Digital transformation is a process by which a company invests in building out new digital products and services in the effort to rethink the business around digital. An effective digital transformation improves customer experience and enhances the way a company operates behind the scenes.
To digitally transform, your business needs to deploy new products and technologies. With these new products come new ways to connect with your customers and more data to inform roadmaps and strategies.
Once the investment in digital begins, your business can use new products and data to identify growth opportunities. The three case studies below—from Ford, Walmart, and Anheuser-Busch InBev—show how legendary companies went beyond simply creating an app and truly re-thought how digital efforts supported sustainable growth for the business.
- Digital transformation brings about new products and services that improve the customer experience.
- Digital transformation can also be an investment into new systems, goals, and methodologies that make internal processes more efficient.
- Digital transformation gives you more informative behavioral data and more touchpoints with the customer.
- You can leverage the new data gained from digital transformation efforts to further improve the customer experience and drive sustainable growth.
- AB InBev, Walmart, and Ford used investments in digital technology to accelerate internal processes and deploy new digital products that, consequently, provided valuable data on the customer experience and influenced future business investments.
3 examples of digital transformation through data
Here are three examples of legendary companies that embarked on digital transformation with a focus on data. These companies carefully considered how new technology could bring about data that both made internal processes more efficient and produced insights about how to grow customer value.
Brewing company AB InBev underwent a digital transformation by compiling their network of independent breweries into a unified powerhouse. One of their priorities was getting their data in the cloud, and by doing so, employees can now pull data that’s gathered globally and use it to make data-backed decisions.
For example, more accurate demand forecasting means AB InBev teams can match supply with demand—essential for such a large company with a complex supply chain. Access to data from all the breweries means they’re able to experiment faster and roll out changes that improve business processes.
Gathering more data and opening up that data to internal teams was just the first step of the process, though. AB InBev capitalized on their digital investments by launching an ecommerce marketplace called BEES for their SMB customers—the “mom and pop shops”—to order products from. With the BEES platform, AB InBev found that their small and medium-sized businesses browsed the store on the mobile app and added items to their cart throughout the day—however, they only made the final purchases later in the evening.
Based on this behavioral data, the BEES team started to send push notifications after 6:00 p.m., recommending relevant products, which led to increased sales and greater customer satisfaction. By the end of June 2021, BEES had gained over 1.8 million monthly active users and had captured more than $7.5B in Gross Merchandise Volume.
Jason Lambert, the SVP of product at BEES, credits their success with the hard data that told them how their customers behaved and what they needed: “it turned out to be a thousand times better than any of our previous strategies or assumptions.” BEES used behavioral analytics to respond quickly, changing the buying experience to match the needs and habits of their retailers.
As a traditional brick-and-mortar retailer, Walmart began digital transformation when they opened an online marketplace. However, digital transformation is an ongoing process—it doesn’t end at the first website. A digital transformation means companies refocus their operations around digital technology—and this usually happens both internally and in a customer-facing way.
To drive more customer value through digital touchpoints, Walmart set up mobile apps and a website to allow customers to purchase goods online. After analyzing customer behavioral information from their app, they added more services such as same-day pickup, mobile ordering, and “buy now, pay later.”
To be successful with digital transformation, Walmart prioritized data access for everyone on their teams. Breaking down internal silos allowed employees to take ownership; They acted fast and made concrete changes to improve the customer experience.
Walmart’s head of mobile marketing, Sherry Thomas-Zon, notes how critical data—and access to data—are to digital operations. “Our marketing and product teams are always looking at numbers,” Thomas-Zon said. “You can’t work quickly without a self-service data and analytics tool for marketing, especially in an organization as large as Walmart. It keeps our teams agile, despite our size and the increasing amount of data we collect and analyze.”
Ford has embraced several digital transformation initiatives—including using technology to transform and improve the manufacturing process at one of its biggest factories. Not having the correct parts available holds up workers and slows down the production process. Ford introduced a material flow wireless parts system so they could track the quantities of different parts and make sure there were enough available.
In 2016, Ford also introduced a digital product for their customers—the FordPass app. It allows Ford owners to remotely control their vehicles. For example, drivers can check their battery or fuel levels and lock or unlock their car from their phone.
To capitalize on these new digital touchpoints with the customer, Ford leveraged data to improve the experience of the FordPass app. First, the product team grouped customers based on the in-app behaviors they demonstrated. Then, based on each group’s activity, Ford personalized the app experience to provide more value. Jian Wei Hoh, head of business design at Ford, said, “Designing around cohorts is a game-changer.”
Ford’s success is grounded in the same process as Walmart and AB InBev. They used their digital transformation to gather detailed information about how their consumers interact with their products. Then, they made data-led decisions to provide more value to their customers.
Overcoming common digital transformation challenges
It’s not called a transformation for no reason. You’re changing the way your business operates, which is no easy feat. Here are the common challenges you’ll face and how to overcome them.
Teams undergoing a digital transformation have to:
- Unlearn habits
- Get used to new structures and ways of collaborating
- Deal with changing roles
- Develop new skills
All of this takes time and, as you integrate new systems with the old, there’s a risk that teams will get siloed and chaos will ensue.
A key way of overcoming these challenges is planning. Create a digital transformation strategy roadmap in advance. Outline your integration strategy and detail how this will affect each team. Once you’ve created your plan, share it with the entire company, so everyone can use it as a single reference point. Use a project management tool that allows team members to get a big-picture overview and see granular details like the tasks they’re responsible for.
It takes time for teams to onboard and move away from what was successful under the previous system, for example, shifting from heavyweight to lightweight project planning. Make sure you factor some breathing space into your roadmap—give everyone a chance to get used to the new way of operating.
As part of a digital transformation, you’ll want your team to develop new skills as well. Upskill your team by incorporating digital skills into your employee development plans. Provide people with opportunities to learn and then track their progress.
More challenges arise if you believe there’s an end-state to digital transformation. New technology and new consumer behaviors are always emerging, which means digital transformation is an ongoing process. It’s not something you’ll complete in a week. Rather, it’s a continuous state of experimentation and improvement. At Amplitude, we refer to this process as digital optimization. If digital transformation brings new products, services, and business models to the fold, then digital optimization is about improving these outputs. Both digital transformation and digital optimization are important—digital transformation signals the start of new investments, and digital optimization compounds them.
Tips for building a digital transformation strategy
A digital transformation won’t magically grant you more profit. Examine how each part of the transformation will affect your customers and your employees. Then, you can be intentional and introduce initiatives that positively impact your business.
Diagnose what you want from a digital transformation first
There are different ways of going about a digital transformation. Some companies prefer to implement an all-inclusive digital strategy, and they transform all parts of their organization at the same time. Others opt for a less-risky incremental strategy. Every company is different. To choose the best approach, examine your whole organization and analyze where digital systems could help.
Consider your business goals. Investigate how a digital transformation could impact the customer experience. What new products could you provide? How could you improve your services? For example, you might use artificial intelligence to create a chatbot that reduces customer service wait times—or purchase software that does the same.
You’ll also want to consider your business processes. How could a digital transformation speed you up? Improve your operations? Allow more collaboration between teams? Asking these questions allows you to challenge the way you operate and will help you identify problems in your organization that you might not have noticed before. For example, perhaps your deliveries are often delayed, and you could make delivery smoother by digitizing elements of your supply chain.
Get cross-team involvement
Though different teams may work separately, your customers are affected by each department. Collaboration elevates everyone’s work because it means people can make informed decisions.
Make sure you get input from all of the right stakeholders when you create your digital transformation strategy. Ask:
- What processes hold you up?
- Where are the bottlenecks?
- What data would be useful for you?
Allow everyone to access the data they need without input from anyone else. Help your employees improve their data literacy. Start by providing training so everyone can use the data tools and software in your organization—consider setting up a capability academy for data skills. To help everyone in your organization access and analyze data, adopt easy-to-use self-service tools. Then, lead by example. Provide inspiration by using data storytelling in your presentations to explain the decisions you make.
Encourage collaboration between teams by creating shared resources, so they have spaces to present insights and submit suggestions. This could be as simple as creating a Google Doc for brainstorming that multiple teams can access, or sharing charts directly within your analytics solution like with Amplitude Notebooks. Then, you can start to experiment and make improvements to the digital customer experience like Walmart, Ford, and AB InBev did.
Once your digital transformation is moving, a digital optimization strategy is an opportunity to generate growth. Your digital transformation initiatives will continue in parallel, and the process will become a feedback loop:
- Deploy new digital systems and products
- Analyze the data that comes forth from these investments. Use it to draw insights about your customers or processes.
- Make decisions based on the data and make changes.
- Repeat. (Or, optimize.)
Always focus on your customers
Keep customer needs at the heart of what you do. Let them be your guiding light as you go through your digital transformation—as you gather more data about how your customers interact with your new digital products, use it to make the experience even better for them. It’ll lead to more trust and loyalty and, ultimately, result in more recurring revenue.
To continue your learning about digital transformation and optimization, join an Amplitude workshop or webinar or read our Guide to Digital Optimization.