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DIGITAL TRANSFORMATION

Digital Transformation: What

it is, case studies & best
practices
FEBRUARY 1, 2021 · 13 MINUTE READ

With the rise of personal computers in the 1980s, companies started going through digital
transformations to improve their products/services and reduce costs. Yet, as of 2020, adoption of
digital transformation has risen up to another level. Today, 89% of companies have already
adopted a digital- rst business strategy or plan to do so and 87% of companies think digital
technologies will disrupt their industry. This data shows how executives have already
acknowledged the importance of digital transformation and demand for digital technologies will
continue increasing.

However, according to Global McKinsey Survey results, only less than 30 percent of digital
transformation processes are success stories. Digital transformation is key to companies’ success
and can be achieved via company-wide alignment, design thinking and adoption of the leading
edge technologies.

1. What is digital transformation?

2. Why does it matter now?
3. What are the steps to digital transformation?
4. What are trending technologies in digital transformation?
5. What are Digital Transformation Case Studies?
6. What are examples of digital transformation failures?
7. What are Digital Transformation Best Practices?
8. What is AI transformation?
9. What value does digital transformation propose to industries?
10. How did pandemic affect digital transformation efforts of companies?
11. How to learn more?
What is digital transformation?
Let’s start with our digital transformation de nition:


Digital transformation is the process of
integrating digital technologies into all
aspects of a business to meet the market
and changing business requirements.
It aims to increase the effectiveness of business operations and customer relations. To achieve
these goals, organizations need to update their systems, processes, organizations and culture. 

Why does it matter now?

Competition is increasing and digital transformation is powerful leverage for companies that aim
to stay relevant. However, ~70% of digital transformation projects fail. Survey results below from
Harvard Business Review highlighted that only 23% of companies are not dependent on digital
products or operations. 

SOURCE: HARVARD BUSINESS REVIEW

Advances in digitalization such as personal computing, the internet, mobile computing, social
media and the recent advances in AI are such important technological innovations that cause slow
adapters to fail. For example, the retail apocalypse triggered by the rise of e-commerce forced
thousands of companies out of business. Failing to adapt to e-commerce as a retailer meant the
end of many companies.

For more statistics on digital transformation, we have an article where we compiled 80+ digital
transformations statistics from reputable sources that reveal the importance of digitization.

What are the steps to digital transformation?

Successful digital transformation (DX) requires a well-designed framework that will guide you
through your DX journey. This framework is our roadmap to digital transformation success.
However, if you want to see more frameworks from different consulting companies, you can check
out this article where we explained our framework comprehensively and listed ve other
out this article where we explained our framework comprehensively and listed ve other
frameworks.

#1 Identify digital transformation objectives

Determine the organization’s level of digitization and try to align the current state and long term
digital goals. Each organization, with different needs, has a slightly different set of transition
targets, but this is a crucial step towards organizational synergy. The gure below is BCG’s digital
maturity model which may be helpful to identify an organization’s level of digitization.

BCG ANALYSIS

#2 Formulate a digital transformation strategy

Set a clear objective and build a feasible game plan which involves selecting areas of improvement
and starting to integrate digital systems from those areas. The organization’s objectives should be
a step-by-step process and business may fail because of actions taken with haste.

#3 Decide on the necessary technologies enablers

Enablers such as IoT, Analytics, Cloud, VR, and AI are a vital driver for a successful digital
transformation. Organizations should make research and decide on which enabler would be the
best t for the organization.

#4 Establish competent technology leadership

Without leadership support, change projects tend to be unsuccessful. Having a CIO that is
strongly supported by the leadership team and has a business impact of digital transformation as a
KPI can be the difference between a successful and unsuccessful transformation.

#5 Train the staff and integrate a digital culture among the

organization

With the culture and education you provide across the organization, staff adapts to change easier
and each process in the rm is operating agile. Without cultural change, the company could miss
the next technology revolution and require another signi cant transformation effort to catch
up. These requirements lead to the question: “What kind of cultural attributes the organization
needs for a successful digital transformation?”. We have seen three major cultural change for the
companies that achieved digital transformation:

The organization is better connected and responsive across departments so that employees
return quickly to changing customers’ needs.
Employees are encouraged to solve problems.
Employees are ready to take risks, and if a risky action causes a breakdown, they are willing
to learn from the failure.
 to learn from the failure.

What are trending technologies in digital

transformation?
Robotic Process Automation

According to Gartner, Robotic Process Automation (RPA) was the fastest-growing segment of the
global enterprise software market. And as of 2020, the popularity of RPA has not declined and
businesses are continuing to adopt RPA software to leverage the power of automation in various
use cases.

Some repetitive back-of ce tasks where businesses can bene t from RPA to achieve improved
operational ef ciency are:

Data entry
Data extraction
Data updates
Data validation
Invoice processing
Payroll automation
Periodic report preparation

Cloud Technologies (Public, Private and Hybrid Cloud)

Due to the increasing volume of data, Software-as-a-Service (SaaS) and on-premise solutions on
the cloud are getting more popular among businesses. Cloud solutions address the need for
scalability so that organizations don’t need to transfer data between systems as the business
grows. 

Along with scalability bene ts, cloud technologies can also provide compliance with privacy and
security regulations.

IoT and Edge Computing

We’ve been seeing IoT devices in different use cases, such as predictive maintenance, for a while
now. However, advancements in edge computing and analytics are enabling businesses to invest in
IoT and edge analytics more. 

Businesses should bene t from these two technologies when

conditions, where data should be collected, are not suitable for human measurement
rapid changes and late responses to the change in the business environment can signi cantly
harm productivity.

Cybersecurity

The objective of the digital transformation is leveraging data and technologies that turn data into
insights to deliver better services and operational excellence. Yet, with great power comes great
responsibilities. (Yes, I quoted from Spiderman and I don’t regret it.) 

As the volume of data businesses must secure increases and we hear different data breach stories
that cost companies millions, the demand for cybersecurity technologies will continue to grow.
Three types of security solutions are businesses’ favorite:

AI-powered cybersecurity solutions: Using AI solutions to improve cyber and physical

security.
Cyber threat intelligence (CTI): Data collection and analysis to gain information about
existing and emerging threats to a business so that they can act before the data breach
occurs.
 occurs.
Endpoint security solutions: Securing business assets such as desktops, laptops, and mobile
devices that are connected to the company’s network from malicious activities.

Blockchain and Smart Contracts

Blockchain technology mostly emerges due to a lack of transparency and security provided by
legacy systems. In industries such as banking, insurance and healthcare, trust in the system is
ensured by central companies. Blockchain technology enables decentralization of trust and
enables customers to share their Personally Identi able Information (PII) and (Personal Health
Information PHI) and conduct transactions in a secure, veri able manner..

Smart contract is one of the most common applications of blockchain (After cryptocurrency) and
enables removing intermediaries, increasing ef ciencies. The technology has signi cant potential
to eliminate trust issues while engaging with third parties.

Data Privacy

Data privacy regulations such as GDPR in the EU and CCPA in California force organizations to
invest in privacy-enhancing technologies (PETs). 

Some PETs such as data masking solutions have been most of the organizations’ agendas for a long
time. This becomes more important due to use cases such as:

Advances in arti cial intelligence increase the appetite for sharing data with third-party
analytics vendors to build machine learning models for automating operational decisions
Realistic test data is crucial to a robust quality assurance process. Test data management
(TDM) solutions enable organizations to use realistic data while securing private
information using technologies such as synthetic data generation.

Telecommuting

Remote working has changed from a niche to a common form of work due to COVID-19 pandemic.
The bene ts of working from home is acknowledged by most companies and many plan to
continue the shift towards remote work. According to the 2020 Gartner CFO survey, 74 percent
of companies will move at least 5% of their previously on-site employees to permanently remote
positions post-COVID-19.

As a global team that has years of experience with the remote working approach, we wrote a
comprehensive guide about working from home. In this guide, you can nd bene ts, challenges,
best practices and leading solution providers of telecommuting for businesses and employees, feel
free to check it out.

Process Mining

Prioritizing bottlenecks to resolve is valuable but has always been a struggle for businesses. There
might be anecdotes showing that something is slowing down productivity, but without evidence, it
is hard to support these assumptions.

Process mining technology allows companies to mine processes to nd those bottlenecks and
boost process performance. Some use cases of process mining are process improvements such as:

Identifying drivers that hurt monthly revenue

Identifying root causes of changes to orders leading to rework
Identifying manual processes to automate

Process mining has more than 30 business applications. Feel free to read our related article to
learn other process mining applications.

Omnichannel
Omnichannel platforms serve organizations to create a single customer experience across
different channels. The omnichannel strategy puts the customer at the core of the business to
match the customer-centric objectives of digital transformation projects.

Arti몭cial Intelligence

Arti cial intelligence is the technology that can empower most of the technologies we listed above
thanks to its capability to process data at scale. However, in the context of digital transformation,
deploying AI mostly means deploying one of the following technologies:

Analytics: Process of collecting and analyzing data to gain insights. AI is embedded in

different tools in different industries. (Eg. Sales, Marketing, HR)
Conversational AI: Chatbots are innovative solutions to improve customer service along
with other bene ts. 
Autonomous things (AuT): AuT are machines that function on speci c tasks autonomously
without human interaction thanks to AI algorithms such as computer vision. There are three
types of Autonomous Things:
Self-driving cars
Drones
Robotics
Digital twins: Digitial twins are virtual replicas of physical entities such as devices, people,
processes, or systems that help businesses make model-driven decisions. Manufacturing,
healthcare, supply chain, construction and retail are main industries where we encounter
digital twin applications.

For more, please visit our list of 100+ AI use cases.

Must-watch trends:

Quantum Computing

Quantum computing is an effective computing approach for modelling the real world. Its
applications mostly focus on: 

Optimization
Material/healthcare research
Cryptography/espionage

Task Mining

Task mining technology monitors user interaction data using technologies like screen capture and
helps companies understand how they handle tasks. By combining this technology with process
mining, businesses can better understand their processes and take speci c actions for process
improvement.

What are Digital Transformation Case

Studies?
The best way to understand digital transformation is by examining successful case studies.
Therefore, we decided to make a list of digital transformation success stories.

During our research, we have observed these types of projects:

Transformation: Changing the way existing business operates,

Innovation: Creating new business lines based on the latest technology,

We’ve also seen that some organizations preferred to engage with a digital transformation
consulting rm while others relied on internal resources. Here are some example case studies
consulting rm while others relied on internal resources. Here are some example case studies
from established digital transformation consulting companies:

Nokia

M&A is an opportunity to make drastic changes in an organization and digital transformation is a

no-regret move for most companies. M&A also requires companies to harmonize the processes of
the new entity to ensure ef cient operations. For example, after Nokia nalized its acquisition of
Alcatel-Lucent, they experienced misalignment in order-to-cash and purchase-to-pay processes
because these two companies had completely different process dynamics. Nokia used QPR
ProcessAnalyzer to harmonize these processes. In return, Nokia was able to analyze and improve
processes to reduce lead time.

Anthem

In McKinsey’s case study with Anthem, a healthcare company, alignment across the organization
and having an effective adoption strategy was highlighted as key success factors. Anil Bhatt, vice
president and head of digital solutions and experience for Anthem, focused on building agile
structure, creating talent and establishing the right leadership to maximize output from digital
transformation.

Western Union

Dan Nordlander, senior vice president of Western Union Way Operations at Western Union,
points out the importance of alignment across departments and having senior managers drive the
transformation in digital transformations. He mentions that the manager should understand what
is easy about the job and what is not rather than inspecting employees. Managers are able to get a
better sense of processes and can make the process easier for employees and better for clients.

You nd many successful digital transformation projects from different industries but we won’t go
into detail for each case study. Therefore we provide you a sortable list of 31 successful case
studies:

SHOW 5 ENTRIES SEARCH:

Type of  Company  Initiative  Industry  Business  Case Study  Results 

project Function
Transformation Apple CarPlay Automotive Customer Partnering with 37 million sales
Service OEMs and apps estimation in
such as Spotify to 2020
integrate an
iPhone into
vehicles'
infotainment
system
Transformation Audi Audi City Automotive Marketing Transforming At Audi City
and Sales traditional London sales
showrooms into went up 60%.
virtual Reducing the
showrooms with cost of having
multi-touch to hold a large
tables, tablet-user volume of
interfaces and stock that
powerwalls. often does not
match a
customer’s
criteria.
Innovation BMW DriveNow Automotive Mobility A car sharing 40% of the
Services service that respondents
promotes said that they
sustainable would have
mobility with bought a car if
electric cars. DriveNow
hadn’t been
available.
Reduction in
CO2 emissions
Innovation Daimler Moovel Automotive Mobility Bringing together Moovel has
Services various means of more than 1
transport, and million
 transport, and million
plans the best customers.
route from A to B,
enabling
customers to
choose between a
range of different
transport options
Transformation Michellin EFFIFUEL Automotive Customer A comprehensive A reduction in
Service ecosystem fuel
including consumption of
sophisticated 2.5 litres per
telematics, 100km
training in eco- represents
driving techniques annual savings
and optimized of €3,200 for
tyre management long-haul
system. transport

Showing 1 to 5 of 31 entries  Previous Next 

What are examples of digital transformation

failures?
There are too many to list but a recent example is how CDC failed to roll out an effective, nation-
wide vaccine management system for the COVID-19 vaccination program after spending $44M
with a consultancy rm.

What are Digital Transformation Best

Practices?
Since only less than 30 percent of digital transformation processes are success stories, it is
important to understand best practices to ensure the success of digital transformations.

Synchronize Efforts

When organizations plan to implement an agile process, IT and management should be working
together on the project. Business rst mentality is de ned as “At a deeper level by acting as a
catalyst or facilitator to get the best out of others and to build a stronger organization for long
term success.” by Mitch McCrimmon. Business mentality should be prevalent across the
organization so that IT and management crews work ef ciently to keep the team focused on
customer needs and objectives of the project.

Align Staff From Start

As mentioned before, culture change is a must for digital transformation due to avoid failure. To
achieve cultural change across the organization, communication about the digital transformation
and having initiatives to digitize the culture such as prioritizing design thinking and
experimentation are important.

Look Through the Perspective of Customers

Organizations mostly decide to sell a journey or experience rather than a product, once they
initiate digital transformation. Organizations should search the answer to which kind of services
will the business offer to customers to build a sustainable relationship. Establishing an effortless
and computerized interface to interact with them is an essential tool to be a support service
during or after the purchasing process.

Leverage the latest technology

 According to Forrester, up to 93% of companies agree that innovative technologies are necessary
to reach their digital transformation goals. Vendors have incentives to sell service costs and try to
sell outsourcing services instead of the latest technology which reduces the need for outsourcing.
sell outsourcing services instead of the latest technology which reduces the need for outsourcing.
You should ensure that you are getting the optimal technology during the digital transformation.

Invoice processing is such an area where companies need to pay attention:

Best practice solution is:

Having an EDI (Electronic Data Interchange) auto process most of your invoices as you
onboard new suppliers into your EDI.
Getting all remaining digital invoices in a single email address so they can easily be
managed. Getting physical invoices in a shared service center where they are scanned
by high-quality scanners.
Using a deep learning based data extraction/processing technology to automatically
process most of the invoices that arrive outside of the EDI. Having a human in the loop
in cases where automated extraction con dence level is low
However, a vendor incentivized to sell services could try to sell you an outsourcing service
which will be higher cost, slower and less accurate than the above solution. Additionally,
more people will need to do the boring job of manually extracting data from documents

What is AI transformation?
While companies still talk about digital transformation, a new transformation is underway: AI
transformation. With the rise of deep learning and most major tech companies claiming to be AI-
rst, it is clear that AI will create major opportunities for business.

Like digitization, AI has the potential to transform a company’s both back and front of ce, making
it more ef cient and effective. Companies should not pass the opportunity to embed AI into their
decision-making systems while completing their digital transformation. You can use our AI use
cases to nd out-of-the-box solutions for your company or look into our guide for building custom
AI solutions for your business.

If you want to learn more about custom AI solutions, feel free to read our whitepaper on the topic:

Download our in­Depth Whitepaper on Custom AI
Solutions

What value does digital transformation

propose to industries?
Healthcare

These are the main players in the healthcare industry and digital transformation proposes
different bene ts to each player:

Healthcare providers/Hospitals: Digital transformation can lead to improved patient care

thanks to digital technologies that assist doctors and while reducing operation costs.
MedTech / healthtech companies: These companies are technology providers and they
enable digital transformation and serve digitally savvy companies. Increased digital
transformation increases their addressable market.
Pharma companies: Digital technologies that enable them to collect and share data for
research purposes and facilitate personalized care.

For more information on digital transformation in the healthcare industry, feel free to check our
article.

Retail

Retailers focus on three aspects of transformation:

Customer experience: Customer experience is the key factor for a business to differentiate
 Customer experience: Customer experience is the key factor for a business to differentiate
from its competitors. 
Enterprise agility is at its heart, launching Minimum Viable Products (MVPs) with quick
decision making and iteration.
Operational cost reduction: With analytics, businesses can reduce their operational costs
such as supply chain.

For more information on digital transformation in retail, feel free to check our related article.

Banking

Digital transformation offers banks automation opportunities and digital banking products that
enable secure and frictionless customer journeys.

For more information on digital transformation in banking, feel free to check our article.

Real Estate

Digital technologies are evolving the real estate industry via services such as virtual tours,
automated transactions and personalized services that can enhance the home buying experience
while automating tedious tasks for real estate agents.

For more information on digital transformation in real estate, feel free to check our article.

Insurance

With digital technologies, insurers can automate tasks such as claim processing and fraud
detection so that they can focus on developing customer centric products.

For more information on digital transformation in insurance, feel free to check our article.

Professional Services/ Consulting

Digital transformation has fundamentally changed the consulting landscape. New players such as
Accenture that entered the market in the 90s have grown far beyond traditional management
consulting companies such as Mckinsey and BCG. 

As a result, traditional consultancies are playing the catchup game, buying digital focused
companies, launching digital/AI focused divisions and remarketing themselves as tech/digital
consultancy companies. 

For more information on how digital & AI is evolving consulting, you can check out our articles
below:

Digital transformation consulting

AI consulting
Machine learning consulting
RPA consulting

How did pandemic affect digital

transformation efforts of companies?
SOURCE: PWC

In uence of pandemic on  businesses has been harsh. According to PwC survey, over 50% of
companies in US are either deferring or canceling their planned investments due to pandemic.
However, IDC study highlights that businesses are not deferring or canceling their digital
transformations investments. Despite pandemic, global spending on digital transformation
technologies and services was estimated to grow 10% in 2020 to $1.3 trillion.

Google trends data also reveals that the interest in digital transformation has reached its peak
during pandemic:

SOURCE: GOOGLE TRENDS

How to learn more?

Solution providers and consultants organize numerous digital transformation events so digital
transformation professionals from different companies can network and learn from one another’s
experiences. Feel free to check out our prioritized, sortable, lterable list of digital transformation
conferences for business users.

And if you are ready for what comes after typical digital transformation projects, feel free to read
our articles on AI transformation:

Top AI use cases

Business processes that can be automated with AI

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Cem Dilmegani
Cem founded AIMultiple in 2017. Throughout his career, he served as a tech
consultant, tech buyer and tech entrepreneur. He advised enterprises on their
technology decisions at McKinsey & Company and Altman Solon for more than a
decade. During his secondment, he led the technology strategy of a regional
telco while reporting to the CEO. He has also led commercial growth of AI
companies that reached from 0 to 7 gure revenues within months. Cem
regularly speaks at international conferences on arti cial intelligence and
machine learning. He graduated from Bogazici University as a computer
engineer and holds an MBA from Columbia Business School.


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