Fall of an Empire: The Story of Sears
Long before Amazon or eBay, in the pre-internet era, there was Sears. The 125- year old company used to be the greatest innovator in the retail business: Sears was the first to start selling goods through mail marketing, first to make consumer credit widely available, and was a co-creator of the very first consumer online service.
This all started to change when in 1990, Walmart (with its fast service and low prices), had replaced Sears as the world’s largest retailer.
Then, 1994 became the year eCommerce was born: Amazon started its victory march to replace both Sears and Walmart, as well as dozens of other retailers. Soon, Sears found itself in the same position as the other stores it used to drive out of business back in the 1890s. Sears, once a leader in its niche, has recently filed for bankruptcy.
Walmart, in its turn, not only survived the Amazon competition but became its major rival — all thanks to its commitment to innovations. The retailer invested heavily in technology to improve its customer experience: Pickup Tower to facilitate a faster pick-up experience, Scan and Go service to speed up checkout lines, and ordering kiosks for deli orders, to name a few. Needless to say that Walmart’s digital strategy paid off well. Today the competition between Amazon and Walmart is fierce: the retail giants are in a constant “arms race”, trying to win over the market with innovations. Although it is too early to say who will win this battle, it is already clear that all other old-schools retailers, that haven’t adapted to the digital age, have already lost.
Sadly, the case of the retail industry isn’t a one-off incident: there are dozens of companies across other industries that failed to keep up with the market demand and were disrupted by tech-savvy competitors.
With all the innovative technologies and emerging business models, digital transformation has become a matter of survival. It is the only way to compete in today’s fast-paced market, even for the established market leaders. If you ignore the market demand and resist change, you’ll be at risk of being left behind once a new, tech-enabled market entrant joins the race.
So, if you are looking to future-proof your business, this eBook can serve as a good starting point on your digital transformation journey and help you lay a solid foundation for its success.
What does “digital transformation” mean and why does it matter?
Digital transformation means adapting the existing business processes (or creating completely new ones) with the help of technology to meet the evolving market requirements. While digital transformation typically includes cloud migration and the modernization of legacy systems, the process itself is far more complex.
To transform your business, you need to rethink everything you do, both internally and externally, focusing on your clients and their experience.
A modern, digital business is, first of all, a customer-centric business. However, the most important benefit of a digital transformation is financial, and here’s why.
What are the major opportunities that lie within digital transformation?
Digital transformation allows you to address the two core needs of every business —the need to increase revenue and the need to reduce costs.
How can digital transformation help you grow your revenue?
- Creating new, digital revenue channels.
- Shortening time to market for new products thanks to the agile approach.
- Catering to a broader audience, both demographically and geographically.
- Creating better customer experience thanks to faster order processing, efficient customer support.
How can digital transformation help you reduce operating costs?
- Reducing maintenance expenses (cloud vs on-premises infrastructure).
- Improving employee productivity and mobility.
- Automating routine processes.
Now, to put it into perspective, let’s see how your organization can benefit from the use of technologies (and consider some real-life examples too).
7 Ways Digital Transformation Can Fuel Your Business
1. Cloud Migration and Modernization
Building a future-ready business upon decade-old technologies is difficult, if not impossible. By moving your infrastructure to the cloud, you simplify its maintenance and facilitate its growth.
- Reduced maintenance cost and effort
- Unlimited infrastructure scalability
- Improved safety and reliability
- A shortened time to market due to easy deployment
Case in point:
One of our clients, a leading foodservice data provider wasn’t able to utilize new revenue channels because of the outdated on-premise infrastructure that didn’t allow for remote access to most of the data.
Challenge:
The on-premise infrastructure lacked the ability to support instant access to the data remotely, limiting providers’ options for monetization.
Solution:
A modern, cloud-based infrastructure brought up new opportunities for monetization, such as a subscription-based model and ‘pay as you go’ service, providing access to new, digital revenue channels.
2. Employee Mobility
Allowing your staff to access and report the required information at any time, anywhere, can be a substantial contribution to their productivity (and, as a result, to your business efficiency).
- Higher staff efficiency
- Real-time collaboration
- Instant access to business applications and data
Case in point:
Ryanair, a leading European low-cost carrier, was looking to improve their operational performance and introduce a more convenient and easy way for the crew to access the required information in-flight.
Challenge:
One of the main challenges was that there was no convenient and efficient way to deliver up-to-date information to the crew instantly, e.g. real-time aircraft performance calculations and navigational charts. Outdated paper manuals traditionally used by the pilots were too heavy and difficult to use.
Solution:
Ryanair provided their 3,500 pilots with electronic flight bags, switching from paper flight manuals to lightweight iPads with pre-uploaded flight manuals and direct access to real-time flight information. This led to a lower fuel burn thanks to more accurate flight calculations and a reduction of weight on board. It also contributed positively to flight safety by reducing the risk of human error.
3. Process Automation
Routine tasks are extremely time-consuming and, as a result, wasteful. By using the right technologies, you allow your staff to focus on what matters most – your customers – and save your resources.
- Fast and effortless execution of time-consuming routine tasks.
- Improved staff productivity.
- Reduced risk of human error
Case in point:
One of the leading US financial service providers, JPMorgan Chase, was looking to streamline some of their internal tasks, including the review of commercial credit agreements.
Challenge:
The traditional process was extremely labour-intensive: it took the organization’s legal staff approximately 360,000 hours to review all of the 12,000 annual commercial credit agreements. Plus, any manual process typically assumes the risk of human error, which can lead to additional expenses.
Solution:
To solve this problem, JPMorgan Chase introduced the Contract Intelligence (COiN) platform. The software, which is based on a machine-learning algorithm, allowed the company to process the same amount of documents in seconds and eliminate the risk of human error
4. Artificial Intelligence and Machine Learning
Similar to automation, AI and machine learning can be a great way to save your budget and resources. Some of the areas of application for these technologies include customer service, security, process optimization, customer experience personalization, etc.
- Routine tasks optimization.
- Improved, personalized customer experience.
- Reliable, always-on service
Case in point:
A major US banking provider, Bank of America, decided to pursue the digitization path, focusing on the customer experience. Above all, the company needed a convenient way to offer mobile banking services and personal financial advice on demand.
Challenge:
The company was looking to add more value to its mobile banking service offering to further improve its customer experience. Plus, they needed a reliable tool to serve their customers’ needs 24/7.
Solution:
To cater to this need, the company created Erica — a virtual financial assistant accessible via the Bank of America app. By using predictive analytics and cognitive messaging, this chatbot can provide 24/7 financial guidance to its users and make personalized suggestions based on their income and spending habits. The initiative had a great response: in just 3 months after its launch, more than 1 million customers have used the chatbot
5. Big Data and Predictive Analytics
By drawing valuable insights from the data they accumulate, organizations can find and address operational bottlenecks as well as better target their service/product offerings to meet the customers’ needs.
- Real-time insights on your business performance.
- Optimized operational efficiency.
- Improved product/service targeting, based on the customers’ needs
Case in point:
The University of Chicago Medical Center (UCMC) was looking to optimize its operational efficiency by reducing its operating room delays.
Challenge:
Operating room delays can be frustrating for both clinicians and patients, and as a result, have a negative impact on the customer experience as well as employee efficiency. Plus, they are extremely wasteful as operating rooms are expensive to run. However, there is a certain procedure the staff needs to follow after surgery ends and before the next one can start. As a result, such delays are hard to prevent or even predict.
Solution:
The UCMC employed real-time data analytics and a complex algorithm to streamline internal workflows and orchestrate the operating room transition from one surgical team to the other. As a result of this move, the organization was able to reduce the operating room turnover by 15-20% (up to 4 minutes per room) which, in turn, resulted in an additional $600,000 cost savings.
6. The Internet of Things
Along with mobile solutions, IoT technologies facilitate employee productivity across a number of business aspects, including warehouse management, logistics, etc. Customer-facing IoT solutions can help you improve your CX and open new data sources.
- Enhanced employee mobility and, as a result, productivity.
- Better customer experience.
- Additional source of valuable business data
Case in point:
A hotel chain with over 5,000 locations worldwide, Hilton, was looking to improve their customer experience by empowering their guests to take full control over their stay.
Challenge:
Facing severe competition from tech startups, including Airbnb, Hilton had to shift the company’s focus to provide a better, more up-to-date, personalized customer experience.
Solution:
As a result, the company introduced the Connected Room concept. The room is equipped with smart devices, which allow you to control the lighting, heating, ventilation, and air conditioning using the company’s Hilton Honors app. The same app works as a digital room key and provides access to personalized entertainment content. In addition to the improved customer experience, the solution helped the company gain an additional source of valuable user data and further personalize its services, based on user preferences.
7. Augmented/Virtual Reality
AR/VR technologies provide an opportunity to build meaningful connections with users and add more value to products/services, e.g. offering a more convenient or entertaining way to interact with it.
- Added value for your product/service.
- An improved user experience.
- The ability to reach a broader audience
Case in point:
A large Swedish home retailer IKEA was among the first to integrate AR capabilities into their mobile app.
Challenge:
The company wanted to make mobile shopping even more convenient and reach a broader audience so that those people who can’t come to the physical store can still buy from IKEA. The problem was that making a purchase decision based solely on the product description is a significant deal breaker.
Solution:
to solve this problem, IKEA introduced AR capabilities within their mobile app. This allowed their users to “try on” the furniture to see how it looks in their interior prior to making a purchase. As a result, IKEA managed to keep its market share and stay competitive in the age of Amazon and eBay.
How do you know if your business needs a transformation?
The cases described above serve as a great example on how technologies can set a business apart. So, in case you still have any doubts as for the importance of digital transformation for your business, ask the following questions:
- Do you still rely on manual data input and processing for logistics and inventory management?
- Is your on-premises server infrastructure maintenance the major expense item on your IT budget (and does it keep growing)?
- Do your in-store sales continue to decrease because of the outdated customer experience?
- Do your customers leave because you fail to deliver upon their expectations?
- Does it take days to process a single customer support request?
- Are you struggling to expand your service/ product offerings and scale your business?
- Do you need to maintain multiple, disparate internal tools because you can’t merge them into one system?
- Do you feel a growing pressure from your competitors, but can’t keep up?
- Do you keep piling up user data, but lack a comprehensive strategy on how to drive any benefit from it?
If your answer to any of these questions is “yes” — digital transformation is the right choice for you.If your answer to any of these questions is “yes” — digital transformation is the right choice for you.
Start your digital transformation journey today
Despite all of the benefits, mentioned above, digital transformation shouldn’t be taken lightly. It is an ongoing process that takes time, resources, and the dedicated effort of a professional team.
So, if you lack the expertise in-house, consider hiring a professional. Our team at Eastern Peak can offer professional consulting to help you get your digital transformation off the ground and lay a solid foundation for its success.
Book a free project discovery workshop with our digital transformation experts to:
- Discuss your business challenges and pain points.
- Learn how technology can help you overcome your challenges.
- Develop a detailed roadmap for your digital transformation.
