John Deere makes tractors. John Deere is at the forefront of digital transformation. These two sentences are not mutually exclusive. In fact, John Deere is just one of the many companies that has transformed their businesses by investing in digital technologies to add value to their products. 

Once purely a hardware manufacturer, the tractor company has integrated software, network connectivity and data collecting sensors into its machinery. At the same time, the company has managed to get ahead of the digital curve, offer real value and stay relevant.

Tractors are the last area where people expect to see digital transformation, but John Deere is the perfect example of a company concentrating on what it’s good at, adding value and a big dash of inspiration to picture where it wants to be in the future. It’s one of the winners in the digital transformation race, joining companies like Domino's, Pages Jaunes and Christie's Auction House who have managed to transform their business models.

Nobody wants to know about the losers now. Yet companies like Blockbusters, RadioShack and Encyclopedia Britannica were once the experts in their field, not too long ago. Now they’re just companies that somehow missed the bus. They failed to realize that it’s no longer really just about the product. Without thinking about the customer experience, and how you can innovate to make that better, you’re already dead in the water.

Digital Has to Be at the Center

Digital transformation shouldn’t be treated as a project or as a bolt-on, but should be at the center of a business. Many companies see it as an extension to or substitute for existing activities. But instead, it should be treated as a way to transform existing business models — the only real choice for companies that want to avoid being disintermediated. 

Disintermediated is a big word for a very simple process: someone else comes in between you and your customer and steals him away. Odds are, you didn’t even think of that someone else as a competitor. That’s what happened to Garmin, who was too busy watching TomTom and Magellan to consider that Apple and Google could take their stake in the navigation market. 

Disintermediation is a dangerous grey area, because in an age of disruption, innovative companies need to take risks and that sometimes involves jumping into bed with partners who would be just as ready to steal the sheets, given half a chance. The ideal solution is to go it alone, but when you’re trying to leverage your skills in a new industry, that’s not always an option. 

Digital Has to Be Strategic and Disruptive

One of the problems is that many companies don’t realize that digital transformation involves a complete overhaul of their strategies. If a company really wants to undergo digital transformation, that implies a closer-than-close relationship between Marketing and IT. And the task should ideally be managed by someone with a thorough knowledge of both. Steve Jobs, anyone?

Companies that worry about disruption from outside are not really getting the point. While there’s some value to playing a defensive game, the best you can hope for is to draw equal. Real digital winners are looking at digital transformation as a way to completely change the structure of their companies, not just to counter threats, but to find opportunities. That’s why Domino's is doing so well right now. In 2008, share prices were only worth $2.83. Now, they’re worth $72, all because of a complete digital shift that has seen the pizza brand reinvent itself. Now, the biggest department at Domino's HQ is IT. 

Post offices around the world are also realizing the value of reshaping their business models, as traditional mail business plummets. Singapore Post doesn’t just deliver lingerie for Triumph International. It recently built Triumph's website and developed its marketing strategy, just part of Singapore Post's growing e-commerce strategy that taps into its experience in logistics. 

Learning Opportunities

Taxi drivers worldwide have been complaining about Uber. And now some are beginning to realize, a bit belatedly, that the only way to beat it is by playing its own game. Hence G7 Taxis in Paris are following its lead. Similarly, the hotel industry has complained about unfair competition from Airbnb, but they might do better to take a few lessons from its book, by upping their game and personalizing visitor experiences. Marriott is one example of a hotel that has stepped up to the mark.

5 Quick Tips for Digital Transformation

1. Don’t treat digital transformation as an add-on. It’s got to encompass the whole company. Digital transformation requires enterprise transformation. That means that building a new digital presence is not just a job for the IT department, but for anyone who’s involved in your company’s strategy. It’s an opportunity to reinvent your company and find new strengths.

2. Protect your territory and never think you’re too big. Newcomers can quickly disrupt the market. Don’t let them steal what you’re good at. Blockbuster had the name but still lost the race. At its peak, it was undoubtedly the king of the industry, with $6 billion sales in 2004. However, Blockbuster quickly lost out to Netflix because it failed to see the importance of digital sales. Christie’s Auction House however, did manage to, and became a surprising digital success story by launching Christie’s LIVE. Nowadays, almost one third of the bids in its major auctions are received online.

3. Unlock the power of big data. By cross-referencing your internal information (for example, pricing histories and customer traffic patterns) with outside data sources, you can get a better understanding of your customers and give them more relevant offers. Remember to track the data and to use it. This is the key to improving customer experience.That’s how Domino’s discovered that online orders were more profitable, a discovery that created a complete shift in priorities.

4. Create a personalized experience for your customers. Harness the power of the Internet of Things to offer customers personalized experiences in-store and online. Beacons are a powerful digital tool because of the big data insights they give that can enable you to transform customer experiences.

5. Remember that digital transformation is a journey. It’s not something that can be accomplished and ticked off. It’s an ongoing process that needs a roadmap, a strategy and gatekeepers. If you don’t have the people already, hire them, because digital transformation is not going away. 

Digital transformation is not just about creating a brand new website, getting active on social media or about developing a mobile site (although it can, and should, include all three). It’s about using digital technology to optimize internal processes while also meeting the needs of customers. It’s about being ready to reinvent yourself. 

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