CIO.com
13 real-world digital transformation success stories
By: Client Boulton
Companies are increasingly launching digital initiatives to expand or build digital capabilities aimed at business efficiency or top-line revenue growth. And as digital transformation success stories emerge, the trend is gaining steam.
Nearly 2,600 CIOs Gartner surveyed last year said they devote 18 percent of their budgets to digital transformation, a figure set to increase to 28 percent by 2018, Gartner analyst Andy Rowsell-Jones told CIO.com. Going digital often means significant challenges and consequences, says Rowsell-Jones, adding that companies are overhauling their business models and allocating more of their IT budgets to catch digital disruptors.
Indeed, a new Gartner survey shows that 95 percent of 3,160 CIOs expect their jobs to change or be remixed due to digitalization. Respondents believe that the two biggest transformations in the CIO role will be the need to become a change leader, followed by increased and broader responsibilities and capabilities. Moreover, technology trends such as cybersecurity and artificial intelligence (AI) will significantly change how CIOs do their jobs in the near future.
"The CIO's role must grow and develop as digital business spreads, and disruptive technologies, including intelligent machines and advanced analytics, reach the masses," says Rowsell-Jones. "While delivery is still a part of the job, much greater emphasis is being placed on attaining a far broader set of business objectives." Those areas include innovation and talent management.
The stakes are high. Leading digital companies generate better gross margins, better earnings and better net income than organizations in the bottom quarter of digital adopters, according to Harvard Business School. Leaders post a three-year average gross margin of 55 percent, compared to just 37 percent for digital laggards.
To help you on your digital way, CIO.com checked in on 13 digital transformations underway at some of the world’s leading brands. Following are snapshots of their digital initiatives in progress.
Sprint
If you've ever wondered what digital transformation looks like at a telecommunications carrier, look no further than Sprint. The telco, under pressure from large rivals such as Verizon and AT&T and in merger talks with T-Mobile, is reinvesting in technology after years of significant cost reduction, says CIO Scott Rice, who is leading the charge. The focus is largely around analyzing data to improve the customer experience.
Sprint is using Elastic Stack open-source software to churn through 50 terabytes of data generated by logs, databases, emails and other sources to gauge the performance of Sprint.com. That data helps IT staff determine where glitches are impeding Sprint’s ability to facilitate transactions, ranging from basic browsing, to phone purchases, to upgrades consumers are trying to complete online. Analyzing bugs and other delays helps Sprint determine when and why a customer is abandoning a transaction. Previously, each application team monitored its own software performance, creating large data silos that couldn't be leveraged to bolster performance, Rice says. “It’s a redesigned [customer] journey based on data,” Rice adds.
Sprint has also created a Hadoop-based data lake to analyze customer data, in an effort to improve the way it recommends products to consumers. For example, a 10-year user of Android phones will get Android phone offers. "It's about building a breadth of information about you and your relationship with us,” Rice says. Sprint’s transformation is continuing across all aspects of the business and the “IT organization is right in the middle of every transformation project," Rice says, adding that he is moving most of the organization to agile development conducted in small, self-directed teams to improve software delivery.
Town of Cary, N.C.
You might not associate the term “digital transformation” with a municipality but Town of Cary, N.C., CIO Nicole Raimundo is trying to create a slice of Silicon Valley in the south. She’s eliminating more than 100 disparate legacy applications the town uses to operate, including work orders, permits and onboarding, in favor of Salesforce.com. “I embarked on a platform strategy that would enable us to very quickly get quick wins,” Raimundo tells CIO.com. The platform, which includes field service, IT service management, marketing and collaboration tools, is intended to help Raimundo get a 360-degree view of Cary’s citizens, including utilities payments, parks and recreation class registration and other details.
Raimundo and her staff of 30 also built a “skill,” essentially a small app for Amazon Echo that will allow citizens to start the process of opening up work orders and other tools without using the phone to initiate such business processes. And, recognizing that people increasingly wish to facilitate transactions through messaging tools, she is also exploring the use of chatbots to let citizens initiate processes with town departments through their phones. “Our goal is to meet our citizens where they are,” she says. Also afoot: internet of things, including smart lighting, smart parking and smart recycling on the town’s municipal campus, which she says serves as a sort of innovation lab for emerging digital tools.
As part of this big culture shift, Raimundo has also created open workspaces and has employed agile and design thinking processes to propel minimum viable products. The Town of Cary has also hosted hackathons, ideally to lure talent from the local Research Triangle Park, which includes Red Hat, Cisco Systems, IBM, Microsoft and other top tech vendors. “Those are drivers to bring in the talent we want,” she says.
Xylem
CIO Nicholas Colisto has his hands full at Xylem. The maker of water management solutions includes five business units that have added several disparate systems over time. “The business was having trouble making [technology] decisions because they were so fragmented,” Colisto says.
Colisto’s staff has spent the past several years consolidating legacy IT systems in favor of a single platform focused on fostering customer engagement, operational efficiency and growth. The Xylem Integrated System (XIS), or Xylem One, as it’s also known, leverages social, mobile, IoT, analytics and other tools in a service-oriented architecture to help connect employees with customers. XIS helped the company generate over $30 million of net value in 2016. “We created a business operating platform,” Colisto says.
In 2018, IT will continue to execute initiatives across all priorities, but there will be more emphasis on business simplification efforts to better establish a continuous improvement culture, Colisto says. This will include a Global Business Services (GBS) unit designed to provide a new service delivery model and roadmap for savings through process improvements, standard technology platforms and robotic process automation (RPA).
StubHub
When CIO Marty Boos joined StubHub five-plus years ago the ticket retailer’s infrastructure was struggling to handle the sheer volume of a business that processes thousands of ticket transactions daily for concerts and sporting events. Leveraging Linux servers and technology from VMware, Akamai and Oracle, Boos built a private cloud that scales elastically. To better support global transactions in the wake of StubHub’s purchase of Ticketbis, Boos is close to picking a public cloud vendor to process payments locally in 44 countries worldwide. “We’re going to use that to get the transaction closer to the consumer,” Boos says.
The private but soon-to-be hybrid cloud supports several customer-facing initiatives. With more than 50 percent of StubHub’s traffic funneling in from mobile devices, Boos’ team is enabling sellers to use their phone to take a picture of tickets and post them online. The IT department is also working with business development teams to add music and other content to reimagine StubHub.com as more of a destination website, and mulling how to enable groups of Facebook friends to purchase and pay each other for tickets. “A lot of what we’re doing is making discovery and planning processes easier for customers,” Boos says.
HD Supply
Frank Olszewksi is preparing for the day when the construction industry finds itself “Uber-ized” and “Airbnb-ed” by digital trends in service delivery. To prepare for that day the HD Supply CTO has shifted a virtualized and software-defined data center into a co-location facility (so he doesn’t have to manage data centers) where the hypervisors and container technologies are programmable. That is, Olszewski’s engineers can shift, spin up and wind down compute resources by clicking a few buttons.
Olszewski says that this construct, combined with customer-facing mobile technologies will prepare HD Supply’s maintenance staff and field service agents to take pictures of parts with their smartphones, which query the company’s back-end systems to find out what fulfillment center they are located in. Ideally, this will enable HD Supply to provide same-day delivery to its customers. In the future, Olszewksi says that HD Supply may rent others’ distribution centers “Airbnb” style, as needed. “I need to be ready to handle these workloads, six or 12 months from now,” Olszewski says. “We will test, investigate and play with a few things.”
JetBlue
At JetBlue, CIO Eash Sundaram has deployed high-speed internet and streaming, mobile payments, and other tools to improve passengers’ experiences. Earlier this year the company launched JetBlue Technology Ventures (JTV) to invest in startups seeking to bring to the travel market machine learning and analytics as well as new approaches to customer service. Think of it as another channel for innovation. "If you just pile everything into the mothership, things don't move as fast as you want them to move," says Sundaram, who has also set his sights on near field communication as a replacement for self-service kiosks and check-in desks.
Domino’s
Domino’s Pizza has incorporated capabilities to allow consumers to place orders from any computing device. The company's AnyWhere platform allows you to place orders through smartphones, smartwatches and smart TVs, by entering orders into the Domino’s website, and by tweeting and texting emojis. “Choice drives our whole mobile and digital platform,” Domino’s CIO Kevin Vasconi tells CIO.com. “Millennials love that.” Domino's current challenge? Getting Dom, its voice-activated virtual assistant, to understand and facilitate all of the different ways people order food through speech.
Target
Target's digital journey has suffered through its fits and starts and a devastating data breach in 2013 didn't help matters. To help jumpstart its digital transformation, the retailer hired CIO Mike McNamara from Tesco, where he had led several digital initiatives for the U.K. grocery chain. McNamara spent much of 2016 flipping the software development model from outsourced to insourced and spearheading custom software development, including new supply-chain applications to better align inventory availability with consumer demands.
Wal-Mart
Like Target, Wal-Mart has been refashioning its software stack as a custom platform, which includes a new search engine and several cloud applications. Based on OpenStack, Wal-Mart's new ecommerce platform is designed to help the retailer compete better with the OpenStack cloud platform. In fact, open source is a huge part of Wal-Mart's digital transformation. The group earlier this year launched OneOps, a platform that lets programmers test and switch among different cloud providers, a crucial benefit as companies embrace hybrid cloud models.
