You are reading the article Using A Skunkworks To Support Digital Transformation updated in December 2023 on the website Achiashop.com. We hope that the information we have shared is helpful to you. If you find the content interesting and meaningful, please share it with your friends and continue to follow and support us for the latest updates. Suggested January 2024 Using A Skunkworks To Support Digital TransformationThe problem of digital silos
A common problem in many larger organisations is that given the importance of digital marketing, digital skills are centralised in one or more locations, so creating digital silos. So pockets of digital knowledge become dispersed internally rather than creating a joined up structure with different marketing teams working on marketing activities which integrate digital marketing.
In the long-term, integrating your digital marketing team is an essential requirement for organisations wanting ro re-invent their proposition to a changing digital world, being led by disruptive digital technology and new ways to reach new audiences and new channels.
But at the same time, businesses need to stay agile and review the latest innovations in digital technology and marketing. As organisations embark on transforming to a digital culture by moving away from a dispersed structure, creating a “digital centre of excellence” can help give focus on a digital first culture that not only provides consultancy internally for an organisation but also helps create a more agile team to service new market opportunities and initiatives within the external market.
To support a move to a digital centre of excellence, it is important an organisation is developing and training their workforce with the right digital skill-sets. One of the main obstacles to digital development within organisation are staff lacking suitable skill-sets or organisations hiring people with a digital knowledge but are hired into business departments not accustomed to hire or manage digital.What is a Skunkworks?
Making the leap from a Dispersed structure to a Centre of Excellence can take a lot of internal time, necessary budget, buy-in and resource in getting senior management to consider a change in structure as well as culture, so to test the model in changing structure, embracing a Skunkworks type approach within a larger organisation could be an approach to explore. The term Skunkworks can be defined as a
“loosely structured group of people who research and develop innovative opportunities and business benefits”.
Often Skunkworks are labelled as Digital Labs or Digital Innovation centres also. Surprisingly the term is not new. It originated from a second world war R&D project known as the Lockheed Martin Skunk Works, over 70 years ago. Since then, its Skunkworks has provided helped enhance its global reputation as a pioneer in creating breakthrough technologies and continually to redefine flight.
Ideally, a Skunkworks has sufficient autonomy that it does not get sidetracked by current business needs. So it can operate as an off-shoot of the main organisation, protected from cultures and processes that inhibit progress and has a remit to create, develop and concept test new opportunities, products and services.Using crowdsourcing to gain new ideas for digital innovation
Skunkworks will often benefit from bringing in new thinking from outside an organisation, for example using an open innovation platform like Innocentive. A recent retail example of this approach is the John Lewis JLabs approach which offers an incubator startup lab for several retail startups, one of which wins a prize.5 techniques needed for a Digital Innovation Skunkworks
Before creating a Skunkwork or innovation lab, it is essential there are set measures in place to monitor and measure what benefit it is brining the organisation expecially during a phased to test approach.Setting Objectives
Having senior management buy-in with set agreed set SMART objectives in place for the Skunkwork to achieve its goal or display value within an agreed timeframe will make the operation getting better buy-in.
It’s essential regular feedback is provided to the organisation offering transparency to what the team is working on and what it plans to deliver and achieve. Not only does this provide direction and buy-in from the organisation but this also provides the ability for the Skunkwork to feedback the changing market, new threats as well as opportunities that digital provides the organisation.Digital Training
Implementing a digital first culture within the team will provide existing digital execs within the organisation an opportunity to work with an train non-digital staff members. recently reported a growing concern for orgnisations is a growing requirement to skill-up their workforce to become more digitally focused where it was recorded 90% of professionals say technology impacts their job, only 20% had the right skills.
Consider creating a digital and technology staff development framework geared towards a digital first culture and introduced to all existing staff and future recruits. I wrote about this in my post on the DARC framework for recruiting digital skills:
Hire for Digital – People that understand digital and can display a knowledge.
Hire for Analytics – An understanding of analysing trends and can interpret data to make actionable insights into changes in the digital market as well as being able to uncover opportunities
Hire for Reach – can provide examples of how they can drive awareness of a product or service through different digital communication channels and finally
Hire Content Creators – The skill set to be able to write for the web and engage with their target audience, whether B2C or B2B communities.Collaboration
Working with more external organisations in partnership provides the organisation with a a model of sustaining innovation and making improvements to make the product or service better. Building relationships with non-compete organisations offer the opportunity to build knowledge sharing, reciprocal training and guest placements for employees to swap organisations.
Example: Two leading digital marketing companies in the US, chúng tôi and Seer Interactive did exactly this when both their CEO’s swapped roles for a week and here is a brilliant post on the reasons why and opportunities it provided both companiesListen to your customers
Build direct relationships with your existing customers learn their requirements and needs from the organisation in genetrating. Your customers provide the perfect real-time survey for what the outside world really thinks of your company proposition.
Digital has seen the rise in choice and convenience for customers who can decide to shun your proposition and move to a competitor so it’s essential you’re out there meeting up with customers face to face to understand their views, frustrations, thoughts and suggestions on what couldmake your organisation remarkable. Here is a list of organisations who have done just that to drive collaboration with their customers.
Example: Threadless – A T-shirt retailer who put at the hear of their business their customer base. To create ideas for designs for t-shirts, rather than employing a department of designers, Threadless ran design compeititions through their social network where member submitted their ideas for Tees and then the member voted on which designs they liked the best.
Growth HackingCalling for a re-position and re-think of how traditional marketing departments operate and relies on 4 key steps for Growth hacking as defined by author Ryan Holiday in his book Growth Hacker
Step 1 – Product Market Fit (PMF)
PMF is the moment when the product and its customers are in perfect sync with each other. Don’t be afraid to launch the product and to learn from your audience on ways to improve its value, embrace the fear.
Step 2 – Finding Your Growth Hack
Know your audience – this is essential to make your audience aware of the product/service you’re launching. The understanding of who your audience is, how they interact through digital and make them aware of your business.
Step 3 – Going Viral
Growth Hacking is about launching your product as cheap as possible in a unique and differentiated way to your competitors and spreading virally is a central component to this i.e. you are relaying on your users to help spread the word.
Example: Dropbox built one of the most effective and most viral referral programs of the start-up world – the offer it put together was for its users who would receive 500 megabytes of free space for every friend they invited and got to sign up.
Step 4 – Retention & OptimisationConclusion
The only brands that will survive in the digital world are the brands that shun being mediocre, that look to constantly raise the bar. The only way to grow is to stand out to create something worth talking about. Digital has given the power of choice back to the customer and the companies that are succeeding and differentiating themselves are the ones embracing their customers whilst at the same time responding, re-defining and recreating how their products and services are marketed to existing and new markets.
A Skunkworks offers this platform for engagement, by having director buy-in to launch a department that is given permission and is equipped to embrace new channels to market and new exploring new ways to communicate with customers and prospects.
Download Expert Member resource – Growth Hacking Guide
This guide aims to show how growth hacking concepts can be applied to established medium and large businesses as they seek to develop more agile marketing approaches. Naturally, the checklists in this guide will also be useful for start-up and smaller businesses.
Access the Growth hacking guide
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Study from PwC shows the need for Chief Digital Officers in larger organisations
The digital revolution is transforming all business departments. Marketing, HR, Sales, Finance & IT all have massive opportunities and considerable challenges thanks to the rapid pace of digital change. Whole industries are being disrupted with newer, faster and more efficient ways are doing things emerging. Many businesses are responding by creating a digital transformation programme – our new research shows the number of businesses adopting digital transformation programmes is increasing with around one-third having a programme in place and a further third planning a programme within 12-months.
Managing digital transformation is a herculean task, but one that needs to be done well if the business is going to continue to grow in a world forever changed by pervasive technology.
Download Expert Member resource – Managing Digital Marketing
Our free research report based on a survey of Smart Insights members and Technology for Marketing 2023 attendees explores the approaches businesses use to plan and manage their investments in digital marketing.
The challenge of digital transformation has led to the creation of a whole new category of business executive; the Chief Digital Officer or CDO. McKinsey has described the CDO as the Transformer in Chief.
A new report from PwC charts the rise of this position, and suggests it’s importance will continue to grow over the coming years.How many already have a CDO?
Only 6% of companies have a chief digital officer, which in part is explained by the fact many businesses are too small to require such a position. Contrast this to the proportion of businesses with another type of CDO, the Chief Data Officer, which Gartner estimates will reach 90% by 2023.
Larger companies generally are ahead of the curve in appointing CDOs. The proportion of companies with more than 10,000 employees that have appointed CDOs is between 5 and 9 percent, but this falls to between 1 and 3 percent for companies with fewer employees.
The more consumer-oriented industries were more likely to have CDOs. 13% of media companies had them, whilst 31% of travel and tourism companies had them. This reflects how much digital has transformed those industries, so as we see technology disrupting a whole new set of industries in the coming years, such as healthcare, finance and law, so too will we see the growth of CDO positions.
I would conservatively predict that within five years the levels of CDO penetration across the board will be as high as it is in the travel and tourism sectors.European companies lead the way in terms of CDO positions
European companies are considerably more likely to have CDO positions than other regions. This may, however be the result of different cultures towards digital transformation, as many American companies may feel that they already have digital in hand, with experienced executives that lead technological changes.Which departments are CDOs recruited from?
Being a ‘chief digital officer’ you might expect a lot of CDOs to have a tech background, possibly leading IT departments. Not so. In fact, the most common background for CDOs of marketing, and 2nd is sales. This is probably down to the extent to which marketing has been disrupted by digital, giving marketing officers strong insights into managing digital transformations.Where do CDOs sit in the organisational structure?
As the ‘Chief’ in term name would suggest, the most common ways CDOs are integrated into an organisations structure is at the C-suite level, which is a testament to their importance within major organisations.Do you need a CDO?
The answer to this question will very much depend on the size of your business and the sector it operates in, as well as its current state of digital development. Digital officers are required when the business is going through digital transformation, but are a transitional role. Once all aspects have fully embraced and optimised the use of digital technologies, the need for a chief digital officer will evaporate. Railway companies don’t need chief diesel officers to manage the transition away from steam trains, because they don’t use steam trains any more. Therefore whether or not your business needs a CDO will also depend on whether digital is the norm or not in your organisation.
For more insights on the current state of the role of chief digital officers, download the report from PwC. For a contrarian look at the future of CDOs, see this article from Forbes.
It quotes Rob Preston, Editor-in-chief at InformationWeek forecasting that by 2023 the CDO role will disappear. He says:
“…once business leaders understand that the Chief Digital Officer is a role born from the apparent need to fulfil responsibilities that are accountable and delivered by each of the C-suite separately in their own duties”.
Download Expert Business Member resource – Change Management for Digital Transformation
This guide takes you through the essential actions to manage change and lead digital transformation projects through to a successful conclusion..
Access the Change management for digital transformation
Let’s look at a practical example from the banking sector of how transformation fuels growth. This usability research on the UX of banking involved competitor benchmarking where different activities like opening an account were logged and compared.
This study highlights the digital disruption caused by challenger banks and how some industry incumbents have improved their customer experience, but others haven’t. The findings are shocking… Look at the difference between the 10+ days for an account to become active from existing banks in comparison to the 2-3 days for an account to be active from challenger banks like Monzo, Starling and Metro.
Yet, each of these issues can be solved through a defined transformation programme which follows a logical process and defines the main activities that need to be prioritized.
Recognizing the need for a managed transformation process in an organization is an essential early part of the process in order to get the buy-in and investment needed to make transformation a success. Consider some of the common problems if you don’t have a structured transformation plan (read more in our post 10 reasons you need a digital strategy ):
It’s clear that the customer experience is much poorer when the process takes much longer and this will translate into frustrated customers and lost business.
Some traditional banks like Barclays and Lloyds have revised their back office process using STP (straight-through processing), so that they offer a 2-day turnaround process. In terms of digital experiences, the challenger banks perform even better and some of the traditional companies offer a much poorer experience.
What process should be followed to structure a transformation plan?
To follow an established process for digital transformation strategy, we recommend combining the Smart Insights RACE planning system and PR Smith’s SOSTAC® Planning Model.
SOSTAC® is a widely used tool for marketing and business planning which is rated in the top three most popular marketing models in our review of Marketing Models that have stood the test of time. The SOSTAC® process covers six steps which apply well to managing digital transformation:
Created in the 1990s by writer and speaker PR Smith, the SOSTAC® framework has built an authoritative reputation as the framework of choice for different scales of business including multinational and start-up organizations across the world.
Smart Insights RACE explains the detail needed to prioritize digital marketing activities since it gives a comprehensive definition of 25 activities that should be considered for prioritization on your digital transformation roadmap. These are summarized in this infographic which explains how the SOSTAC activities relate to RACE.
Let’s now consider the digital transformation activities involved in each step…Stage 1. Situation analysis and performance review
This review should assess opportunities for deploying digital marketing and technology in your organization and reviewing the limitations involved. Analysis of your digital activity compared to competitors should be part of this. Activities to include at this stage are:
SWOT analysis: what are the strengths, weaknesses, opportunities, and threats to the whole organization? We recommend a digital-specific or multichannel digital channel SWOT – see examples.
Who your digital customers currently are: What types of audience personas interact with you? You can see more examples and guidance in the Smart Insights Persona Toolkit.
Competitor analysis: How do they compete online across the 5Ds of digital? e.g. price, product, customer service, reputation, what are their key differentiators?
Digital channel performance: What is the effectiveness of different channels such as search, social media and email marketing in supporting acquisition?Stage 2. Objectives
Stage 2 of your digital transformation plan should define the objective/s of your transformation strategy. Consider the 5 Ss goals refer to Sell, Serve, Speak, Save and Sizzle as SMART objectives.
We recommend that objectives are clearly aligned with strategies to achieve your goals. Drivers of these objectives include business goals and market research insight. Key performance indicators (KPIs) should also be detailed.
Source: Digital, Marketing, Strategy, Implementation and Practice, 7th edition, by Dave Chaffey and Fiona Ellis-Chadwick
Objective setting relates to the control stage where it’s important to use the right dashboard and performance review approach to improve performance.Stage 3. Strategy and governance
Strategy defines how you plan to achieve the objectives set for customer acquisition, conversion and retention.
For transformation projects, you need to select strategic initiatives to achieve your goals. Decisions about investment, resourcing and governance which are also highlighted in the action section.
The Deloitte CMO survey highlights how transformation projects can support business growth strategies business:
Typically, much investment in digital marketing communications is focused on market penetration of existing products into existing markets. However, transformation strategy should also consider more disruptive strategies to support product development and market development.
Digital technologies give opportunities for digital or digitally augmented services to enter new geographic or customer markets at a low cost. So transformation strategy relates closely to market segmentation, targeting and positioning (STP) strategies. These will require review of business and revenue models related to the 4Ps including Product, Place, Pricing and Positioning.
Writing on LinkedIn, Andrew Annacone, Managing Partner at TechNexus Venture Collaborative recommends there are four types of transformation to consider:
Business process: Improving the efficiency of selling and buying processes and communications (he doesn’t acknowledge marketing as a process…)
Business model: Opportunities for digital sales
Domain: This relates to opportunities for new product development and market development
Cultural/organizational: Highlighting the need for careful change management, skills development and restructuringDigital governance
Governance is a key success factor for digital transformation projects covering issues such as resourcing, skills development, team structure, performance review and improvement process. Digital government also covers how these activities are supported by marketing technology. The McKinsey 7S framework provides a useful way to review these governance decisions.Stage 4. Tactics
Tactics cover the specific tools of the digital mix that you plan to use to realize the objectives of your plan. In practice, these tactics are delivered as ’always-on’ digital communications across the customer lifecycle. Planning in these integrated digital and traditional communications which go beyond marketing campaign communications are needed to make the most of the opportunities of digital marketing, yet they are often missed if a structured transformation approach hasn’t been followed.
As our customer lifecycle analysis visual shows, ‘always-on’ paid, earned and owned digital media are particularly important. If you can encourage initial interactions with a brand based on search intent to buy a product, there are opportunities to design integrated communications to influence audiences throughout the customer lifecycle using email automation, web personalization, and re-targeting.
When completing your performance review you will need to have considered your existing capabilities to deliver these. Access our free digital marketing benchmarking templates to review your performance across RACE.
Our six pillars of success are based on what we have often seen to be missing parts of the planning puzzle when consulting and training with many companies from small to large.
The six pillars of success for digital marketing tactics
To simplify this complexity from the hundreds of tools and communications channels to potentially use, we recommend six key pillars for success for implementing transformation which must be sufficiently resourced and a dedicated strategy created. These are shown in the visual.
Key activities for the six digital pillars
The first two pillars relate to Objective setting and Control. Governance should be considered as part of strategy. The other tactics are four key implementation factors. For each, we recommend guides and templates our premium members can use to learn more.
1. Planning and governance
What? A dedicated or integrated plan for increasing the commercial contribution of digital channels for a business
Why? Our research shows that it’s common for businesses to not have integrated strategic plans or sufficient investment in digital marketing
Deliverables? Digital marketing strategy or transformation plan or a dedicated digital section integrated into marketing plan. Skills development plan. Marketing technology plan.
2. Goals and measurement
What? Customizing goals in Google Analytics and integrating data from different sources into a reporting dashboard system for quarterly, monthly, weekly or daily review
Why? Using a data-driven performance review system helps review your always-on and campaign-based activities to regularly review performance against target and then to take actions to drive growth. Many businesses haven’t customized analytics goals sufficiently.
Deliverables: Google Analytics audit and digital marketing dashboards
What? Using always-on paid, owned and earned digital media to generate brand awareness and drive targeted initial website visits and repeat visits. Update campaign process playbooks
Why? Always on media investment is essential to tap into customer intent as they search for products and services and review on social media and publisher sites
Deliverables? Customer acquisition plan. Updated campaign plan and editorial calendar plans
4. Content marketing
What? A defined content marketing strategy engages and converts prospects provided content is surfaced via the website experience through clear customer journeys
Why? Quality content fuels search, social, email and PR activities and support conversions
Deliverables? Content audit. Content marketing strategy. Content distribution plan including influencer outreach.
5. Digital Experience (website)
What? Company websites (and mobile apps where relevant) are at the heart of marketing since they position your brand to support online and offline lead generation and sale
Why? Websites often fail to provide clear customer journeys, emphasize brand value and differentiation or surface relevant content recommendations to support purchasers
Deliverables? Customer personas. Website effectiveness audit. CRO plan.
6. Conversational messaging
What? Personalized messaging across email marketing, mobile messaging (push notifications and SMS), website-based personalization and chat (human-assisted)
Why? Personalized communications maximize relevance, interaction and response
Deliverables? Email / marketing automation contact and targeting strategy. Sales cadences. Website personalization strategy including chat-based tools. Digital customer care plan.
Stage 5. Action
Stage 5 is focused on turning your plan into action. The action section covers what needs to be achieved for each of the tactics listed in the previous sections of the SOSTAC® plan to realize the objectives of your digital marketing plan.
This will include project plans and roadmaps of activities as recommended in our transformation toolkit.
Change management plans are a key success factor for transformation since staff need to be fully involved and informed as changes introduced will affect their way of working. Our change management for digital transformation recommends best practice approaches.
It will also include consideration of your marketing technology stack as described in our guide to marketing technology selection.
Stage 6. Control
Our RACE digital marketing dashboard in Google Sheets is used by our premium members to review performance based on an API integration with Google Analytics.
Summary – your digital transformation strategy success factors
Success in transformation requires sufficient investment in digital marketing activities. We recommend transformation projects ensure sufficient investment across these six pillars:
Digital marketing governance or management: Governance defines the resources and infrastructure needed to develop strategies, action plans, resources, budgets, and KPI dashboards to test, learn, refine, and integrate all marketing and sales communications. Key infrastructure investments are marketing technology, data, insight and optimization.
Digital goals and measurement. Setting SMART objectives and defining goals in analytics for regular review and corrective action using digital marketing dashboards.
Digital media: Grow awareness through integrating paid, owned, and earned media with sufficient investment to gain visibility as customers search for your products and services.
Digital content marketing: Create quality, sector-leading content to fuel all your marketing activities from search to social to email marketing.
Digital customer experience: Optimize websites, apps, and company social media pages. Integrate your digital marketing with customer-facing sales and support staff to engage, explain, and convert.
Digital messaging or ‘conversation marketing’: Deploy personalized communications to welcome, educate, and nurture prospects and customers across websites, email marketing, and mobile notifications.
In our experience of reviewing organizational digital capabilities as part of digital transformation projects, we find that there is often a listless approach to improving digital marketing. Once projects are completed, pages are implemented or products launched, it’s easy to feel that the job is done. This thinking is transferable to in-house digital marketing skills and processes. It’s critical that you ask yourself regularly: “This is how we’re doing it now, but what can we do to improve?”
Here’s a summary checklist of 10 key success factors for digital transformation that you need to communicate as part of your vision of how an organization needs to change in the future:
1. Management and governance: Engaging all relevant stakeholders to define a vision for how digital can strengthen the organization. Setting goals and selecting costed digital initiatives in a prioritized roadmap that align with your business strategy.
2. Brand development: Digital media and data should enhance your brand, by designing and developing a digital value proposition for your target audiences that complements your existing brand characteristics and counters digital disruption in your sector.
3. Integrated lifecycle communications activities: Digital is sometimes treated as a silo, but customer journey and contact strategy should select relevant paid, owned and earned media activities across digital AND traditional communications. These include both ‘always-on’ and campaign communications.
4. Content: The quality of digital and physical content and how it is surfaced at different points in the customer journey through relevant website design and content distribution channels like search, social, and email marketing is the most important practical factor in increasing reach and persuasion.
5. User experience: Research shows that a poor website experience will result in lost business and a lack of engagement with internal stakeholders. So benchmarking and reviewing both product and relevant digital experience through voice of the customer (VoC) and surveys is a key part of transformation. The website, increasingly accessed by smartphone, is traditionally the key digital experience alongside email marketing. Social media platforms are often the main experience of a brand online in some sectors, particularly as social networks like Facebook and LinkedIn seek to own service transactions between brands and their customers.
6. Resourcing: People, organizational structures and agencies. You will have some digital specialists and agencies, but as part of transformation, it’s important to ensure digital marketing competencies are developed across the organization through skills audits and training.
7. Change management: Digital transformation should be an organization-wide initiative which will be implemented over a period of several years. So ensuring your teams understand the why, what and how of transformation and the impact on their work is important.
8. Improvement process: We believe in a data-driven approach to improvement which requires relevant insights from digital analytics and audience research to inform structured testing such as AB testing to improve the effectiveness of your communications.
9. Data and insight: Digital interactions generate vast quantities of data, but this is only of value if it is applied to improve the customer experience and your results. So defining a process for combining digital analytics with customer and market research is needed.
10. Marketing technology: This is the last factor since selecting the right systems is most important as an enabler to support your digital transformation strategy.
These success factors are consistent with McKinsey research on unlocking success in digital transformations which highlights the importance of senior involvement for governance and to support change management and collaboration.
How can Smart Insights help?
Our premium Smart Insights resources are dedicated to helping businesses navigate the transformation process. Use the transformation playbook in our Digital transformation toolkit to check the key activities to include in your roadmap.
Each learning path integrates with Word, Excel and Powerpoint templates to help you map, plan and manage your transformation.Recommended learning paths:
Digital transformation course – for leaders managing digital transformation projects
RACE planning course – for team members creating and implementing strategies
Channel-specific courses covering digital channels and planning techniques including Campaign Planning, Analytics, SEO, content marketing, digital experience, email marketing automation and Social media marketing
We see that digital transformation projects focusing on customer service and operations tend to be more heavily featured in case studies and we recommend enterprises to initially focus on digitally transforming these areas.
Outsourcing is an important strategy for many companies’ digital transformation initiatives.
Most successful digital transformation projects focus on customer service and operationsJioMart
JioMart is one of the largest Indian e-commerce companies that focuses on online grocery shopping, fashion, and home essentials. In May 2023, JioMart was completely launched in 200 Indian cities. They offer over 50,000 products and process more than 250,000 orders per day.
Note 1: To see the capabilities of chatbots, you can request a demo from Haptik.
Note 2: You can download Haptik’s report, The State of WhatsApp Marketing 2023, to learn more about the recent changes in WhatsApp marketing and WhatsApp chatbots.Michelin-EFFIFUEL
Michelin, a global tire manufacturer, launched its EFFIFUEL initiative in 2013 to reduce the fuel consumption of trucks. In this context, vehicles were equipped with telematics systems that collect and process data on the trucks, tires, drivers habits and fuel consumption conditions. By analyzing this data, fleet managers and executives at the trucking companies were able to make adjustments to reduce oil consumption.
Business challenge: Inability to improve customer retention rates to target levels, due to trucks’ fuel consumption and CO2 emissions.
Target customers: Fleet managers and operations managers at truck companies in Europe
Line of business function: Customer success management and sales.
Solution: By using smart devices, truck and tire performance degradation is detected and maintained from the start. The solution also nudges truck drivers into more cost and environmentally friendly driving.
Business result: Enhanced customer retention and satisfaction. EFFIFUEL has brought fuel savings of 2.5 liters per 100 kilometers per truck. The company also reduced the environmental costs of transportation activities. According to Michellin, if all European trucking companies had been using the EFFIFUEL initiative, it would have caused a 9 tons of CO2 emission reduction.Schneider Electric-Box
Schneider Electric is a global company with employees all over the world. Prior to the Box initiative, which is a cloud-based solution, business processes were relatively slow because it is difficult to process the same documents from different locations at the same time. Schneider Electric also needed a way to provide data management and security for its globally dispersed workforce. So Schneider Electric outsourced its own custom cloud environment that integrates with Microsoft Office applications to Box. The platform also ensures tight control of corporate data with granular permissions, content controls and the use of shared links. Thanks to this initiative, the company has moved from 80% of its content hosted on-premises to 90% in the cloud and has a more flexible workforce.
Business challenge: Inability to increase operational efficiency of the global workforce without capitulating to data security.
Solution: Outsourcing company’s cloud-based platform to Box, that ensures data security and integration with Microsoft Office programs to ensure ease of doing business.
Business result: Schneider Electric connects its 142.000 workers within one platform which hosts 90% of its documents.Thomas Pink-Fits.me
The platform also helps chúng tôi gain better customer insight as previously unknown customer data, including body measurements and fit preferences, becomes available. In this way, the platform can offer customers the clothes that fit them better.
Business challenge: Lack of visibility into online sales and customers’ preferences.
Target customers: Online buyers and users.
Line of business function: Sales and customer success management.
Solution: Outsourcing the development of the online platform to chúng tôi Virtual Fitting Room .
Business result: Improved customer satisfaction and engagement. Thomas Pink reports that customers who enter the virtual fitting room are more likely to purchase a product than those who do not. There are many successful digital transformation projects from different industries, but we won’t go into every case study. Therefore, we provide you with a sortable list of 31 successful case studies. We categorized them as:
System Improvement: changing the way existing businesses work by introducing new technologies.
Innovation: creating new business practices, based on the latest technology.
Type of ProjectCompanyInitiativeIndustryBusiness FunctionCase StudyResults System ImprovementAppleCarPlayAutomotiveCustomer ServicePartnering with OEMs and apps such as Spotify to integrate an iPhone into vehicles’ infotainment system37 million sales estimation in 2023 Reducing the cost of having to hold a large volume of stock that often does not match a customer’s criteria. Reduction in CO2 emissions InnovationDaimlerMoovelAutomotiveMobility ServicesBringing together various means of transport, and plans the best route from A to B, enabling customers to choose between a range of different transport optionsMoovel has more than 1 million customers. System ImprovementMichellinEFFIFUELAutomotiveCustomer ServiceA comprehensive ecosystem including sophisticated telematics, training in eco-driving techniques and optimized tyre management system.A reduction in fuel consumption of 2.5 litres per 100km represents annual savings of €3,200 for long-haul transport Improving customer experience. System ImprovementThomas PinkFits.meRetailOperationsVirtual fitting rooms that collects customer data and uses it to match shoppers to garments that are right for them.29.6% higher conversion rate InnovationLegoEntertainmentOperationsFocusing on new revenue sources coming from movies, mobile games and mobile applications by leveraging digital chúng tôi first LEGO movie achieved revenues of approximately $468 million with a production budget of only $60 million. System ImprovementGeneral ElectricDigital WindfarmEnergyOperationsUse of sensors, data networks and analytics create turbines that are customized for peak efficiency.20% efficiency improvements, which could help generate up to an estimated $50 billion of value for the energy industry. Increased time-to-market by decreasing cycle times in sales, vendor order management, legal processes, employee records management and supply chain use cases. InnovationHospitals*Ginger.ioHealthcareOperationsProviding a complete, centralized platform to track a health system’s equipment across all facilitiesEach hospital is saving between $1 – 2 million in the earliest stages, and that total multiplies the longer a hospital uses the system. InnovationCohealoHealtcareOperationsUsing data from a patient’s everyday mobile usage (time spent on calls, text messages sent) and activity (distance travelled, sleep) to map patient behaviour and detect abnormalities by using AI.Improving clinical outcomes while reducing healthcare costs. Doctors can use time and resources more effectively. Producing aircraft parts which weigh 30-55% less, while reducing raw materials used by 90%. Over 9 million visitors give positive feedback. The platform had 157 million active users in 2023. System ImprovementWeChatCommunicationOperationsTransforming a messaging app into a powerful multipurpose platform that focuses on socializing functions.Improved customer experience InnovationBlipparTechnologyOperationsCombining augmented reality and image-recognition technology to bring the physical world to life through smartphones, tablets and wearables.45% revenue growth. System ImprovementStart-ups*Bolt.ioConsultingOperationsBolt invests and distributes hardware to early stage start-ups to help them transform digitally in areas such as strategy, team building, capital raising, product development, customer development, manufacturing, distribution and marketing.Shipped over 70 million units of 150+ SKUs of hardware products. More than 100 million users. Users find the desired information quicker. InnovationEdgePetrolPalladium**Analytics/OilProduct developmentDeveloping and implementing a product strategy to develop a product designed to improve Petrol Retailer profit margins.Agile development of MVP and on boarding of 3 key clients within 12 weeks InnovationMayflexPalladium**SecurityOperationsDeveloping digital strategy that includes profiling existing and future customers’ digital behaviour and expectations, understanding internal digital capability and identifying gaps and implementing digital tools to facilitate delivery of the pilot chúng tôi digital innovation pilot created £120+ sales pipeline in just 6 weeks InnovationStarbucksBeveragesOperationsLeveraging data and developing a mobile app to build consumer intimacy.Improved customer experience Each launch was 40%*50% quicker than traditional methods. System ImprovementKeller WilliamsKW LabsReal EstateOperationsUsing data to empower agents all around the world with several AI-powered appsOver 20% y-o-y sales volume increase InnovationIndusInd BankBankingOperationsCreating digital branches and enabling social media banking transactionsValued at approx.$1.5 billion and up 46% in value yoy System ImprovementMonsantoClimate FieldViewClimate/AgricultureOperationsUsing hardware and software intelligence to analyze weather patterns based on data collected through sensors.Farmers benefit from better yields, lower risks and higher profitability. System ImprovementBBVABankingCustomer ServiceProviding enhanced customer experience with the help of knowledge-driven personalization and clear communication.Active digital customers grew from 5 million in December 2011 to more than 13.3 million in mid-2023 System ImprovementNokiaQPR ProcessAnalyzerTelecommunicationOperationsNokia uses QPR’s process mining tool to harmonize misaligned processes that are created when M&A transactions happenedShortened lead time due to increased efficiency in running processes System ImprovementEneco Group (Joulz)QPR SuiteEnergyOperationsJoulz want to maintain and expand the distribution grid while minimizing the amount of interruption minutes per customer connection, therefore, they implement QPR Suite.Replacing the existing stack resulted in a structural saving of 75K Euro on software and maintenance every year and resource cost reduction of more than 15M Euro
If you are ready to start you digital transformation journey, you can check our data-driven and comprehensive list of digital transformation consultant companies.
To find out more about digital transformation, you can also read our digital transformation best practices, digital transformation roadmap and digital transformation culture articles.
You can also check our sustainability case studies article which include ESG related success stories.
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Transparency Statement: AIMultiple collaborates with many technology vendors including Haptik.
This article was drafted by former AIMultiple industry analyst Görkem Gençer.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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Ken Forster is the Executive Director and Founder of Momenta. He is a digital industry veteran who has been building ‘connected’ products, services, and businesses for over 30 years, with senior leadership roles at Syngenta, Coca-Cola, and Altria. He founded Momenta in 2012 after co-founding several industrial automation companies.A Leader’s Journey Towards Success
Ken was born at the intersection of technology and innovation. His father was an actual rocket scientist, and Ken followed his footsteps into the field of remote telemetry. It led him to his first start-up, joining Wonderware in the early days of the digitization of process control solutions. He co-founded three industry start-ups before serving in senior leadership roles at Altria, Coca-Cola, and Syngenta. A realization that the new term of Internet of Things (IoT) encompassed his experiences and perspectives of the ‘digital industry’ catalyzed him into founding Momenta.Innovation Runs Through the Company Culture
Momenta’s deep industry practitioners believe that companies with the best people, strategies, and innovation will be the winners in a digital future. Across three core practices, the company interacts with key leaders, disruptors, and thinkers working toward the digitalization of industry every day. Momenta focus relationships and intellectual property on core challenges faced by companies working in energy, manufacturing, smart spaces (which encompasses smart cities, smart buildings, and agricultural tech), and supply chain.Disruptive Technologies Playing Vital Role
Ken believes that the digital industry is just at the beginning of its impact – this digital revolution and patterns will keep transforming the factory floor and field operations for decades to come. Driven by global production and supply chains and ever-heightened needs to produce and operate more sustainable, resilient, and efficient products and services, digital technologies provide the catalyst to optimize and rethink business. As a by-product of the digitalization of industrial infrastructure, companies end up with improved efficiency, transparency, new business models, which contributes to the growing strategic and financial emphasis on ESG (Environmental, Sustainability, and Governance). Connected technologies are improving people’s way of life globally. Fueled by intelligent networks, the connected world shares massive amounts of data that can improve society in different ways, bringing value through deeper insights into everything people do. Focusing on technology-driven industries that the company knows exceptionally well, the team deeply integrates into customer engagements, helping clients transform from traditional enterprise to disruptive solution provider ready to stand the tests of time. Momenta likes the idea of investing in the future to change the world for the better and foster continuous adoption and innovation of emerging technologies.Future of the Company Lies in Digital Technology
Momenta is well-positioned to help shape the future of the digital industry. The company is already the leading digital industry venture capital firm accelerating digital innovators across energy, manufacturing, smart spaces, and supply chain. Momenta’s third digital industry fund is called AioT; based on the premise that Artificial Intelligence (AI) and IoT are closely related. Ken is also a strong believer that being part of ecosystems is critical for success; the complexity of products, supply chains, the ever-changing markets is too great for anyone organization to address on its own. Yet, the future of ecosystems goes beyond partnering; it is also about leveraging the sharing of data, applications, operations, and expertise.
Like every other industry, digital transformation is also revolutionizing the pharmaceutical sector. There has been a substantial increase in the digital health market since 2010, and according to a recent study, around 74% of respondents agreed that Covid-19 significantly accelerated digital transformation in the pharmaceutical and healthcare industry.
In another similar study, 35% of respondents specified that the sector had been digitally accelerated by more than 5 years (See Figure Below).
Figure 1. Covid-19’s impact on the digital transformation of the pharmaceutical industry
However, impulsive investments in digital solutions can also lead to undesired outcomes, project failures, and, eventually, financial losses. We have curated this article:
to put a spotlight on what digital transformation means for the pharmaceutical sector,
explain why it is important for the sector,
identify the key technologies being used in the sector,
and list some real-world case studies of digital transformation in the pharmaceutical sector,
to help business leaders in the pharma sector better prepare for their current and future digital transformation initiatives.What does digital transformation mean for the pharmaceutical sector?
Digital transformation in the pharmaceutical sector means implementing various digital technologies to improve the production and provision of healthcare products and services. Digital transformation can benefit the pharma sector in the following ways:
Improved drug development
Better patient interaction and care
Better drug research and development
Improved distribution of pharmaceuticals
Reduced carbon footprint
More transparency across the supply chain
Why is it important?
As digital technologies take over the world, pharmaceutical companies must stay up to speed to survive. Since the benefits of digital transformation abound, we are going to focus on the following points to get a clear picture:
1. Increased customer expectations
In the industry 4.0 era, customers have access to a vast amount of health information through online sources. They feel more in control of their health with devices such as fitness trackers and smartwatches. A study showed that about 85% of people felt confident about being responsible for their health and fitness through online sources of information. Pharmaceutical companies are investing more in patient engagement than ever before. Another survey suggested that digital technology is the path to better understanding customers and strengthening customer relationships.
2. Increased external competition
The current world is being driven by big data. Other than the internal competition, the pharmaceutical industry also faces external threats. Huge tech giants such as Apple and IBM are entering the healthcare industry with high-tech devices and online health communities, which gives them access to vast amounts of health data. As a result, pharmaceutical companies need to focus more on digital solutions to remain competitive.
3. Counterfeit market
The counterfeit drug problem has been aggravating across the globe. Digital technology has significant implications in the fight against counterfeit medicine. These solutions include the use of technologies such as Blockchain and Radio Frequency Identification (RFID) tags to trace the origin of the medicine and make the supply chain more transparent.
Watch how the pharmaceutical company Bayer Karriere embraces digital solutions for R&D:What are some key technologies that enable digital transformation in the pharmaceutical sector?
the figure below shows the future trends of the most disruptive technologies in the pharmaceutical sector.
Figure 2. Most disruptive future technologies in pharma
Source: Global data pharma intelligence center
Here are some key digital technologies and their use cases to achieve Pharma 4.0:
Automation is being used effectively to digitally transform a pharmaceutical supply chain. According to a report, automation has reduced healthcare administrative transaction annual costs by $122 billion.
Automation in drug manufacturing: Automation is being implemented and used to improve the manufacturing process of medicine and other pharmaceutical products. Robots can replace human tasks such as mixing chemicals and packaging medicine. This not only reduces errors in the process but also reduces the risk of contamination and biohazard.
RPA (Robotic Process Automation): RPA can be used to streamline the patient recruitment process of drug trials. Additionally, RPA can help improve regulatory affairs by gathering and verifying documents according to regulatory standards.
Blockchain technology has many implications in the pharma sector and a positive future:
Improves Transparency: Miscommunications between health professionals can cost the sector around $11 billion a year. Ledger technology based on blockchain can be used to securely transfer patients’ medical records and help reduce miscommunications.
Better traceability: Blockchain technology has promising implications for pharmaceutical supply chains. It can help trace the medicine from its origin to the ultimate consumer and help track labor costs and carbon emissions.3. Computer vision in pharma
Computer vision has the following implications in the pharmaceutical sector:
Quality control and packaging: Quality control and inspection in drug manufacturing and packaging can have various repetitive and error-prone tasks. Computer vision planted in manufacturing facilities can help increase inspection accuracy and precision.
Shipment tracking and drug traceability: In the pharmaceutical sector, it is crucial to track the drugs during shipment and trace their origin in case of unknown side effects. Computer vision does this efficiently through shipping label inspection, barcode detection and scanning, and serialization codes for enhanced traceability.
Physical document digitization: Through computer vision technology, important pharmaceutical documents such as clinical trial documents, patient reports or medical records, and lab records can be automatically digitized.
4. Internet of Things (IoT)
The figure below shows how IoT can be used in different components across the pharmaceutical value chain.
Figure 3. Implications of IoT technology in the pharmaceutical sector
5. ML, AI, and Advanced Analytics
AI technology is projected to increase by over $100 billion in revenue by 2025. As illustrated in Figure 4, AI innovation in the pharmaceutical sector has observed a significant rise in the past few years.
The key implications of AI are in the following areas:
Source: pharmaceutical-technology/GlobaldataWhat are some case studies on digital transformation in the pharmaceutical industry?
The following table presents some case studies on digital transformation and its impact on companies’ operations:
Type of projectCompanyBusiness FunctionCase StudyResult • Optimized production processes • Smooth decision-making process for the scientists • Improved demand forecasting accuracyFurther reading:
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Shehmir Javaid is an industry analyst at AIMultiple. He has a background in logistics and supply chain management research and loves learning about innovative technology and sustainability. He completed his MSc in logistics and operations management from Cardiff University UK and Bachelor’s in international business administration From Cardiff Metropolitan University UK.
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