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What are the examples of successful digital transformations for B2B companies?
Hi there, and thanks for asking Wonder! I understand you'd like an analysis of key elements of 'digital readiness' in the B2B context, and examples of successful B2B digital transformation specific to high-value B2B products and services. In short, GE, IBM and CISCO have all demonstrated collaborative, centralized and data driven innovation practices that have shown positive impact on sales performance and revenue. GE and ING bank have implemented key success practices for digital transformation including commitment to digital at strategic levels, and creating consistent omnichannel customer experiences backed by end-to-end connection of processes. Below you'll find my methodology and relevant findings.
METHODOLOGY
I began my research by searching for pre-compiled analyses of successful B2B digital transformation and digital readiness. This generated several recent market research industry articles which outline both successful examples and key elements of B2B digital transformation. I have relied on these articles as the foundation for this report, as they are based on quantitative measurements of 'success.' Not all of the key elements were paired with identifiable examples by name, so my report highlights those which are clearly identified. For ease of reading, these examples are incorporated with the key element at which they have excelled.
The examples and case studies used are:
- GE, which produces a plethora of industrial, high-value B2B products for the aerospace, healthcare and transportation industries, among others;
- ING bank, which received EuroMoney accolades for the performance enabled by its omnichannel digital transformation specific to B2B consumers;
- CISCO technology conglomerate;
- IBM.
KEY ELEMENTS OVERVIEW
In 2016, McKinsey published a three-year research study which "measured the Digital Quotient® (DQ™) of approximately 200 B2C and B2B companies around the world by evaluating 18 management practices related to digital strategy, capabilities, culture, and organization that correlate most strongly with growth and profitability." These This research found six digital practices that significantly contributed to higher performance in B2B:
1. Strategic-level digital commitment;
2. Creating a consistent customer experience across all channels;
3. Using data-driven sales practices;
4. Creating an "end to end connection of processes" to facilitate better insight and improve decision-making;
1. STRATEGIC LEVEL DIGITAL COMMITMENT
This level of commitment is demonstrated by sufficient financial investment in digital integration and innovation, and a coherent digital strategy that encompasses all levels of the company. GE invested more than $1B to create an industrial technology platform - the Predix Industrial Internet - that now "generates $5B in revenue" and is projected to triple in revenue in the next three years. It also incorporated a Chief Digital Officer position to oversee each business unit, and hired 'thousands' of new engineers, data scientists and digital experts.
2. CONSISTENT EXPERIENCE ACROSS ALL CHANNELS
Creating a consistent customer experience across all channels creates a seamless experience for the customer. Functionally, this means that customer-centric information must be automatically updated in real time, and all client-facing interfaces and people must have access to all relevant customer information in real time. ING bank demonstrated this successfully by updating its corporate customer omnichannel experience. After its process overhaul, "customer-service personnel, marketers, and account managers can [now] track where a customer is in his or her decision-making journey and respond with tailored offers and advice."
3. DATA-DRIVEN SALES PRACTICES
At its foundation, using advanced data analytics allows B2B companies to target its customers' specific needs, and to target marketing campaigns to specific demographic segments using highly relevant information to that segment (or company). This requires IT/OT integration at a high level. Vestas wind-turbine manufacturer used data from its consumer research to create a highly-targeted campaign specific to "Fortune 500 C-level executives—the lead decision makers for their product." This campaign provided company-specific data points which demonstrated the benefit of the product specific to each individual company; and it accelerated Vestas's conversion rate by 10x.
4. END-TO-END PROCESS CONNECTION
End-to-end process connection is related to the seamless omnichannel customer experience noted above. In essence, it is the combination of front-end and back-end automation and integration that allows a "360-degree view of the customer across the business" using all available data. This means that anyone in sales, operations or support can view all available information relative to sales, order history, financial history, client service and support interactions - both the front end and the back end are transparently connected.
5. INNOVATION AND EXECUTION-BASED CULTURE
"Agile development practices and rapid experimentation" are key factors in digital transformation success. Digital leaders make use of collaborative innovation (see 'Sales Specific B2B Digital Transformation' below) and minimally viable product (MVP) design to shorten their development and implementation cycles. This creates an innovation culture, but also provides proof that the company can "deliver on ambitious and high-profile customer initiatives."
6. REALIGNING ORGANIZATIONAL STRUCTURE AND METRICS
Most of the key elements previously mentioned are related to reorganizing the way that processes and practices are organized and implemented. When these changes are implemented all together, they radically realign how the company operates. GE has demonstrated this by integrating its IT and OT, which in turn supported the expansion into a purely digital arm of the business, GE Digital. This realignment principle also extends to the metrics used in data analysis; i.e., simplifying and reorganizing to focus on metrics that actively support the desired outcome.
SALES-SPECIFIC B2B DIGITAL TRANSFORMATION
Recent Forrester research highlighted three case studies of B2B digital leaders, and focused on the three key elements of digital success demonstrated by these companies. These three elements are not unique relative to those listed above; each one is a combination of the six outlined in the McKinsey study. However, each one also cites an example specific to sales:
1. COLLABORATIVE INNOVATION
Collaborative innovation, in this context, refers to the combined practices of innovation-based culture (#5 above), end-to-end process connection (#4), and seamless omnichannel experience (#2). Cisco implemented this element specific to sales by connecting sales and marketing data and processes, and creating new tools that were managed "from incubation to scale." These tools allowed for better interactions and greater efficiency in the sales department.
2. CENTRALIZED INNOVATION
GE is noted in this article for its end-to-end connection of processes and its centralized scaling of technology. This allowed for a 50% decrease in the time it took for sales to respond to customers. Essentially, the 'centralized' component of innovation encompasses all the aspects above that allow for front-to-back connection of processes, transparency between departments, and the integration of IT and OT. Specific to GE sales, the installation of a voice text app allowed the sales team to "reduce [the] time that sales teams spend addressing forecast questions."
3. "DATA-DRIVEN SALES INNOVATION"
At IBM, data scientists were incorporated into the sales team, which significantly increased sales revenue. This is a interesting combination of 'data driven sales practices' and 'realigning the organizational structure.'
CONCLUSION
To wrap it up: key elements of digital readiness in the B2B space include data driven sales practices, end-to-end process connection, and creating an innovation-based culture backed by organizational realignment. Thanks so much for using Wonder! Please let us know if there is anything else we can research for you.