Several businesses have seen positive results from early digital efforts, but challenges remain.
Most enterprises are in the midst of a digital business transformation meant to keep themselves competitive in an expanding digital market. However, many are not as far along in the process as they think, and several challenges remain.
"It's not easy to find a lot of examples of true success in digital transformation," said Gianni Giacomelli, senior vice president and business leader for digital solutions at Genpact. Some common issues arise: Lacking front to back office transformation, ignoring necessary change management, focusing solely on the technology instead of the operational improvements.
Further, "there is no successful completion of a transformation—it's a continuous evolution," said Forrester analyst Nigel Fenwick. "Transformation creates new sources of customer value by helping customers achieve their desired outcomes in new ways. In doing so, transformation opens opportunities to drive new revenue streams."
SEE: IT leader's guide to achieving digital transformation (Tech Pro Research)
While this list is by no means comprehensive, here are 10 companies across different industries that have seen positive results from early digital transformation efforts.
1. Kaiser Permanente
The largest managed care organization in the US, Kaiser Permanente made great strides in telemedicine in recent years. "The discrete technologies for telemedicine have been around for 25 years, but it's only the past three years or so that the kind of societal and cultural uptake has taken root," said Gartner analyst Patrick Meehan.
Today, 52% of the more than 100 million Kaiser Permanente patient encounters each year are virtual visits.
2. General Electric
GE is still in midst of a continuous transformation, but they've already done more than most, Fenwick said. The company integrated sensors into its aviation, transportation, manufacturing, healthcare, and energy production businesses, and created software to analyze the resulting data. Its software and services business made about $6 billion in revenue in 2016—a 20% increase from the prior year.
3. John Deere
Agricultural manufacturer John Deere uses data analytics to customer maximize return on asset, Fenwick said. The company has launched initiatives like the John Deere Operations Center to give farmers deeper insight into their equipment and farms.
Domino's is a great example of how a user-centered design harnesses the power of operations, Giacomelli said. The company's pizza tracker technology allows customers insights into the operational process.
5. The North Face
The North Face uses IBM Watson via IBM Expert Personal Shopper to personalize product recommendations, such as selecting the best jacket for an expedition to the Amazon during a specific time of year, Fenwick said. These recommendations delivered a greater than 15% increase in average order value.
6. Home Depot
The Home Depot allocated a budget of $300 million to implement a buy online, pick up in-store system, Fenwick said. Six months into planning, the estimate was $1.5 billion.
"Customer-facing digital experiences often required extensive changes to back-end systems like distribution centers and fulfillment systems," Fenwick said. "As The Home Depot learned, you may find that you need to spend $4 on digital operational excellence for every $1 you spend on digital customer experiences. It all depends upon how well you have already digitized business operations."
The investment paid off: The company reported a more than 7% increase in revenues in 2016, with online retail driving much of the growth. Home Depot generated an estimated $90 billion in revenues in 2016 without opening any new stores in the last three years.
7. Liberty Mutual Insurance
US insurer Liberty Mutual Insurance's open API developer portal combines public data with proprietary insurance knowledge to inform future products and apps for driving and lifestyle, Fenwick said.
8. Carnival Corp.
The Carnival Cruise line has introduced a number of digital projects in recent years, including an Internet of Things (IoT) wearable device that incorporates machine learning and data analytics for cruise ship passengers.
Appliance manufacturer Bosch's software engineering group Bosch Software Innovations (BSI) has made a number of strides in connected vehicles, power tools, and smart home solutions, Fenwick said. "The main focus for BSI is to define the most advantageous positioning in the IoT market and to ensure the necessary speed and agility to take advantage of the digital revolution that is shaping the IoT marketplace," he added.
AIG insurance company applied machine intelligence in its IT shop by automating its IT ticket system. Now, more than 140,000 tickets are being resolved without the need for an employee. The company was able to redeploy IT workers to do more impactful projects, according to Bill Briggs, CTO and managing director of Deloitte Consulting.
- Digital transformation: A CXO's guide (TechRepublic)
- Eight obstacles to overcome in your digital transformation journey (ZDNet)
- Cheat sheet: How to become a data scientist (TechRepublic)
- Why AI and machine learning need to be part of your digital transformation plans (ZDNet)
- Why employees are the key to digital transformation success in the enterprise (TechRepublic)