer experience through digitization
24/7 chatbots to receive realtime information of the whereabouts of parcels, On-Demand Delivery – allowing users to schedule when they would like their contents to be delivered, and QR-code labels for return of parcels that minimizes physical touch.
3. Smart City through Sound Transit
Smart Cities are the pinnacle of digital transformation in society because they affect so many different actors and users. It touches upon governance, ethics, agility, multi-tiered collaboration, hybrid integrations and so many more. Within a Smart City Framework, one of the defining elements lies in how to deal with (public) transportation, in other words Smart Transit.
A recent Yenlo case study was done with Sound Transit. Sound Transit is a public transport provider in urban areas across Washington state, USA.
Sound Transit’s challenge for digital transformation lay in integrating various legacy systems with progressive cloud-based ones into one coherent solution. They are a regional transit authority that has their own means of transportation and simultaneously depend on a seamless collaboration with other local transit providers that have their own vehicles and time schedules.
They needed a service-based platform that could connect all these systems, and more importantly give its users realtime information to optimize travel experience ánd optimize commuting routes that benefitted all stakeholders.
Sound Transit embarked on their digital transformation by using an open-source platform. Choosing WSO2 open-source technology – with guidance from Yenlo – allowed Sound Transit to remain agile. Furthermore, this digital strategy expanded the possibilities for new services and APIs that improve the overall experience for its users, and bring about a truly integrated Smart City concept.
4. Digitization with Disney
Digital Transformation is less about the use of technology and IT-related decisions but much more about reinventing the way an end user (or other stakeholders) experiences your products or services. When it comes to Disney its product or service isn’t directly clear. One could say it’s their movies, or the parks, or the strength of the brand itself. But when you take a closer look, Disney’s core business is being a marketing machine.
Its true power lies in creating strong brands around creations or assets and monetizing them in every possible way.
The addition of Pixar, Marvel, and Star Wars lifts only a patch of the curtain that is Disney’s behemoth-size organization. So when Netflix came to the stage and consumer demand shifted from cable TV and cinema to on-demand streaming services, Disney was presented with the choice of either adapting to this digital landscape or stagnate into a more nostalgic brand. The former transpired.
Disney launched Disney+, acquired major entertainment brands, and went in heavy on personalization. One example of digital personalization is with their MyMagic+ wristbands that park visitors receive. The wristbands have built-in RFID chips that allow people to pay for services, book rides, access hotel rooms and more. These data streams can in turn be leveraged for personalized services. Birthday cards, merchandise (based on brand interaction), and new services offered based on consumer preferences. There is no doubt that Disney will have strong interoperability in place between its various backend systems, creating an omnichannel experience that makes digital transformation dreams come true.
5. Power to the Players: 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.
In 2019 and 2020 GameStop was doomed to be a dying brick-and-mortar company in the same way that Toys ‘R’ Us and Blockbuster met their demise. GameStop missed the boat and failed to take advantage of the growth in online gaming, they owned expensive stores (that because of the pandemic received record-low amount of customers), and had a broken e-commerce experience. Then Ryan Cohen stepped onto the scene.
The former CEO and founder of online pet store Chewy has every experience an e-commerce company could wish for, as he demonstrated before by taking on Amazon in a niche market and vastly outplaying them through innovative processes and stellar customer experience. Mid-2020 Cohen became an activist shareholder in GameStop and is currently Chairman of the Board with an aim to completely overhaul the company. In 2021 GameStop made strides towards digital transformation, in particular through a change in culture and talent.
The company brought in a team of tech-savvy executives from Amazon, Chewy, Facebook, Microsoft, Zulily and others. GameStop removed all its debt, opened strategically-placed fulfillment centers, expanded product categories, set up omnichannel marketing, and is now full steam ahead to revolutionize the market for gaming enthusiasts into a digital one.
The latest scoop is that GameStop is diving into blockchain and NFTs. One example could be that customers will be able to buy and trade games through a blockchain network, thereby opening up infinite scale opportunities and enable game developers to continue to benefit from their products. If executed, this move will quite possibly turn into a showcase example for blockchain technology applied to both the B2B and B2C space. Though many of the companies in our list have already gone through their digital transformation, GameStop is one to watch, as their digital journey progresses with leaps and bounds into a stratosphere yet to be discovered.
6. From license to cloud: 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.
Similar to Microsoft’s successful licensing software – Microsoft Office – the majority of Adobe’s revenue came from its standalone licensed products such as Adobe Photoshop. The recession in 2008 hit the company in their most profitable division: B2B customers. Companies no longer had the desire or the capital to invest in newer versions of Adobe’s product range. Adobe knew they had to pivot. Cloud-based products were the future but announcing that route came with heavy criticism from investors and customers.
The shift to a subscription-based model suddenly required customers to shell out an annual or monthly fee. Adobe had to double-down on the quality of its service in order to stay on top of the market. And they did. Adobe Creative Cloud was a complete reinvention of the business. Now, customers have a seamless experience of the product, whether they are using mobile or desktop. Content is saved in the cloud and accessible anywhere, and Adobe’s digital transformation to SaaS now allows for collaborations and added services previously deemed impossible. The road to digitization is a test of patience. Adobe suffered declining revenues for three years straight, from 2011 to 2014, until finally in 2015 the recurring subscription model caught on and the company has never looked back since. Revenue in 2008 hit $3.5 billion, in 2020 they had grown to $12.8 billion. A truly successful turnaround that took guts, patience, and a clear focus on the value for its end user.
7. Banking reinvented: Hanseatic Bank
Hanseatic Bank recognized the opportunities for competitive advantage through APIs and third-party providers. They aimed to improve time-to-market and enable new business models. Simultaneously, the Hamburg-based private bank also felt a huge responsibility towards protecting the user data of their current and future customer base.
To harness these security standards, Hanseatic Bank needed an efficient integration solution that both paved the way forward and kept the current business operating. The solution would have to be adaptable to a brand new cloud-based IT infrastructure.
With this in mind, Hanseatic Bank started to implement the Open Banking API based on the WSO2 Open Banking technology stack. The company selected Yenlo as the system integrator. Yenlo’s flexible Integration-Platform-as-a-Service solution, called Connext Platform, was exactly what Hanseatic Bank needed to complete their Open Banking digital journey.
Together with a committed team at Hanseatic Bank, Yenlo’s WSO2 Open Banking experts realized the implementation of Connext as well as the continuous managing, hosting and operational support of the platform ensuring a true digital transformation in finance.
8. Earth-shaking transformation: Caterpillar
Caterpillar, CAT, is the world’s leading manufacturer of construction and mining equipment. Famous for its trucks, excavators, dozers, and loaders. But recently the multinational has become a hardware-and-software company, leading the field with A.I. and digital twins (real-time, virtual representations of physical processes and objects).
Caterpillar understood that the life cycle of their machinery – and thereby customer loyalty – would increase when they could predict maintenance, anticipate part replacements and assist in the automation of certain operations such as on drilling machinery. The company leaned into A.I. and IoT sensors. The latter can even be bought separately and placed on competitor equipment. Caterpillar expects their digital services to greatly contribute to the forecasted $28 billion dollars in service revenues the company expects to make. This is a doubling from the $14 billion generated in 2016.
Cat Digital, the digital transformation division, continues to analyze information coming from billions of IoT sensors to further improve their current product catalog of hardware and software, thereby shaking things up in the mining industry.
9. Streamlining Education: Utrecht University
Perhaps not a full digital transformation though the case of Utrecht University does bring up the question of how to integrate and streamline education that takes place both physically and digitally?
Utrecht University was founded in 1636 and is one of the Netherland’s leading universities. It is an institute hailed for its groundbreaking research and level of education. The university employs 6.500 staff and provides education to over 30.000 students. And as with education institutions they often own on-premise legacy-based systems that handle all student and organisational data. Research facilities, data management systems, a wide variety of applications, platforms and partner programmes; presenting a digital strategy that combines all elements in a seamless solution can seem like quite the challenge.
As with other examples in our list, the first step to becoming a digital transformation company is to figure out a business strategy before investing in any digital asset. The second step is to design the end user experience from the outside in. Meaning, based on the business strategy, what digital services should the institution offer. From there the IT Architecture can be shaped. Enterprise Architecture, Solution Architecture, Technical Architecture, all parts equally important. Furthermore, these should not be short-term strategies but rather mid-to-long term so that the organization, or in this case Utrecht University, designs and implements digital assets with a future focus.
Which is precisely what Utrecht University did. It became clear that in order to create a more convenient IT experience for both students and staff members, there was a dire need for better integration, interoperability and communication between platforms and applications. Utrecht University contacted Yenlo. And together, with Yenlo’s experienced team, created a digital journey strategy. and execution.
10. Building a better future: 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. It’s transformation, similar to LEGO and GameStop, truly set off when a change in culture was sparked by the addition of tech-oriented leadership. In the person of Barbara Martin Coppola, IKEA found its Chief Digital Officer.
One of IKEA’s core challenges lay in how to remain true to the DNA of the company and simultaneously pivot in a way that impacts every area of the organization: from sourcing materials, to supply chain, to warehouse, to fulfillment centers, to e-commerce, to delivery services, and in-store experience. In order for IKEA to transform they needed to be thorough with the way they handled their digitization strategy. And they are.
- Simplify the IT architecture
Parallel processing and a modular approach to technology allowed the company to first simplify it’s IT architecture.
- Understand all customer touchpoints
Secondly, they set their eyes on understanding all customer touchpoints and mapping where digital and physical can be combined or strengthen each other.
- Digitize internal and external operations
And thirdly, the utilization of digitization in internal operations and external partnerships including a shift in company culture.
Aligning these three components, provides a roadmap that’s ever changing but has a clear destination: an integrated digital transformation company.
Now, 80% of all IKEA’s customer journeys start online. Customers can create new interiors and go to the store where, for example, VR and AR applications allow them to visualize how a certain set of items looks in their home. In some cases IKEA’s stores act as fulfillment centers adding agility to the shopping experience, whether it’s solely online or a hybrid kind. Its supply chain is adjusted to consumer demand and market trends through predictions of A.I. and machine learning models. And API services from third-party-providers such as TaskRabbit give customers the ability to add services like hiring temporary workers that can help deliver and build the furniture at home.
IKEA is a fantastic example of Digital Transformation because it shows what it takes on all areas of a company to succeed in digitization.
Time to embark on your own digital journey
When it comes to digital transformation companies or any shift in IT architecture, it requires expertise on the strategy and its execution. Is your company ready to embark on its digital journey and are you curious where to start and what options are out there? Then please contact us at Yenlo. It is our mission to assist companies, like yours, on their digital journey. Take a peek at our solutions.
Whether it’s Connext, our integration-Platform-as-a-Service, or our Integration-as-a-Service Connext Go!, ultimately, it is about creating a more connected world. For the benefit of your customers, your people, and your business. We are happy to assist you in every step of the way.