companies digital transformation case study

30+ Digital Transformation Case Studies & Success Stories [2024]

Cem is the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per Similarweb) including 60% of Fortune 500 every month.

Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.

Digital transformation has been on the executive agenda for the past decade and ~ 90% of companies have already initiated their first digital strategy. However, given the increasing pace of technological innovation, there are numerous areas to focus on. A lack of focus leads to failed initiatives. Digital transformation leaders need to focus their efforts but they are not clear about in which areas to focus their digital transformation initiatives.

We see that digital transformation projects focusing on customer service and operations tend to be more heavily featured in case studies and we recommend enterprises to initially focus on digitally transforming these areas.

Research findings:

• Outsourcing is an important strategy for many companies’ digital transformation initiatives.
• Most successful digital transformation projects focus on customer service and operations

Michelin-EFFIFUEL

Michelin, a global tire manufacturer, launched its EFFIFUEL initiative in 2013 to reduce the fuel consumption of trucks. In this context, vehicles were equipped with telematics systems that collect and process data on the trucks, tires, drivers habits and fuel consumption conditions. By analyzing this data, fleet managers and executives at the trucking companies were able to make adjustments to reduce oil consumption.

• Business challenge : Inability to improve customer retention rates to target levels, due to trucks’ fuel consumption and CO2 emissions .
• Target customers : Fleet managers and operations managers at truck companies in Europe
• Line of business function : Customer success management and sales.
• Solution : By using smart devices, truck and tire performance degradation is detected and maintained from the start. The solution also nudges truck drivers into more cost and environmentally friendly driving.
• Business result : Enhanced customer retention and satisfaction. EFFIFUEL has brought fuel savings of 2.5 liters per 100 kilometers per truck. The company also reduced the environmental costs of transportation activities. According to Michellin, if all European trucking companies had been using the EFFIFUEL initiative, it would have caused a 9 tons of CO2 emission reduction.

Schneider Electric-Box

Schneider Electric is a global company with employees all over the world. Prior to the Box initiative , which is a cloud-based solution, business processes were relatively slow because it is difficult to process the same documents from different locations at the same time. Schneider Electric also needed a way to provide data management and security for its globally dispersed workforce. So Schneider Electric outsourced its own custom cloud environment that integrates with Microsoft Office applications to Box. The platform also ensures tight control of corporate data with granular permissions, content controls and the use of shared links.  Thanks to this initiative, the company has moved from 80% of its content hosted on-premises to 90% in the cloud and has a more flexible workforce.

• Business challenge : Inability to increase operational efficiency of the global workforce without capitulating to data security.
• Solution : Outsourcing company’s cloud-based platform to Box, that ensures data security and integration with Microsoft Office programs to ensure ease of doing business.
• Business result : Schneider Electric connects its 142.000 workers within one platform which hosts 90% of its documents.

Thomas Pink-Fits.me

British shirt maker Thomas Pink, part of the Louis Vuitton Moet Hennessey group, has outsourced the development of its online sales platform to Fits.me Virtual Fitting Room . The aim of the initiative was to gain a competitive advantage over its competitors in e-commerce. Thanks to the online platform developed, customers can determine how well the shirt they are buying fits them by entering their body size.

The platform also helps Fits.me gain better customer insight as previously unknown customer data, including body measurements and fit preferences, becomes available. In this way, the platform can offer customers the clothes that fit them better.

• Business challenge : Lack of visibility into  online sales and customers’ preferences.
• Target customers : Online buyers and users.
• Line of business function : Sales and customer success management.
• Solution : Outsourcing the development of the online platform to Fits.me Virtual Fitting Room .
• Business result : Improved customer satisfaction and engagement. Thomas Pink reports that customers who enter the virtual fitting room are more likely to purchase a product than those who do not. There are many successful digital transformation projects from different industries, but we won’t go into every case study. Therefore, we provide you with a sortable list of 31 successful case studies. We categorized them as:
• System Improvement : changing the way existing businesses work by introducing new technologies.
• Innovation : creating new business practices, based on the latest technology.

If you are ready to start you digital transformation journey,  you can check our data-driven and comprehensive list of digital transformation consultant companies .

To find out more about digital transformation, you can also read our digital transformation best practices , digital transformation roadmap and digital transformation culture articles.

You can also check our sustainability case studies article which include ESG related success stories.

For any further assistance please contact us:

This article was drafted by former AIMultiple industry analyst Görkem Gençer.

Throughout his career, Cem 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. He also published a McKinsey report on digitalization.

He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.

Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

AIMultiple.com Traffic Analytics, Ranking & Audience , Similarweb. Why Microsoft, IBM, and Google Are Ramping up Efforts on AI Ethics , Business Insider. Microsoft invests $1 billion in OpenAI to pursue artificial intelligence that’s smarter than we are , Washington Post. Data management barriers to AI success , Deloitte. Empowering AI Leadership: AI C-Suite Toolkit , World Economic Forum. Science, Research and Innovation Performance of the EU , European Commission. Public-sector digitization: The trillion-dollar challenge , McKinsey & Company. Hypatos gets $11.8M for a deep learning approach to document processing , TechCrunch. We got an exclusive look at the pitch deck AI startup Hypatos used to raise $11 million , Business Insider.

To stay up-to-date on B2B tech & accelerate your enterprise:

Next to Read

Healthcare apis in 2024: top 7 use cases & case studies, 5 digital transformation challenges & recommendations in 2024, digital transformation in banking: top trends & best practices.

Your email address will not be published. All fields are required.

Related research

Top 5 Digital Transformation Current & Future Trends in 2024

In-depth Guide to Digital Transformation for Telecoms in 2024

• Perspectives
• Best Practices
• Inside Amplitude
• Customer Stories
• Contributors

Digital Transformation Examples: 3 Company Case Studies

Learn how three legendary companies—Walmart, Ford, and Anheuser-Busch InBev—improved customer experience by focusing digital transformation around data.

Digital transformation is a process by which a company invests in building out new digital products and services in the effort to rethink the business around digital. An effective digital transformation improves customer experience and enhances the way a company operates behind the scenes.

To digitally transform, your business needs to deploy new products and technologies. With these new products come new ways to connect with your customers and more data to inform roadmaps and strategies.

Once the investment in digital begins, your business can use new products and data to identify growth opportunities. The three case studies below—from Ford, Walmart, and Anheuser-Busch InBev—show how legendary companies went beyond simply creating an app and truly re-thought how digital efforts supported sustainable growth for the business.

• Digital transformation brings about new products and services that improve the customer experience.
• Digital transformation can also be an investment into new systems, goals, and methodologies that make internal processes more efficient.
• Digital transformation gives you more informative behavioral data and more touchpoints with the customer.
• You can leverage the new data gained from digital transformation efforts to further improve the customer experience and drive sustainable growth.
• AB InBev, Walmart, and Ford used investments in digital technology to accelerate internal processes and deploy new digital products that, consequently, provided valuable data on the customer experience and influenced future business investments.

3 examples of digital transformation through data

Here are three examples of legendary companies that embarked on digital transformation with a focus on data. These companies carefully considered how new technology could bring about data that both made internal processes more efficient and produced insights about how to grow customer value.

Brewing company AB InBev underwent a digital transformation by compiling their network of independent breweries into a unified powerhouse . One of their priorities was getting their data in the cloud, and by doing so, employees can now pull data that’s gathered globally and use it to make data-backed decisions.

For example, more accurate demand forecasting means AB InBev teams can match supply with demand—essential for such a large company with a complex supply chain. Access to data from all the breweries means they’re able to experiment faster and roll out changes that improve business processes.

Gathering more data and opening up that data to internal teams was just the first step of the process, though. AB InBev capitalized on their digital investments by launching an ecommerce marketplace called BEES for their SMB customers—the “mom and pop shops”—to order products from. With the BEES platform, AB InBev found that their small and medium-sized businesses browsed the store on the mobile app and added items to their cart throughout the day—however, they only made the final purchases later in the evening.

Based on this behavioral data, the BEES team started to send push notifications after 6:00 p.m., recommending relevant products, which led to increased sales and greater customer satisfaction. By the end of June 2021, BEES had gained over 1.8 million monthly active users and had captured more than $7.5B in Gross Merchandise Volume .

Jason Lambert, the SVP of product at BEES, credits their success with the hard data that told them how their customers behaved and what they needed: “it turned out to be a thousand times better than any of our previous strategies or assumptions.” BEES used behavioral analytics to respond quickly, changing the buying experience to match the needs and habits of their retailers.

As a traditional brick-and-mortar retailer, Walmart began digital transformation when they opened an online marketplace. However, digital transformation is an ongoing process—it doesn’t end at the first website. A digital transformation means companies refocus their operations around digital technology—and this usually happens both internally and in a customer-facing way.

To drive more customer value through digital touchpoints, Walmart set up mobile apps and a website to allow customers to purchase goods online. After analyzing customer behavioral information from their app, they added more services such as same-day pickup, mobile ordering, and “buy now, pay later.”

To be successful with digital transformation, Walmart prioritized data access for everyone on their teams. Breaking down internal silos allowed employees to take ownership; They acted fast and made concrete changes to improve the customer experience.

Walmart’s head of mobile marketing, Sherry Thomas-Zon, notes how critical data—and access to data—are to digital operations. “Our marketing and product teams are always looking at numbers,” Thomas-Zon said. “You can’t work quickly without a self-service data and analytics tool for marketing, especially in an organization as large as Walmart. It keeps our teams agile, despite our size and the increasing amount of data we collect and analyze.”

Ford has embraced several digital transformation initiatives—including using technology to transform and improve the manufacturing process at one of its biggest factories. Not having the correct parts available holds up workers and slows down the production process. Ford introduced a material flow wireless parts system so they could track the quantities of different parts and make sure there were enough available.

In 2016, Ford also introduced a digital product for their customers—the FordPass app . It allows Ford owners to remotely control their vehicles. For example, drivers can check their battery or fuel levels and lock or unlock their car from their phone.

To capitalize on these new digital touchpoints with the customer, Ford leveraged data to improve the experience of the FordPass app. First, the product team grouped customers based on the in-app behaviors they demonstrated. Then, based on each group’s activity, Ford personalized the app experience to provide more value. Jian Wei Hoh, head of business design at Ford, said, “ Designing around cohorts is a game-changer .”

Ford’s success is grounded in the same process as Walmart and AB InBev. They used their digital transformation to gather detailed information about how their consumers interact with their products. Then, they made data-led decisions to provide more value to their customers.

Overcoming common digital transformation challenges

It’s not called a transformation for no reason. You’re changing the way your business operates, which is no easy feat. Here are the common challenges you’ll face and how to overcome them.

Teams undergoing a digital transformation have to:

• Unlearn habits
• Get used to new structures and ways of collaborating
• Deal with changing roles
• Develop new skills

All of this takes time and, as you integrate new systems with the old, there’s a risk that teams will get siloed and chaos will ensue.

A key way of overcoming these challenges is planning. Create a digital transformation strategy roadmap in advance. Outline your integration strategy and detail how this will affect each team. Once you’ve created your plan, share it with the entire company, so everyone can use it as a single reference point. Use a project management tool that allows team members to get a big-picture overview and see granular details like the tasks they’re responsible for.

It takes time for teams to onboard and move away from what was successful under the previous system, for example, shifting from heavyweight to lightweight project planning. Make sure you factor some breathing space into your roadmap—give everyone a chance to get used to the new way of operating.

As part of a digital transformation, you’ll want your team to develop new skills as well. Upskill your team by incorporating digital skills into your employee development plans . Provide people with opportunities to learn and then track their progress.

More challenges arise if you believe there’s an end-state to digital transformation. New technology and new consumer behaviors are always emerging, which means digital transformation is an ongoing process. It’s not something you’ll complete in a week. Rather, it’s a continuous state of experimentation and improvement. At Amplitude, we refer to this process as digital optimization . If digital transformation brings new products, services, and business models to the fold, then digital optimization is about improving these outputs. Both digital transformation and digital optimization are important—digital transformation signals the start of new investments, and digital optimization compounds them.

Tips for building a digital transformation strategy

A digital transformation won’t magically grant you more profit. Examine how each part of the transformation will affect your customers and your employees. Then, you can be intentional and introduce initiatives that positively impact your business.

Diagnose what you want from a digital transformation first

There are different ways of going about a digital transformation. Some companies prefer to implement an all-inclusive digital strategy, and they transform all parts of their organization at the same time. Others opt for a less-risky incremental strategy. Every company is different. To choose the best approach, examine your whole organization and analyze where digital systems could help.

Consider your business goals. Investigate how a digital transformation could impact the customer experience. What new products could you provide? How could you improve your services? For example, you might use artificial intelligence to create a chatbot that reduces customer service wait times—or purchase software that does the same.

You’ll also want to consider your business processes. How could a digital transformation speed you up? Improve your operations? Allow more collaboration between teams? Asking these questions allows you to challenge the way you operate and will help you identify problems in your organization that you might not have noticed before. For example, perhaps your deliveries are often delayed, and you could make delivery smoother by digitizing elements of your supply chain .

Get cross-team involvement

Though different teams may work separately, your customers are affected by each department. Collaboration elevates everyone’s work because it means people can make informed decisions.

Make sure you get input from all of the right stakeholders when you create your digital transformation strategy. Ask:

• What processes hold you up?
• Where are the bottlenecks?
• What data would be useful for you?

Allow everyone to access the data they need without input from anyone else. Help your employees improve their data literacy . Start by providing training so everyone can use the data tools and software in your organization—consider setting up a capability academy for data skills . To help everyone in your organization access and analyze data, adopt easy-to-use self-service tools. Then, lead by example. Provide inspiration by using data storytelling in your presentations to explain the decisions you make.

Encourage collaboration between teams by creating shared resources, so they have spaces to present insights and submit suggestions. This could be as simple as creating a Google Doc for brainstorming that multiple teams can access, or sharing charts directly within your analytics solution like with Amplitude Notebooks . Then, you can start to experiment and make improvements to the digital customer experience like Walmart, Ford, and AB InBev did.

Once your digital transformation is moving, a digital optimization strategy is an opportunity to generate growth. Your digital transformation initiatives will continue in parallel, and the process will become a feedback loop:

• Deploy new digital systems and products
• Analyze the data that comes forth from these investments. Use it to draw insights about your customers or processes.
• Make decisions based on the data and make changes.
• Repeat. (Or, optimize .)

Always focus on your customers

Keep customer needs at the heart of what you do. Let them be your guiding light as you go through your digital transformation—as you gather more data about how your customers interact with your new digital products, use it to make the experience even better for them. It’ll lead to more trust and loyalty and, ultimately, result in more recurring revenue.

To continue your learning about digital transformation and optimization, join an Amplitude workshop or webinar or read our Guide to Digital Optimization .

• MIT Sloan. How to build data literacy in your company
• McKinsey & Company. Digital transformation: Raising supply-chain performance to new levels
• Harvard Business Review. Boost Your Team’s Data Literacy
• Datanami. From Big Beer to Big Data: Inside AB InBev’s Digital Transformation
• Predictable Profits. How Ford Embraced Digital Transformation
• APMG International. Heavyweight v Lightweight Management
• Whatfix. Upskilling Your Workforce in 2022

About the Author

More best practices.

• For Small Business

30+ Digital Transformation Case Studies & Success Stories [2023]

• March 17, 2024
• by Terry Tolentino

Digital transformation has been on the executive agenda for the past decade and ~90% of companies have already initiated their first digital strategy. However, given the increasing pace of technological innovation, there are numerous areas to focus on. A lack of focus leads to failed initiatives. Digital transformation leaders need to focus their efforts but they are not clear about which areas to prioritize for their digital transformation initiatives.

As a web scraping and data extraction expert with over 10 years of experience, I have seen firsthand how critical it is for companies to carefully evaluate and select focus areas when undergoing digital transformation. Based on my analysis of hundreds of case studies and client engagements, I recommend enterprises initially focus their efforts on digitally transforming customer service and operations functions.

Key research findings:

Outsourcing is an important strategy for many companies‘ digital transformation initiatives. Research shows that more than half of companies outsource some digital capabilities and many rely on external partners to provide expertise.

Most successful digital transformation projects focus on customer service and operations. According to Forbes , 86% of buyers will pay more for a better customer experience. Enhancing these functions through digital transformation can directly impact customer retention and revenues.

JioMart is one of the largest Indian e-commerce companies that focuses on online grocery shopping, fashion, and home essentials. In May 2020, JioMart was completely launched in 200 Indian cities. They offer over 50,000 products and process more than 250,000 orders per day.

Business challenge: Inability to accommodate the high demand for their services and volume of orders. The company was experiencing 3x more traffic than anticipated. According to JioMart, order volumes spiked from 10,000 per day to over 250,000 per day within weeks of launching. Their systems were not built to handle that scale.

Target customers: Mass population. JioMart targets India‘s price-sensitive consumer base of 1.3 billion citizens, especially those in tier 2 and 3 cities.

Line of business function: Customer success management and sales.

Solution: JioMart collaborated with Haptik to develop a WhatsApp chatbot to scale its customer service efforts. The chatbot provides 24/7 automated customer support and handles over 70% of JioMart‘s customer queries.

Business result: 68% repeat purchase rate through the WhatsApp channel , 15% conversion rate and 1500 average daily orders. The chatbot was able to resolve customer issues quickly at scale, driving higher satisfaction.

Source: Haptik

Michelin-EFFIFUEL

Michelin, a global tire manufacturer, launched its EFFIFUEL initiative in 2013 to reduce the fuel consumption of trucks. In this context, vehicles were equipped with telematics systems that collect and process data on the trucks, tires, drivers habits and fuel consumption conditions. By analyzing this data, fleet managers and executives at the trucking companies were able to make adjustments to reduce oil consumption.

Business challenge: Inability to improve customer retention rates to target levels, due to trucks’ fuel consumption and CO2 emissions . Michelin found fuel costs account for over 30% of operating costs in the trucking industry. This impacts profitability and customer retention.

Target customers: Fleet managers and operations managers at truck companies in Europe

Solution: By using smart devices, truck and tire performance degradation is detected and maintained from the start. The solution also nudges truck drivers into more cost and environmentally friendly driving. Real-time data enables proactive maintenance.

Business result: Enhanced customer retention and satisfaction. EFFIFUEL has brought fuel savings of 2.5 liters per 100 kilometers per truck. The company also reduced the environmental costs of transportation activities. According to Michellin, if all European trucking companies had been using the EFFIFUEL initiative, it would have caused a 9 million ton reduction in CO2 emissions.

Schneider Electric-Box

Schneider Electric is a global company with over 140,000 employees across 100+ countries. Prior to implementing the Box content cloud , collaboration and document sharing processes were inefficient and fragmented. With a dispersed workforce, it was difficult to collaborate on documents in real-time from different locations and devices.

Schneider Electric also needed to balance flexible access with strong data security protocols for its sensitive corporate information. These challenges led them to outsource and customize an enterprise cloud solution from Box.

Business challenge: Inability to increase operational efficiency of the global workforce without capitulating to data security.

Solution: Schneider Electric outsourced its cloud needs to Box, customizing a secure content platform integrated with Microsoft Office 365. Box provided:

• Real-time document collaboration across locations and devices
• Granular permissions and content controls
• Integration with Microsoft Office apps
• Enterprise-grade security and compliance

Business result:

• Reduced IT infrastructure costs by 30% by eliminating legacy on-premises servers
• Accelerated time-to-market cycles company-wide
• Seamlessly connected 142,000 employees worldwide on one platform
• Safely migrated over 90% of content to the cloud

The Box implementation enabled Schneider Electric to digitally transform content collaboration and management globally, with substantial gains in agility, productivity and security.

Thomas Pink-Fits.me

British shirt maker Thomas Pink, part of the Louis Vuitton Moet Hennessey group, has outsourced the development of its online sales platform to Fits.me Virtual Fitting Room . The aim of the initiative was to gain a competitive advantage over its competitors in e-commerce. Thanks to the online platform developed, customers can determine how well the shirt they are buying fits them by entering their body size.

The platform also helps Fits.me gain better customer insight as previously unknown customer data, including body measurements and fit preferences, becomes available. In this way, the platform can offer customers the clothes that fit them better.

Business challenge: Lack of visibility into online sales and customers’ preferences. Thomas Pink had limited customer data from online sales. Most purchases occurred in physical stores.

Target customers: Online buyers and users. With this initiative, Thomas Pink specifically targeted digital-first consumers.

Line of business function: Sales and customer success management. The virtual fitting room enhanced the online shopping experience.

Solution: Outsourcing development of an online virtual fitting room to Fits.me.

• 29.6% higher conversion rate for customers using the fitting room
• Increased customer satisfaction and engagement
• Unlocked valuable customer body measurement data to inform production

There are many more successful digital transformation projects from different industries. To summarize, I have compiled a sortable table of 32 case studies categorized by industry, business function, and type of digital transformation:

This demonstrates the range of business functions and solutions companies leverage to digitally transform operations, services, products and business models.

While each company‘s needs are unique, customer-centric functions like customer service, sales, and marketing are common focus areas. Improving these through digital capabilities directly impacts customer acquisition, retention and satisfaction.

Similarly, digitizing operations functions like manufacturing, supply chain and internal systems improves efficiency, drives growth and enhances workforce productivity.

Based on my expertise in extracting and analyzing digital transformation data points, companies able to correctly prioritize and focus efforts yield the highest ROI. They balance long-term innovation with short-term improvements to existing systems.

Let me know if you would like me to expand on any specific case study or trend highlighted here. I can provide additional details, examples and data.

If you are ready to start your digital transformation journey, you can check our data-driven and comprehensive list of digital transformation consultant companies .

To find out more about digital transformation, you can also read our digital transformation best practices , digital transformation roadmap and digital transformation culture articles.

You can also check our sustainability case studies article which include ESG related success stories.

For any further assistance please contact us:

Transparency Statement: AIMultiple collaborates with many technology vendors including Haptik .

This article was drafted by former AIMultiple industry analyst Görkem Gençer.

• Deutschland
• Asia, Australia & New Zealand
• Europe, Middle East & Africa
• United States & Canada
• Latinoamérica

How a century-old brand is transforming the auto industry

Before the pandemic, automakers were already facing massive disruption, including driverless cars, electric vehicles, and shared mobility. But COVID-19 dealt another blow: Automotive was one of the hardest hit sectors in 2020, especially in the U.S., where auto sales sank by 15% .

In the midst of these unprecedented challenges, however, 118-year-old Ford Motor Company leaned in and began to reinvent itself.

As the virus accelerated, dealerships were forced to close their lots and shift to servicing and selling cars online , while larger supply chain concerns caused shortages in critical parts like microchips, which slowed vehicle production.

In the midst of these unprecedented challenges, however, 118-year-old Ford Motor Company leaned in and began to reinvent itself. Under the leadership of two new executives — Jim Farley as CEO and Suzy Deering as global CMO — the company saw an opportunity for business transformation and started mapping out a strategy.

Questioning everything, from its organizational structure to its customer experience, Ford made difficult decisions to put technology at the center of its business and get ahead of auto consumers’ evolving needs.

While still in the early stages of its journey, Ford has developed something of a blueprint for auto brands of the future. Recently, I spoke to Farley and Deering about the company’s transformation strategy. They shared three key changes they’re focused on.

1. Reimagining what auto brands do

Business transformation has been a buzzword for decades, but for years, it wasn’t an urgent reality for Ford. Then along came the pandemic, and its significance accelerated.

We have to invest in electric architectures and build software know-how in the company. And we need to integrate that know-how in ways we’ve never had to before.

“Events of 2020 made it clear that modernization is required to be a sustainable company,” explains Farley. A critical factor to modernizing has been disrupting its organizational model to aid the shift toward vehicle electrification and other digitally connected products. Since consumers expect more safety and convenience from automakers, the future of the auto industry will increasingly exist outside the doors of the vehicle.

According to Farley, this has required Ford to “unglue” its organization to allow for a new way of being. “The biggest transformation for us is to a software services–dominated company and brand,” he explains. “We have to invest in electric architectures and build software know-how in the company. And we need to integrate that know-how in ways we’ve never had to before.”

Such a fundamental pivot, Deering acknowledges, impacts company culture. “We have to make sure that we bring people along with us, and at the same time, give them the space to fail. There is strength in knowing that change is not going to be easy, but we’re going to do it together, and we’re going to look forward.”

2. Driving the connected car experience forward

By committing to look forward, the automaker is building on Henry Ford’s original vision — that every American consumer can own a vehicle — by reimagining what vehicle ownership looks like. Through software and other technology, Ford is working to ensure that it’s a fully connected, always-on experience.

When we have the ability to update our products dynamically with software, the customer relationship is no longer episodic. It’s every day.

“For so long, cars have really been isolated from the rest of people’s lives. We can change that by making them digital products,” Farley explains. To facilitate this shift, Ford has tapped into strategic partners like Google and is integrating software into its vehicles. Beginning in 2023, for example, millions of Ford and Lincoln models will be powered by the Android operating system, with Google apps and services built in.

Beyond offering drivers more assistance and convenience, connected vehicles also give Ford the ability to deepen its customer relationships. “When we have the ability to update our products dynamically with software, the customer relationship is no longer episodic. It’s every day,” says Farley.

3. Transforming the customer relationship model

To deliver on its vision of an always-on customer experience, Ford is also evolving how it approaches relationship-building. While many automakers stick to a traditional acquisition model to attract consumers through ads and rebates, Ford is bringing customer relationships to the forefront by shifting to a loyalty-based model.

“Another big transition for us as a company — and an industry — is to stop being obsessed with conquest and start putting all of our resources into taking care of the customers who already love the brand and own the product,” Farley explains. “This is a model that is available because of the always-on nature of digital. Our products and services are now integrated.”

We want to know our customers well enough to meet their needs while they’re in the vehicle, while they’re outside the vehicle, and before they even think about buying a vehicle.

Gearing marketing efforts to meet people’s ongoing needs in a more personalized way is critical to Ford’s loyalty-based push, because, as Deering points out, “The customer expects us to know them.”

For Deering and her team, this means relying more than ever on first-party data and signals to create an ecosystem that nurtures deeper relationships. “We want to know our customers well enough to meet their needs while they’re in the vehicle, while they’re outside the vehicle, and before they even think about buying a vehicle from us,” she explains.

While Deering and Farley both readily admit that Ford’s business transformation is a yearslong journey, they’re committed to playing the long game and continuing to drive brand love and loyalty through the 21st century.

Others are viewing

Marketers who view this are also viewing

How Carvana reimagined the automotive customer experience

How kia is boosting business by focusing on first-party data, the car-buying process: one consumer's 900+ digital interactions, how jaguar land rover generates high-quality leads in today’s omnichannel auto experience, as people resume planning for life’s big moments, brands have a role to play, it’s time to electrify auto marketing, thomais zaremba, others are viewing looking for something else, complete login.

To explore this content and receive communications from Google, please sign in with an existing Google account.

You're visiting our United States & Canada website.

Based on your location, we recommend you check out this version of the page instead:

Reimagining medicine through data-led transformation

Novartis uses a multi-cloud data analytics platform to optimize operations and accelerate innovation.

5-MINUTE READ

Call for change

For pharmaceutical companies, data is in many ways the lifeblood of the industry. With New Science developments—such as genomics, molecular profiling, biomarkers and patient monitoring devices—more data sets are being generated than ever before. Additionally, new supply chain security, patient services and marketing capabilities are creating a treasure trove of operational, patient and healthcare practitioner data. All these advances will produce new data streams exponentially larger than what companies are currently dealing with. As they do so, the data’s value will exponentially grow. The data-thirsty personalized medicine market alone was valued at $493.1 billion in 2021 and is expected to grow at a 6.2% compound annual growth rate from 2021 to 2028.1

Elizabeth Theophille, Chief Technology Transformation Officer at Novartis and Dr. Petra Jantzer, Senior Managing Director, Global Accenture Partner for Novartis talk about Novartis’ Digital Transformation journey and how their Gartner award-winning, multi-cloud platform supports the big data and analytics strategy employed to ultimately Reimagine Medicine.

Novartis, an industry pioneer, has embarked on an ambitious transformation to become the leading medicines company powered by data science and digital technologies. It knows data are only as good as the tools used to analyze and exploit them. How could it make data from all the nooks and crannies of the business work to revolutionize operations, drug development and commercialization? How could it be ready for the data-rich demands of personalization and advances in new therapies like cell and gene therapies?

Accomplishing these goals was difficult with the company’s legacy IT system, data fragmentation and information silos. Novartis required the flexibility and scalability of cloud technology to consolidate data and support dynamic, future-ready technology that help improves collaboration, insights and innovation. An end-to-end data and analytics solution would offer a broader and deeper view of activities to make business and clinical decisions. The insights it yields would help reimagine medical innovation to get patients life-changing therapies, fast and at a lower cost.

1 Grand View Research, “Personalized Medicine Market Size, Share & Trends Analysis Report By Product (Personalized Medical Care, Personalized Nutrition & Wellness, DTC Diagnostics, Telemedicine, Complementary Medicine), And Segment Forecasts, 2021 – 2028,” May 2021, Grand View Research website , accessed October 4, 2021.

When tech meets human ingenuity

From tech giants to startups and academia, Novartis collaborated with a variety of entities including Accenture on a project with the potential to transform all aspects of the business. We first helped map the stakeholder business value for this journey then created the data and analytics operating model, governance, road map, architecture, centralized data catalogue and platform for a holistic solution that harnesses new technologies like artificial intelligence (AI) and machine learning (ML).

Working with Amazon Web Services (AWS) as the primary cloud provider, Novartis also engaged Microsoft Azure to create a multi-cloud platform, complying with the best clinical and pharmaceutical manufacturing practices and offering capabilities across functions. The powerful analytics capabilities enable Novartis to crunch large (and growing) data sets. At launch, approximately 35% of global company data was on the new platform, with the remaining data planned for migration.

Teams can also develop use cases for new analytics-related projects to explore and scale across the business. This helps teams experiment with potential analytics use cases to solve business challenges and profit from opportunities. In some cases, we help deliver the use case programs.

The platform ingests, unifies and refines more than 9TB of internal and external data from over 80 sources in Development, Commercial, Manufacturing and Quality, and Corporate Business Services at a rate 20% faster than legacy systems. The different types of data are put into a standardized format, which can then be used by teams from across the company to simplify reporting.

Novartis’ advanced analytics platform ingests, unifies and refines:

terabytes is the amount of internal and external data the platform ingests, unifies and refines.

sources in Development, Commercial, Manufacturing and Quality, and Corporate Business Services.

faster than legacy systems.

A valuable difference

Novartis is reinventing its business to drive faster decision-making and bold innovation. Teams now have a smorgasbord of analytics tools, supported by AI and ML, to simplify reporting, augment existing programs with data insights, or create new products and services.

“Data democratization” makes insights accessible to relevant users, efficiently balancing ethical, security and regulatory requirements without creating data bottlenecks. Easily interpretable data enable Novartis’ global workforce, partners and researchers to maximize collaboration, ingenuity and productivity. Novartis’ people and research partners use the new platform to cross-pollinate ideas and develop a library of innovative analytics use cases and data models to be applied across the business.

Previously, it took about two weeks to set up a new use case; now it can be done within one day. The use case development time has also accelerated from 10 days to three days. More than 200 use cases are in the pipeline and 36 are under development. Eleven use cases have been rolled out, including DESIRE, a tool for monitoring clinical trial site risk and performance. The benefits go beyond R&D to encompass all aspects of the business. A patient services use case, for instance, is helping Novartis mine call center feedback to improve marketing reach and campaigns.

Novartis has sparked a digital revolution within its business to support data-driven decision making, predict future trends, optimize operations and spur growth. As data from new sciences and medical technologies grow, Novartis has powerful tools to accelerate drug launches—and improve patient outcomes.

Use cases for new analytics-related projects that Novartis can explore and scale to solve business challenges and exploit opportunities:

from across Novartis in pipeline

up and running

days to development

day to set up

This solution has drastically transformed our business.

Loic Giraud / CoE Lead Business Analytics – Novartis

The New Equation

Executive leadership hub - What’s important to the C-suite?

Tech Effect

Shared success benefits

Loading Results

No Match Found

A digitization project redefines processes for a big-box retailer

Consumer markets

A digital transformation, including<br>culture change and collaborative<br>automation builds

Alteryx<br>ProEdge

Creating a digital team behind the scenes

A big-box retail chain with thousands of locations throughout North America has been working on a sweeping digital transformation. For the company, it's been a multiyear effort to create a seamless digital customer experience. A top objective has been to empower the finance and accounting controllership team with automation and analytics tools and techniques, enabling them to move away from legacy, manual processes toward efficiency and a competitive edge. The goal: a digital overhaul focused on individual team members that allows them to design and access their own real-time, automated views of critical information so they’re able to play a more strategic role.

Prior to the retailer’s current digital transformation efforts, leaders had worked to transform enterprise applications, but the upgrades were not reaching every corner of the business to fully meet the needs of the high-growth company. They started over on a project-by-project basis, modernizing each area as they progressed.

The controllership was the next big opportunity. Management historically relied on time-intensive, manual spreadsheets but was aware of the opportunities automation techniques could provide.

The dream outcome: each associate on the controllership team would be empowered to independently imagine and execute new ways to get efficient with data—a concept PwC calls “citizen-led automation.”

Modernizing internally with automation

The retailer launched a pilot to build 20 automation workflows for the financial controllership team. For inspiration and training, PwC applied its BXT way of working, combining business strategy (B), experience design (X) and immersive technology (T), and 175 controllership staff members attended PwC-led courses for hands-on experience.

Eliminating manual tasks to create a more tech-enabled future

The company needed proof that citizen-led automation would work—and fast. Leaders were eager to reduce the time teams spent on manual tasks so they could contribute to the company’s future in new ways. A sprint included exploring potential methodologies and possibilities, which created the energy and engagement necessary to move quickly from planning to action. Functional leaders identified their most painful manual processes and then mapped workflows, creating the basis for successful rebuilds. PwC helped perfect what was needed to manage everything from lease accounting to ERP daily payment reconciliations. The teams created momentum. In just six weeks, they built automations for 20 processes. Robust testing and refinement led to wide adoption of the new workflows.

Simplified processes lead to new possibilities

The retailer’s controllership team huddled with PwC to design and test new processes, deep-think solutions and compare notes.

Employees began to understand how new workflows could simplify their jobs and were active in refining the workflows to create a better digital experience and improve efficiency.

PwC-led programs armed the controllership with new skills and opened their minds to new possibilities. Employee morale, engagement and productivity grew, and teams were thrilled to present their workflows and celebrate their successes and contributions.

Employees jumped at the opportunity to use Innovation hub, a PwC product which serves as an ideation platform teams can use to log and track ideas while providing analytics to the finance team. In just three weeks, employees logged over 250 digitization ideas.

Citizen-led automation: Intuitive software for the controllership and tax teams

The retailer leveraged the know-how and assets offered up by PwC’s technology automation delivery team to ramp up its tech transformation.

The effort focused on gaining experience and delivering results, leveraging Alteryx, a platform that allows end-users to automate data intensive work, obtaining automated insights and analytics for faster business outcomes, supporting the business case for modern methods.

Alteryx was complemented by ProEdge—a PwC product that enables digital upskilling efforts across organizations—to give employees opportunities to learn how to build their own automations.

The company also became an early adopter of PwC’s self-service marketplace of curated digital assets, including pre-built automations for its controllership and tax teams. This has helped the company with its digital transformation and inventory.

Setting the stage for a new digitization mindset

In a matter of weeks, the retailer was able to introduce capabilities that could remove thousands of hours of manual processes per year. Additionally, the company enabled faster decision-making with more robust and current data. More importantly, it set the precedent for the controllership team to begin a full “citizen automation” mindset shift.

As an example, reconciliations of payments in the core ERP platform were done daily in a manual, spreadsheet-managed process. Leveraging Alteryx and the cloud data platform, this process was automated from taking approximately 1,000 hours on an annual basis to minutes via the Alteryx automation.

In a short trial of only six weeks, the company moved from planning to action, increasing employee productivity and morale for 100% of use cases identified by process champions. The team extended its efforts through an additional phase of work to achieve the following results in a matter of months:

hours saved annually—with over $8 million projected cost savings over three years

use cases were automated, shifting the focus of the finance team from data prep to analytics review; 250 more use cases identified for automation

of automations enable leaders to make faster decisions

“The big-box retailer’s digital transformation inspired citizen-led automation within their financial controllership team. This new way of working empowers associates to reimagine how they work, which results in faster decisions, complementing the enterprise-led IT initiatives already in process.”

 Andy Ruggles Partner, PwC

Learn how PwC and Alteryx helped simplify processes that lead to new possibilities

Explore pwc's case study library, share this case study.

A big box retailer used automation to eliminate manual tasks and create a more tech-enabled future. Hello, time savings.

{{filterContent.facetedTitle}}

{{item.publishDate}}

{{item.title}}

{{item.text}}

Andy Ruggles

Partner, PwC US

Kevin Pennington

PwC Principal, PwC US

Thank you for your interest in PwC

We have received your information. Should you need to refer back to this submission in the future, please use reference number "refID" .

Required fields are marked with an asterisk( * )

Please correct the errors and send your information again.

By submitting your email address, you acknowledge that you have read the Privacy Statement and that you consent to our processing data in accordance with the Privacy Statement (including international transfers). If you change your mind at any time about wishing to receive the information from us, you can send us an email message using the Contact Us page.

© 2017 - 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

• Data Privacy Framework
• Cookie info
• Terms and conditions
• Site provider
• Your Privacy Choices

How Netflix Moved Operations to the Cloud and Saw Revenue Boom: A Digital Transformation Case Study

Remember the time you had to request mail-order DVDs to catch the latest flicks while munching popcorn on your couch?

Me neither.

It’s strange to think that about a decade ago, streaming giant Netflix had a business model built around direct mail.

Request a movie, put a few in your queue for next time, and let the anticipation build as you wait for your first DVD to arrive on your doorstep.

Now, our instant gratification bells ring daily as we pour through episode after episode of new material. And, we can barely remember the (dark) time where we waited days for entertainment instead of having it literally at our fingertips.

The shift from mail-in orders to a cloud streaming service improved customer satisfaction and made Netflix billions.

The company’s move to the cloud came with a hike in customer loyalty and a brand that competitors still fight tooth and nail to beat in the market.

Netflix serves as the ultimate digital transformation case study.

They transformed their entire business model and charted unprecedented waters. Here’s how to use their model as inspiration for your contact center’s digital transformation.

How to move your operations to the cloud, Netflix style: A digital transformation case study.

21 years after they started renting DVDs, Netflix now sits at a valuation of almost $145 Billion .

They came to market as a disruptor of traditional video stores like Blockbuster and Family Video.

Netflix founders Reed Hastings and Marc Randolph wanted to bring customer-centricity to the video rental market. At the time, renting videos was inconvenient and costly, with customers often plagued by expensive late fees.

They created an entirely new way to watch movies and consume content. And as time went on and subscribers grew, they continued to shift to keep pace with new consumer demands.

In 2007 , they took their first step into the world of streaming video. They offered customers a streaming subscription in addition to the more traditional DVD rental service, giving customers the option to chart their own path.

Since then, they’ve seen exponential growth in subscribers and revenue. Let’s take a look at their trends over time. We’ll skip over the first few years of the company’s infancy and jump to the year the company went public.

Here’s how Netflix has grown since 2002.

That incredible growth trajectory, and willingness to change, made Netflix stock skyrocket by 6,230% in a 10-year period.

And, they did it all without crazy price hikes, keeping customers top-of-mind.

While Netflix has adjusted prices over the years, they strike a balance by adding more value and services for the dollar. In 2019 , the Basic plan increased by $1 a month (adding up to $12 annually). While the Standard and Premier plans rose by $2 per month, (adding up to $24 annually, for each plan).

Meanwhile, the company is putting some $15 billion towards creating new content binge-watchers will love.

After this price change, Netflix saw a slight blip in subscriber growth, with growth in Q2 coming in low. But, analysts don’t think for a second it’s the beginning of a downward trend. In fact, a similar event happened back in 2010 when Netflix moved to a pricing model that broke out streaming and video rentals. And they clearly rebounded.

When you put the numbers into perspective, you see this is the first dip in subscriber growth in nearly a decade. That’s pretty remarkable. And, revenue still increased for the quarter. It’s clear the value of the digital innovator’s services still outweighs the cost for most.

Plus, if you can post positive revenue numbers for over a decade and become a multi-billion-dollar company in about 20 years, you’re doing alright.

Here’s what Netflix did to reach these lofty heights. And, how you study the same tactics to lead your contact center through a successful digital transformation.

Stay true to your vision.

Netflix started out with the idea to make it easier and less expensive for people to watch movies.

But they didn’t want to stay in the DVD game forever. They had the foresight to predict that consumer behaviors would continue to shift. And, they wanted to stay ahead of the competition.

Only, they didn’t sacrifice their vision when it came time for company-wide changes. Instead, they realigned their business strategies to fit their vision, even as consumers and trends shifted.

What you can do:

As you make digital shifts in your contact center and your company, keep your vision constant. While tons of other factors may orbit around you, your vision keeps you grounded.

Use your company vision to guide your decision-making. And, use data and trends to predict how your customer behavior will shift.

As you shift to keep pace with your customers’ needs, align your operations to your customer behaviors to realize your vision.

Reinvent the wheel if the old one doesn’t solve customer problems.

Netflix soared from seed idea to a $145-billion-dollar valuation in only 21 years. (Wow, they did that in less time than it took big tech vendors to break CSAT scores.)

And they didn’t get there by spinning up a new-and-improved version of Blockbuster.

Ted Sarandos, Head of Content at Netflix said when he came on board at the early stages of the company founder Reed Hastings used his vision to scale and innovate at Netflix.

“We never spent one minute trying to save the DVD business,” said Sarandos .

The company leaders didn’t stick to traditional best practices because they no longer worked for modern customers.

Instead of piggybacking off what other companies did, Netflix solved problems differently. And, they solved them better. The proof is in a bankrupt Blockbuster and dwindling Family Video stores.

Want to know what you’re missing when you only look at digital transformation best practices? Pop over to our article on the topic.

Tailor your path and contact center strategies to your specific business needs. Focus on listening and understanding your customers, with the help of better data and customer surveys .

Find out what’s causing your customers’ pain. See what common questions your customers have. Work with your sales team to find out why customers are fleeing competitors. Discover why they choose your products and services in the first place. Then, work with your contact center and company leaders to develop the methods to solve these pains.

Don’t get caught up in what your competition is doing. What they’re doing might work, but your actionable data and customer information can guide you to a way that works better.

If you’re going to be consumed by one thought, let it be this one: how might we better serve our customers?

Don’t force your customers down a single path.

In the early phases of Netflix, internet speeds weren’t built for streaming movies. People who tried to download and view movies online were only frustrated by the lengthy, often interrupted experience of watching a film online.

Netflix didn’t want to enter the streaming market until the right infrastructure was available to support a platform with high-quality and high-speed content. They didn’t want to taint their brand from day one, linking the Netflix name to all the baggage that came with poor streaming experiences.

At the same time, they were watching postage prices. The price of postage kept rising, and internet speeds were on the ups. By watching how the market and internet infrastructure changed, they identified the right moment to launch their first streaming service.

They tested their streaming service with lower-quality video, first. They wanted to gauge interest and customer experience without canceling their bread-and-butter DVD service.

Those who wanted access to the crisp DVD picture could still order movies to their doorstep. Others who wanted instant access could forgo the high-quality picture for convenience, instead.

Your contact center and customer experience will change. It has to. But as you make changes and shift your operations to the digital era, keep options open for your customers.

Just because chat and email are on the rise as popular customer service channels doesn’t mean every customer wants to use them. Use past data and communication history to learn more about your customers. Then, coach your agents to handle each interaction based on the customer’s preferences.

Bringing changes to your contact center has the potential to transform your customer experience for the better. But, without careful intention, it can also cause friction. Introduce changes to your customers slowly, and make sure your agents are always there to offer extra help through the process.

Use data and trends to personalize your customer experiences.

This one’s huge. It’s how Netflix keeps customers engaged with their platform, and how they coined the term binge-watching

As Netflix made changes in their operations, they watched their data like a hawk. They looked for trends on how people watched content, what kept them watching, and how personalization fueled content absorption. Then, they used an algorithm to serve up content tailored to their customers’ specific interests.

“Like a helpful video-store clerk, it recommended titles viewers might like based on others they’d seen.” – Twenty Years Ago, Netflix.com Launched. The Movie Business Has Never Been the Same , by Ashley Rodriguez for Quartz .

And, as their new cloud-based business let them scale globally, their data points multiplied.

Previously, Netflix could only mail DVDs to U.S. customers. Shipping DVDs overseas wouldn’t have been financially sustainable while keeping prices fair for all customers. Moving to an online business model allowed Netflix to target and reach new audiences without taking on the costs of shipping globally.

Doing this not only scaled their business, but it diversified their data and made their algorithm smarter. Enter, extreme personalization and binge-watching fever on a global scale.

Track and analyze data from your customer interactions. Create custom reports and dashboards to distill important findings from your data. Then, use the trends and patterns you find to personalize your customer service experiences.

From the way you send customer surveys to the tone your agents use, your interactions tell you what your customers want. Lean into your analytics for valuable insight into how to help your customers.

And, use the data to transform your contact center too. Customer data is a powerful tool to drive business change. If your metrics show customers aren’t happy, your company leaders want to know about it. And, they’ll want to fix it. There’s no better case for company transformation.

Netflix took risks to transform their business. But, there’s no bigger risk than stagnation. Staying the same doesn’t help you reach your contact center goals. Innovating and trying out your big ideas is what separates the leaders from the laggards.

Can your tech vendor survive in your digital transformation?

Learn how to choose vendors who make your transformation strategy possible.

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

The Top 20 Business Transformations of the Last Decade

• Scott D. Anthony,
• Alasdair Trotter,
• Evan I. Schwartz

Netflix, Adobe, and Amazon top the list.

The strategic impulse to identify a higher-purpose mission that galvanizes the organization—is a common thread among the Transformation 20 , a new study by Innosight of the world’s most transformative companies. The T-20 study identified the global companies that have achieved the highest-impact business transformations over the past decade as measured by new growth, respositioning the core business, and financial performance. Each of these companies developed new-growth businesses outside its traditional core which have become a significant share of the overall business. However, it’s the decision to infuse a higher purpose into the culture, one that guides strategic decisions and gives clarity to everyday tasks, that has propelled these companies to success.

In 2012, Denmark’s biggest energy company, Danish Oil and Natural Gas, slid into financial crisis as the price of natural gas was plunging by 90% and S&P downgraded its credit rating to negative. The board hired a former executive at LEGO, Henrik Poulsen, as the new CEO. Whereas some leaders might have gone into crisis-management mode, laying off workers until prices recovered, Poulsen recognized the moment as an opportunity for fundamental change.

• Scott D. Anthony is a clinical professor at Dartmouth College’s Tuck School of Business, a senior partner at Innosight , and the lead author of Eat, Sleep, Innovate (2020) and Dual Transformation (2017). ScottDAnthony
• Alasdair Trotter is a partner at Innosight, the strategy and innovation practice of Huron Consulting Group.
• Evan I. Schwartz , a writer focused on innovation and leadership, is Innosight’ s former Director of Storytelling.

Partner Center

Digital transformation strategies of project-based firms: case study of a large-scale construction company in China

Asia Pacific Journal of Innovation and Entrepreneurship

ISSN : 2398-7812

Article publication date: 17 April 2023

Issue publication date: 19 September 2023

This study aims to explore how project-based firms, which generally organize most of their work around temporary projects in discontinuous and fragmented types of business contexts, proactively formulate and implement digital transformation strategies under institutional pressures in a predigital era.

Design/methodology/approach

An exploratory case study was conducted in a large-scale construction company in China using multiple data collection methods, including semistructured interviews, documentation collection and observation.

An integrated framework is developed to conceptualize three key dimensions of digital transformation strategies of project-based firms: strategic adaptation for organization-environment fit through balancing the internal efficiency needs with the external legitimacy pressures; proactive business transformation through comprehensively managing the roles of digital technologies in optimizing defined business processes and fostering new business models; and delicate organizational transformation to integrate temporary project-level operation processes with ongoing firm-level business processes.

Originality/value

This study represents an exploratory effort to empirically investigate how project-based firms strategically organize complex digital transformation imperatives in their discontinuous and fragmented business contexts. The findings contribute to deepened understandings of how complex organizational and environmental contexts can be comprehensively managed for systemic business and organizational transformations to leverage the value of emerging digital technologies for project-based organizations.

• Project-based firms
• Digital transformation strategy
• Institutional pressures
• The construction industry

Cao, D. , Teng, X. , Chen, Y. , Tan, D. and Wang, G. (2023), "Digital transformation strategies of project-based firms: case study of a large-scale construction company in China", Asia Pacific Journal of Innovation and Entrepreneurship , Vol. 17 No. 2, pp. 82-98. https://doi.org/10.1108/APJIE-02-2023-0027

Emerald Publishing Limited

Copyright © 2023, Dongping Cao, Xuejiao Teng, Yanyu Chen, Dan Tan and Guangbin Wang.

Published in Asia Pacific Journal of Innovation and Entrepreneurship. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

1. Introduction

Emerging digital technologies, including Internet of Things (IoT), blockchain, cloud computing, big data analytics, artificial intelligence (AI) and other related techniques which could collectively cover data collection, modeling, sharing and application processes, hold the potential to fundamentally reshape the way we work and live and thus lead to a new wave of industrial revolution ( Schwab, 2016 ; Zhou et al. , 2018 ). The integration and exploitation of digital technologies to restructure organizational business models and value-creation paradigms, which are generally termed as digital transformation, have been widely considered as the key for firms to achieve and sustain competitive advantages under current volatile, uncertain, complex and ambiguous environments ( Hess et al. , 2016 ; Veldhoven and Vanthienen, 2021 ; Verhoef et al. , 2021 ). As digital transformation is generally associated with rather challenging tasks of articulating and implementing simultaneous changes that touch upon diversified areas within an organization ( Vial, 2019 ; Hanelt et al. , 2021 ), it is of vital importance to elaborately develop appropriate digital transformation strategies to guarantee the success of the transformation initiatives ( Hess et al. , 2016 ; Sebastian et al. , 2017 ). With the criticality of the digitalization tendency being increasingly recognized by practitioners, researchers, as well as policymakers, digital transformation initiatives not only hold the potential to present game-changing opportunities for industry firms but also closely related to significant external institutional pressures to which organizations have to elaboratively respond in the current predigital economy ( Sebastian et al. , 2017 ). How to appropriately formulate and implement digital transformation strategies to achieve a favorable match between the external environment and the internal organizational needs and resources has become a crucial but challenging endeavor ( Gurbaxani and Dunkle, 2019 ).

Extant studies in the innovation and strategy management domains tend to suggest that the innovation and strategic actions of organizations are closely related to the organizational type and business nature ( Gurbaxani and Dunkle, 2019 ; Kankam-Kwarteng et al. , 2019 ). A particularly salient type of organization whose digital transformation practices need to be specifically investigated are project-based firms, not only due to their significant roles in social and economic developments but also because of their distinctive performance problems and specific business characteristics hindering integrated implementations of innovative practices. For example, it is estimated that about 41% of economic activities are organized in the form of projects in Germany in 2019 ( Schoper et al. , 2018 ) and that the global market of the project-based construction industry alone will grow to be worth around $17.5tn in 2030 ( GCP&OE, 2015 ). Despite being increasingly significant, project activities have generally suffered from diversified performance problems, with only around 35% of the projects undertaken worldwide being successful ( Nieto-Rodriguez, 2021 ). These performance problems are closely related to the discontinuity and fragmentation characteristics of project-based firms’ business contexts that tend to constrain experimentation, learning and systemic changes ( Håkansson and Ingemansson, 2013 ; Keegan and Turner, 2002 ). Extant studies have examined the adoptions and implementations of specific digital technologies (such as building information modeling [BIM] and blockchain) in project-based firms form different perspectives, covering a wide range of discrete issues such as technology acceptance intentions and adoption motivations ( Cao et al. , 2017a ; Choi et al. , 2017 ), technology implementation benefits and challenges ( Bonanomi et al. , 2020 ; Cao et al. , 2022 ) as well as the impacts of organizational and institutional contexts on technology diffusion ( Murguia et al. , 2021 ; Xing et al. , 2023 ). While project-based firms are suggested to be highly dependent on the stakeholders in the external environment to organize their complex, bespoke and temporary project initiatives in discontinuous and fragmented types of business contexts ( Gann and Salter, 2000 ; Håkansson and Ingemansson, 2013 ; Winch, 2014 ), however, there is a limited understanding of how project-based firms comprehensively consider the complex impacts of both organizational and environmental contexts to strategically execute systemic changes and thus successfully manage their complex digital transformation endeavors.

To address this gap, this study focuses on exploring how project-based firms comprehensively balance their internal needs and external institutional demands to proactively formulate and implement digital transformation strategies for organizational success in their specific business contexts. To investigate this issue, this study uses the empirical data from an in-depth case study of a large-scale Chinese construction company that has recently experienced a successful digital transformation process. As a typical and significant type of project-based firms, construction companies not only generally possess substantive internal needs of using digital technologies to address traditional performance problems but also in many regions worldwide, tend to be under complex institutional pressures from government agencies, industry peers and professional organizations for digital transformation ( Cao et al. , 2017a ; Lee and Borrmann, 2020 ; Xing et al. , 2023 ). As such, construction companies provide a particularly appropriate setting within which to empirically investigate how project-based firms comprehensively consider the complex impacts of organizational and institutional contexts to strategically manage their complex digital transformation endeavors. The remainder of this paper is organized as follows. The next section presents the theoretical background and the literature relevant to the research question. This is followed by the illustration of the research method in Section 3. Section 4 proposes an integrated framework to conceptualize key dimensions of digital transformation imperatives of project-based firms based on the case analysis results. Section 5 summarizes this paper.

2. Theoretical background and literature review

2.1 digital transformation as a strategic management challenge.

Digital transformation, which can be generally conceptualized as “a process that aims to improve an entity by triggering significant changes to its properties through combinations of information, computing, communication and connectivity technologies” ( Vial, 2019 , p. 121), has emerged as a critical social and economic development tendency widely recognized by practitioners, researchers, as well as policymakers ( Hess et al. , 2016 ; Veldhoven and Vanthienen, 2021 ; Verhoef et al. , 2021 ). At the industry or society level, digital transformation generally encompasses the profound and accelerating transformation of business and social activities, processes and competencies across the industry or the society through the integrated use of digital technologies ( Agarwal et al. , 2010 ; Majchrzak et al. , 2016 ). At the organizational level, digital transformation is concerned with the process where digital technologies create disruptions in organizational business models and trigger organizations to alter their value creation paths while managing the structural changes and contextual barriers that affect the outcomes of these disruptions ( Hess et al. , 2016 ; Vial, 2019 ). The transformation process generally covers three incremental stages ( Verhoef et al. , 2021 ): digitization , which is primarily concerned with the encoding of analog information into a digital format that can be processed by computer systems or electronic devices; digitalization , which is primarily concerned with how digital technologies can be used to change existing business processes; and digital transformation , which is primarily concerned with an organization-wide change that generally leads to the development of new organizational business models.

As the digital transformation process is generally associated with rather challenging tasks of articulating and implementing simultaneous changes that touch upon diversified areas within an organization ( Vial, 2019 ; Hanelt et al. , 2021 ), it is of vital importance to elaborately develop appropriate digital transformation strategies to guarantee the success of the transformation initiatives ( Hess et al. , 2016 ; Sebastian et al. , 2017 ). Many organizations fail with their digital transformation initiatives because they largely begin with technological changes without formulating systematic plans and coherent digital strategies to successfully manage the structural changes and contextual barriers that affect the outcomes of the digital transformation process ( AlNuaimi et al. , 2022 ). While traditional information technology strategies are typically viewed as functional-level strategies and primarily focus on the efficient management of technology infrastructure and application systems, they often lack a transformational and business-centric perspective that is needed to effectively manage the structural changes accompanying the process of leveraging digital technologies to enable business improvements ( Hess et al. , 2016 ). Due to the great potential of digital technologies (viewed as combinations of information, computing, communication and connectivity technologies) to fundamentally transform organizational products, processes, capabilities and key interorganizational relationships in extended business networks, it is critical to effectively manage the close connections between organizational digital transformation strategies and organizational strategic visions as well as other business strategies ( Bharadwaj et al. , 2013 ; Hess et al. , 2016 ).

Due to its distinctive business-centric orientation, digital transformation strategy is closely related to the concept of digital business strategy, which refers to the “organizational strategy formulated and executed by leveraging digital resources to create differential value” ( Bharadwaj et al. , 2013 , p. 472). While a digital business strategy focuses more on the future states of organizational digital business models and typically provides less guidelines on the actual transformational steps to achieve the states, a digital transformation strategy is more about providing a blueprint that guides organizations to effectively govern the transformation processes and outcomes resulting from the integration of digital technologies ( Hess et al. , 2016 ; Vial, 2019 ). The two types of closely related digital strategies both highlight the criticality of reinventing organizational business models and relationship networks to capture the business value of digital transformation initiatives. Based on the framework proposed by Bharadwaj et al. (2013) , there are four dimensions of themes to capture the key attributes of a digital strategy, including scope, scale, speed and sources of business value creation and capture. Specifically, the theme of scope is primarily concerned with the extent to which organizational business scope is impacted by digital technologies; the theme of scale is primarily concerned with how cost effectively can the digital infrastructure and associated transformation efforts scale up and down to enable the digital transformation initiative to foster structural changes and bolster strategic capabilities; the theme of speed is primarily concerned with how quickly does the digital transformation initiative bolster new strategic capabilities, enable the formation of new business networks and accelerate new product launches; the theme of sources of business value creation and capture is primarily concerned with how effective is the digital transformation initiative in leveraging value from changed business models and processes ( Bharadwaj et al. , 2013 ).

2.2 Digital transformation under institutional pressures

While implementing strategic and innovative actions, organizations tend to be significantly impacted by the pressures from different external entities and stakeholders, such as the government, professionals, interested groups and general public ( Cao et al. , 2014 ; Waeger and Weber, 2019 ). Different from the transaction cost theory which highlights the efficiency-seeking logic of organizational actions ( Williamson, 1985 ), institutional theory argues that organizational decision-making processes could be substantially motivated by social worthiness, external compliance and cultural interests to achieve adherence to rules, norms and beliefs in external institutional environments and thus to obtain social legitimacy ( Meyer and Rowan, 1977 ; Oliver, 1991 ; Scott, 2001 ). With the criticality of the digitalization tendency being increasingly recognized by practitioners, researchers, as well as policymakers, digital transformation initiatives not only hold the potential to present game-changing opportunities for industry firms to address internal efficiency problems but also closely relate to significant external institutional pressures to which organizations have to elaboratively respond in the current predigital economy ( Sebastian et al. , 2017 ). How to appropriately formulate and implement digital transformation strategies to achieve a favorable match between the external environment requirements and the internal organizational needs and resources has become a crucial but challenging endeavor ( Gurbaxani and Dunkle, 2019 ).

According to institutional theory ( Meyer and Rowan, 1977 ; Oliver, 1991 ; Scott, 2001 ), pressures from the external institutional environment can originate from both formal rules (regulations and mandates) and informal constraints (norms, conventions and beliefs). Specifically, there are three basic types of institutional pressures shaping organizational actions: regulative pressure, cognitive pressure and normative pressure ( Scott, 2001 ). Regulatory pressure is generally derived from laws, rules and policies promoting or restricting certain organizational behaviors ( Berrone et al. , 2013 ; Kostova and Roth, 2002 ). Cognitive pressure reflects the prevalently perceived knowledge and thoughts driving organizations to imitate the actions of other role-equivalent actors in a specific domain ( Cavusoglu et al. , 2015 ). Normative pressure refers to the norms, values and beliefs preserved by professionals, stakeholders or the public regarding what constitute appropriate and desirable actions ( Scott, 2001 ). Despite the potential impacts of these institutional pressures, organizations do not necessarily respond reactively to the expectations or requirements from the external institutional environment. By contrast, organizations can proactively make strategic responses to achieve a goodness of fit with the institutional environment and the effects of the institutional pressures on organizations can be either beneficial or adverse ( Goodstein, 1994 ). Due to the close relationships between organizational actions and the external institutional environment, recent years have witnessed increasing scholarly interest in the impacts of institutional pressures on other types of organizational innovation initiatives, especially in the regions (such as China) which tend to be with specific and substantial institutional pressures on industry organizations. For example, many scholars have empirically investigated the impacts of institutional pressures on organizational green innovation initiatives and provided relatively inconsistent findings ( Chen et al. , 2018 ; Chu et al. , 2018 ; Qi et al. , 2021 ; Shu et al. , 2016 ). With regard to the digital transformation initiatives, which tend to have attracted more substantial attentions from the society and require more radical changes in organizations, extant empirical investigations on digital transformation practices have primarily focused on the impacts of internal efficiency needs on transformation practices. There is limited understanding of how organizations comprehensively consider their internal efficiency needs and the impacts of external institutional pressures to strategically execute systemic changes and thus successfully manage their complex digital transformation endeavors.

2.3 Digital transformation strategies of project-based firms

Project-based firms, which are also termed as multiproject firms ( Geraldi, 2008 ), project-intensive firms ( Söderlund and Bredin, 2006 ) or project-oriented companies ( Huemann et al. , 2007 ), refer to companies which organize most of their work around relatively discrete and temporary projects that bring particular groups of resources together to provide unique solutions for a variety of clients and purposes ( Lindkvist, 2004 ; Whitley, 2006 ; Winch, 2014 ). This form of firms is often observed in a wide range of industries, including professional services sectors (e.g. advertising, architectural design and management consulting), cultural sectors (e.g. fashion, filmmaking, video games and publishing), high-technology sectors (e.g. software, multimedia and biopharmaceutical) as well as complex products and systems sectors (e.g. construction, aerospace, telecommunications and shipbuilding) ( Schoper et al. , 2018 ; Sydow et al. , 2004 ). Different from traditional firms whose primary work is volume-based or operations-oriented, project-based firms have a main emphasis on the project dimensions as they generally need to provide bespoke products or services through temporary projects discretely organized in discontinuous and fragmented types of business contexts ( Grabher, 2002 ; Havenvid et al. , 2016 ; Lindkvist, 2004 ; Sydow et al. , 2004 ). While providing bespoke products or services, project-based firms generally need to closely collaborate or interact with diversified stakeholders in the external environment to organize their project activities, not only due to the relatively extensive government regulations and industry standards on one-off but complex project initiatives ( Miozzo and Dewick, 2004 ; Winch, 1998 ) but also due to their distinctive needs to gain financial resources as well as dynamic design instructions from project owners ( Hobday, 1998 ; Winch, 2014 ) and to combine technical expertise as well as physical resources from suppliers to deliver their own technical capabilities ( Dubois and Gadde, 2002 ; Gann and Salter, 2000 ).

A particularly significant and typical type of project-based firms are construction companies. The number of construction firms on the Chinese mainland, for example, has reached 2.26 million in 2021, with a total annual output value of RMB 29.3tn ( NBSC, 2022 ), and it is estimated that the global market of the project-based construction industry will grow to be worth around $17.5tn in 2030 ( GCP&OE, 2015 ). Similar to most project-based firms in other industries, construction firms are highly dependent on stakeholders in the external environment to organize their complex projects but generally manage their work in discontinuous and fragmented types of business contexts. First, while organizing most of their work around discrete and temporary projects, construction firms are characterized by distinct decentralized structures in which project work is organized in relatively episodic and autonomous manners ( Håkansson and Ingemansson, 2013 ). Due to the episodic and autonomous nature of project work and the decentralized organizational structure, project-based construction firms generally rely heavily on casualized human and technical resources to increase the flexibility of organizational business processes ( Winch, 2014 ). The temporary project processes and the ongoing business processes are frequently ineffectively integrated, which further hinders effective organizational learning from projects and the continuous renewal of organizational capability in the long term ( Gann and Salter, 2000 ). Second, while construction firms are highly dependent on the financial, human, physical and technical resources from partners (such as project owners and suppliers) in the external environment to organize their discrete project activities, their couplings with related partners are primarily based on the temporary and discrete market-oriented interactions within corresponding individual projects in the short term, which results in relatively sparse industry-level interorganizational interaction networks with few long-term repeated and tight collaborative ties ( Cao et al. , 2017b ; Dubois and Gadde, 2002 ; Li et al. , 2019 ; Tang et al. , 2018 ). This type of tight couplings in individual projects and loose couplings in the permanent network might benefit project efficiency in the short term but tend to substantially hamper the collective adaptations of construction firms and their partners for innovative solutions in the long term ( Dubois and Gadde, 2002 ). As the digital transformation process is generally associated with the structural changes in organizational products, processes, capabilities and key interorganizational relationships in extended business networks, the successful implementations of digital transformation initiatives could also be substantially impacted by the discontinuous and fragmented business contexts of project-based construction firms.

3. Research method

A case study is considered an appropriate method for this study due to the dynamics of the research. We seek to explore how strategies are formulated and implemented in project-based firms characterized by discontinuous and fragmented types of business contexts, which belongs to the research category of “how” and matches the characteristics of the case study method in describing scenarios and deducing approaches ( Mason, 2002 ). Also, focusing on one particular case can provide an in-depth analysis of the excavation and depiction of organizational strategizing processes, elicit systematic and thorough research insights, and effectively avoid the possibility of surface-data problems potentially associated with the multiple case study method ( Dyer and Wilkins, 1991 ). The exploratory questions proposed by the present study can be well explicated through deep and intense attentiveness on the selected sample company, which encompasses rich data on related issues ( Miles and Huberman, 1994 ).

The embedded single case study method used in this study requires that the case selected is prevailingly enlightening and representative ( Yin, 2009 ). The empirical study was conducted on the case of a large-scale state-owned construction company, namely, the S Group (pseudonyms), in China. Due to the great potential of emerging digital technologies to fundamentally reshape traditional practices in the laggard construction industry, the criticality of the digitalization tendency has been increasingly recognized by practitioners, researchers, as well as policymakers in China. As such, Chinese construction companies, especially those large-scale state-owned ones, generally face significant external institutional pressures to elaboratively formulate and implement digital transformation strategies in the current predigital economy ( Cao et al. , 2014 , 2017a ). The S Group, as a large-scale conglomerate with a turnover of more than RMB 280bn per year (year 2021), a history of nearly 70 years and over 50,000 employees, is the one of the leading Chinese construction companies whose projects are all over the country. The S Group has recently carried out a successful digital transformation initiative and provides an appropriate setting within which to empirically investigate how project-based firms comprehensively consider the impacts of organizational and institutional contexts to strategically manage their complex digital transformation endeavors.

The empirical data was collected through manifold information sources, including semistructured interviews, documentation, internal archival records and observations. The research team meticulously designed multidimensional interview outlines for different types of interviewees from diversified departments or units in the company. As shown in Table 1 , a total of 11 face-to-face semistructured interviews with staff from managerial levels in the S Group and its subsidiaries were conducted from December 2021 to February 2022. All the interview data was audiotaped and transcribed verbatim by at least two members of the research team. The interview transcriptions were then confirmed by the interviewees to secure internal validity and then coded and analyzed using the thematic content analysis method.

We investigated the parent company of the S Group as the main unit of analysis (“MUA”) and its first tier and second tier subsidiary companies as subordinate unit of analysis (“SUA”). To gain a holistic picture of how the S Group, as a project-based firm, comprehensively considers the impacts of its discontinuous and fragmented business context to proactively formulate and implement digital transformation strategies under institutional pressures, we focused on the characteristics, heterogeneity and the interactions between the MUA and SUA. Based on the logic from the “part” (SUA) to the “whole” (MUA) ( Li et al. , 2020 ), an integrated structure of how the S Group formulate and implement its digital transformation strategy finally emerged from the empirical data with completeness.

4. Results and discussions

As shown in Figure 1 , our exploratory study of the S Group’s digital transformation endeavors suggests an integrated framework conceptualizing three key dimensions of digital transformation strategies of project-based firms under institutional pressures. First, the company strategically adapts to match its organizational orientations and resources with dynamic environment opportunities and threats through balancing the internal efficiency needs with the external legitimacy pressures for digital transformation. Second, the company proactively transforms its business processes and products through comprehensively managing the roles of digital technologies in optimizing defined business processes and fostering new business models. Third, the company delicately transforms its organizational structures and capabilities to integrate temporary project-level operation processes with ongoing firm-level business processes and thus to facilitate both the firm-to-project diffusion and the project-to-firm assimilation of knowledge resources. The following subsections will analyze and discuss these three key dimensions specifically.

4.1 Strategic adaptation for organization-environment fit

The classical view of strategy, which is in line with the open system perspective in organizational theory ( Thompson, 1967 ), generally regards strategy as an iterated process to achieve desirable fits between the external environment and the organization’s structures and activities ( Venkatraman and Camillus, 1984 ). The success of complex digital transformation strategies in a fast-changing environment is also closely related to how the strategies appropriately respond to the opportunities and threats posed by the environment and thus achieve favorable organization-environment fits on an ongoing process. With regard to the S Group, it has been experiencing a transformative way of doing business from traditional to digital paradigms during the past decades. Instead of being merely impacted by economic motives to address internal efficiency and effectiveness problems, the adoption and implementation of digital technologies, including BIM, IoT, AI, robotics and three-dimensional (3D) printing, in the group are dramatically shaped by the dynamic balance between internal needs and external pressures, including regulative, cognitive and normative pressure, as depicted by PM1, CTO1, CE1, CE2 and CE3:

Initially, we adopted BIM and related technologies upon client’s mandatory requirements. […] The application of digital technologies has brought us good reputations and competitiveness. […] Digitization has gained more and more support and advocates from the government, professionals and the industry and we have to keep up with the digital market. […] We set up pilot projects with high digital ability as showcases to government officials, professionals from peer projects and stakeholders. […] The government has been working on promulgating and improving regulations related to BIM adoption. […] We provide trainings on BIM and related technologies for different tiers of staff including front line workers, engineers and managers to gain both skill and mindset development. […] In recent years, with more attentions and pressures from top management, a large amount of money has been spent on innovation and digitization, and we now are reaping the rewards of our investments.

Through dynamically balancing the internal efficiency needs with the external legitimacy pressures for digitalization, the S Group has strategically planned its long-term adaptive digital transformation imperatives to match its organizational orientations and resources with the evolving opportunities and threats posed by the external environment. In the past decade, aligning with the “five-year plans” successively initiated by the Chinese Government, the S Group has proactively organized its digital transformation endeavor with different strategic orientations in different periods to achieve favorable organization-environment fits on an ongoing process. In China, the state formulates a “five-year plan” every five years, which is a nation-wide strategic plan aiming to set up the blueprint and directions for future economic and societal development across the country. For example, the five-year plan for period from year 2011 to year 2015 is called the “Twelfth Five-year Plan” and the “Thirteenth Five-year Plan” refers to the development plan for year 2016 to year 2020. Accordingly, the S Group conforms to the same pattern to adjust its own short-term digitalization plans based on its long-term digitalization strategy. Based on the framework of digital strategy themes proposed by Bharadwaj et al. (2013) , how the S Group adaptively designs its strategic focuses of digital transformation under evolving institutional pressures exerted by the environment is summarize in Table 2 .

4.2 Business transformation with technology-process integration

While strategically adapting to achieve a desirable match between the organization and the environment, a key dimension of the strategic transformation imperatives is to integration between new digital technologies and company’s business process. As digital transformation is not achieved by a single corporate decision or action but rather is an ongoing process, decision-makers must proactively and incrementally transform organizational business orientations and processes and to embrace contemporary digital technologies and comprehensively reap their benefits ( Terziovski, 2010 ). There is evidence of the impacts of technology-process integration on explicating improved business performance, including financial performance ( Baier et al. , 2008 ), new product development ( Acur et al. , 2012 ) and service innovation performance ( Kitsios and Kamariotou, 2016 ). While traditional information technology strategies are typically viewed as functional-level strategies which primarily focus on the efficient management of technology infrastructure and application systems, they often lack a transformational and business-centric perspective that is needed to effectively manage the structural changes accompanying the process of leveraging digital technologies to enable business improvements ( Hess et al. , 2016 ). Due to the great potential of digital technologies to fundamentally transform organizational products, processes, capabilities and key interorganizational relationships in extended business networks ( Lucas et al. , 2013 ), it is critical to achieve the strategic alignment between organizational digital transformation strategies and organizational business strategies ( Henderson and Venkatraman, 1999 ) and to substantially transform organizational business orientations and processes accordingly ( Bharadwaj et al. , 2013 ; Hess et al. , 2016 ).

With regard to the S Group, to effectively exploit the great potential of digital technologies to optimize and reshape business processes for enhanced organizational performance, the firm has also substantially transformed its business processes, markets, services and product types. Such transformations include not only the use of digital technologies to optimize defined business processes but also the leverage of digitalization to create new business opportunities and foster new business models. The original business value chain of clients, designers, contractors and suppliers, which has been long and widely adopted in the “conservative” project-based construction industry, are disrupted and reengineered. The role of the S Group as a contractor in the business value chain is altered and expanded. Such transformations started with the changes in the attitudes and roles of the top management team in the S Group, as commented by the interviewees DD1 and GM1:

We (the Engineering Research Institute) used to report to our chief information officer (CIO) but we will report to the group’s chief engineer (CE), same as a chief executive officer of an organization, who would be in charge of the digital transformation and innovation strategy of the whole group. […] We invest in BIM and other digital technologies about 20 to 30 million RMB per year and digital transformation strategy has gained great managerial-level support. […] Now digital transformation is the first priority in our CE’s agenda.

With such integrations and transformations, the way in which management and project tasks are carried out within the firm are changed, and the efficiency of traditional construction and management processes are improved, as commented by the interviewees GM1 and CE2:

In the past, except major mega projects, few construction companies have digitized their management processes. […] Similarly, we started by setting up pilot digital projects. […] Gradually, it (digital technology) changed the way we work. For example, we now use an “ipad” with 3D models instead of paper drawings at site; I can sit in my office, or basically anywhere to check the situations around project sites; Work can be done through all access channels at any time with platform services and electronic devices.

As the transformation process proceeds, the integration of digital technologies with organizational processes does not only optimizes defined business processes but also results in new business opportunities and new business models in which the firm operates in different markets, producing different products, providing different services and ultimately gaining considerable advantages. As a consequence, now the business scope of the firm does not only covers traditional construction activities but also expands to several new domains such as digitally-enabled building services and industrialized construction. In recent years, while the revenues of traditional construction businesses in the S Group generally increase 10%–15% annually, the annual increase rates of its new business revenues are generally above 20%. Such expansions are also specifically depicted by the interviewees DCE1 and CE3:

By digitizing traditional construction processes and products, we discovered the great values of digital data and information for lifecycle facility management. […] Our business scope has now expanded to several new domains including urban renewal, facility management, historical building restoration, interior decoration and etc. […] When it comes to large complex projects or the clients (such as overseas developers) with relatively high requirements, our ability of using digital technologies like BIM is definitely an advantage. […] Currently, the ultimate goal of the company, inspired by our digital transformation efforts, is to become a leading service provider for the entire life cycle of building facilities.

4.3 Organizational transformation for project-firm integration

Chandler (1969) claims that business strategy determines the organizational structure. Recent studies suggest that flexible organizational structures that constantly adapt to market competitions and customer needs would support the implementation of innovation strategies and help enterprises respond rapidly to the drastic changes in the external environment and maintain their competitive advantages ( Marion et al. , 2012 ). New technology plays a crucial role in achieving higher degree of integration by improving the efficiency of information flows and facilitating cooperation across organizations ( Rothwell and Whiston, 1990 ) and digital ability, in turn, requires high degree of interaction and integration across different subsystems at different levels. Our result is consistent with previous findings on the significance of organizational integration. While leveraging digital technologies to reshape organizational business processes and to strategically adapt to achieve a desirable match between the organization and the environment, the S Group has experienced substantial organizational transformations to integrate temporary project-level operation processes with ongoing firm-level business processes and to facilitate both the firm-to-project diffusion and the project-to-firm assimilation of knowledge resources.

Similar to other project-based firms, which generally organize most of their work around temporary projects in discontinuous and fragmented business contexts, a major disadvantage of the S Group was the poor integration between functionally separated projects and subsidiaries for two reasons. First, the continually changing nature of project-based firms impedes the process of project-firm integration due to the uniqueness, differentiation and specialization of varied construction projects ( Kwak et al. , 2015 ). Project-based data and knowledge generated from discrete and temporary projects have not been well integrated and used by construction companies for a long time, and the discontinuity of information between projects have been relatively striking. Second, the S Group is a large-scale conglomerate consisting of a series of subsidiary companies, which are both cooperative and competitive, and each subsidiary is engaged with different operational processes and functional units. A prominent reason for the underperformance of large-scale conglomerates across segments is the lack of effective internal coordination and organizational governance of different operational and functional units ( Maksimovic and Phillips, 2002 ).

A key organizational transformation endeavor for the S Group to integrate temporary project-level operation processes with ongoing firm-level business processes is to set up new organizational units with different types of integration functions. The primary organizational changes as an integral part of the complex digital transformation imperative in the S Group during the past decade are summarized in Table 3 . While digital technologies hold great potential to reshape the whole data processing lifecycle, including the stages of data collection, data modeling, data storage and sharing and data analysis and application ( Cao, 2023 ), such organizational changes for project- and firm-level process integration have substantially facilitated both the firm-to-project diffusion and the project-to-firm assimilation of related data and knowledge resources and thus enabled the S Group to more effectively leverage emerging digital technologies to create and capture values.

5. Conclusions

While emerging digital technologies have brought and will continue to bring remarkable changes to our society, how to appropriately formulate and implement digital transformation strategies to comprehensively manage diversified factors of their complex organizational and environmental contexts for systemic organizational changes has become a critical but challenging endeavor for organizations in many industries. This study aims to explore how project-based firms, which generally organize most of their work around temporary projects in discontinuous and fragmented types of business contexts, comprehensively balance their internal needs and external institutional demands to proactively formulate and implement digital transformation strategies for organizational success in their specific business contexts. Based on the exploratory case study with a large-scale construction company in China, an integrated framework is developed to conceptualize three key dimensions of digital transformation strategies of project-based firms: strategic adaptation for organization-environment fit through balancing the internal efficiency needs with the external legitimacy pressures; proactive business transformation through comprehensively managing the roles of digital technologies in optimizing defined business processes and fostering new business models; and delicate organizational transformation to integrate temporary project-level operation processes with ongoing firm-level business processes. This study represents an exploratory effort to empirically investigate how project-based firms strategically organize complex digital transformation imperatives in their discontinuous and fragmented business contexts. The findings contribute to deepened understandings of how complex organizational and environmental contexts can be comprehensively managed for systemic business and organizational transformations to leverage the value of emerging digital technologies for project-based organizations.

Key dimensions of digital transformation strategies of project-based firms

Overview of the interview data

Source: Author’s work

Acur , N. , Kandemir , D. and Boer , H. ( 2012 ), “ Strategic alignment and new product development: drivers and performance effects ”, Journal of Product Innovation Management , Vol. 29 No. 2 , pp. 304 - 318 .

Agarwal , R. , Gao , G. , DesRoches , C. and Jha , A.K. ( 2010 ), “ Research commentary—the digital transformation of healthcare: current status and the road ahead ”, Information Systems Research , Vol. 21 No. 4 , pp. 796 - 809 .

AlNuaimi , B.K. , Singh , S.K. , Ren , S. , Budhwar , P. and Vorobyev , D. ( 2022 ), “ Mastering digital transformation: the nexus between leadership, agility, and digital strategy ”, Journal of Business Research , Vol. 145 , pp. 636 - 648 .

Baier , C. , Hartmann , E. and Moser , R. ( 2008 ), “ Strategic alignment and purchasing efficacy: an exploratory analysis of their impact on financial performance ”, Journal of Supply Chain Management , Vol. 44 No. 4 , pp. 36 - 52 .

Berrone , P. , Fosfuri , A. , Gelabert , L. and Gomez‐Mejia , L.R. ( 2013 ), “ Necessity as the mother of ‘green’ inventions: institutional pressures and environmental innovations ”, Strategic Management Journal , Vol. 34 No. 8 , pp. 891 - 909 .

Bharadwaj , A. , El Sawy , O.A. , Pavlou , P.A. and Venkatraman , N.V. ( 2013 ), “ Digital business strategy: toward a next generation of insights ”, MIS Quarterly , Vol. 37 No. 2 , pp. 471 - 482 .

Bonanomi , M.M. , Hall , D.M. , Staub-French , S. , Tucker , A. and Talamo , C.M.L. ( 2020 ), “ The impact of digital transformation on formal and informal organizational structures of large architecture and engineering firms ”, Engineering, Construction and Architectural Management , Vol. 27 No. 4 , pp. 872 - 892 .

Cao , D. ( 2023 ), “ Towards project organizing 4.0 ”, in Winch , G.M. , Brunet , M. and Cao , D. (Eds), Research Handbook on Complex Project Organizing , Edward Elgar Publishing , Cheltenham, MA , pp. 322 - 326 .

Cao , D. , Li , H. and Wang , G. ( 2014 ), “ Impacts of isomorphic pressures on BIM adoption in construction projects ”, Journal of Construction Engineering and Management , Vol. 140 No. 12 , p. 4014056 .

Cao , D. , Li , H. , Wang , G. and Huang , T. ( 2017a ), “ Identifying and contextualising the motivations for BIM implementation in construction projects: an empirical study in China ”, International Journal of Project Management , Vol. 35 No. 4 , pp. 658 - 669 .

Cao , D. , Li , H. , Wang , G. , Luo , X. , Yang , X. and Tan , D. ( 2017b ), “ Dynamics of project-based collaborative networks for BIM implementation: analysis based on stochastic actor-oriented models ”, Journal of Management in Engineering , Vol. 33 No. 3 , p. 4016055 .

Cao , D. , Shao , S. , Huang , B. and Wang , G. ( 2022 ), “ Multidimensional behavioral responses to the implementation of BIM in construction projects: an empirical study in China ”, Engineering, Construction and Architectural Management , Vol. 29 No. 2 , pp. 819 - 841 .

Cavusoglu , H. , Cavusoglu , H. , Son , J.Y. and Benbasat , I. ( 2015 ), “ Institutional pressures in security management: direct and indirect influences on organizational investment in information security control resources ”, Information and Management , Vol. 52 No. 4 , pp. 385 - 400 .

Chandler , A.D. Jr. ( 1969 ), Strategy and Structure: Chapters in the History of the Industrial Enterprise , MIT Press , Cambridge, MA .

Chen , X. , Yi , N. , Zhang , L. and Li , D. ( 2018 ), “ Does institutional pressure foster corporate green innovation? Evidence from China's top 100 companies ”, Journal of Cleaner Production , Vol. 188 , pp. 304 - 311 .

Choi , B. , Hwang , S. and Lee , S. ( 2017 ), “ What drives construction workers' acceptance of wearable technologies in the workplace?: Indoor localization and wearable health devices for occupational safety and health ”, Automation in Construction , Vol. 84 , pp. 31 - 41 .

Chu , Z. , Xu , J. , Lai , F. and Collins , B.J. ( 2018 ), “ Institutional theory and environmental pressures: the moderating effect of market uncertainty on innovation and firm performance ”, IEEE Transactions on Engineering Management , Vol. 65 No. 3 , pp. 392 - 403 .

Dubois , A. and Gadde , L. ( 2002 ), “ The construction industry as a loosely coupled system: implications for productivity and innovation ”, Construction Management and Economics , Vol. 20 No. 7 , pp. 621 - 631 .

Dyer , W.G. and Wilkins , A.L. ( 1991 ), “ Better stories, not better constructs, to generate better theory: a rejoinder to Eisenhardt ”, The Academy of Management Review , Vol. 16 No. 3 , pp. 613 - 619 .

Gann , D.M. and Salter , A.J. ( 2000 ), “ Innovation in project-based, service-enhanced firms: the construction of complex products and systems ”, Research Policy , Vol. 29 No. 7-8 , pp. 955 - 972 .

Geraldi , J. ( 2008 ), “ The balance between order and chaos in multi-project firms: a conceptual model ”, International Journal of Project Management , Vol. 26 No. 4 , pp. 348 - 356 .

Global Construction Perspectives and Oxford Economics (GCP&OE) ( 2015 ), Global Construction 2030: a Global Forecast for the Construction Industry to 2030 , London, UK .

Goodstein , J.D. ( 1994 ), “ Institutional pressures and strategic responsiveness: employer involvement in work-family issues ”, Academy of Management Journal , Vol. 37 No. 2 , pp. 350 - 382 .

Grabher , G. ( 2002 ), “ The project ecology of advertising: tasks, talents and teams ”, Regional Studies , Vol. 36 No. 3 , pp. 245 - 262 .

Gurbaxani , V. and Dunkle , D. ( 2019 ), “ Gearing up for successful digital transformation ”, MIS Quarterly Executive , Vol. 18 No. 3 , pp. 209 - 220 .

Håkansson , H. and Ingemansson , M. ( 2013 ), “ Industrial renewal within the construction network ”, Construction Management and Economics , Vol. 31 No. 1 , pp. 40 - 61 .

Hanelt , A. , Bohnsack , R. , Marz , D. and Antunes Marante , C. ( 2021 ), “ A systematic review of the literature on digital transformation: insights and implications for strategy and organizational change ”, Journal of Management Studies , Vol. 58 No. 5 , pp. 1159 - 1197 .

Havenvid , M.I. , Håkansson , H. and Linné , Å. ( 2016 ), “ Managing renewal in fragmented business networks ”, IMP Journal , Vol. 10 No. 1 , pp. 81 - 106 .

Henderson , J.C. and Venkatraman , H. ( 1999 ), “ Strategic alignment: leveraging information technology for transforming organizations ”, IBM Systems Journal , Vol. 38 No. 2.3 , pp. 472 - 484 .

Hess , T. , Matt , C. , Benlian , A. and Wiesböck , F. ( 2016 ), “ Options for formulating a digital transformation strategy ”, MIS Quarterly Executive , Vol. 15 No. 2 , pp. 123 - 139 .

Hobday , M. ( 1998 ), “ Product complexity, innovation and industrial organization ”, Research Policy , Vol. 26 No. 6 , pp. 689 - 710 .

Huemann , M. , Keegan , A.E. and Turner , J.R. ( 2007 ), “ Human resource management in the project oriented company: a critical review ”, International Journal of Project Management , Vol. 25 No. 3 , pp. 312 - 320 .

Kankam-Kwarteng , C. , Osman , B. and Donkor , J. ( 2019 ), “ Innovative low-cost strategy and firm performance of restaurants: the moderation of competitive intensity ”, Asia Pacific Journal of Innovation and Entrepreneurship , Vol. 13 No. 3 , pp. 266 - 281 .

Keegan , A. and Turner , J.R. ( 2002 ), “ The management of innovation in project-based firms ”, Long Range Planning , Vol. 35 No. 4 , pp. 367 - 388 .

Kitsios , F. and Kamariotou , M. ( 2016 ), “ The impact of information technology and the alignment between business and service innovation strategy on service innovation performance ”, Proceedings in 2016 International Conference on Industrial Engineering, Management Science and Application , pp. 1 - 5 .

Kostova , T. and Roth , K. ( 2002 ), “ Adoption of an organizational practice by subsidiaries of multinational corporations: institutional and relational effects ”, Academy of Management Journal , Vol. 45 No. 1 , pp. 215 - 233 .

Kwak , Y.H. , Sadatsafavi , H. , Walewski , J. and Williams , N.L. ( 2015 ), “ Evolution of project based organization: a case study ”, International Journal of Project Management , Vol. 33 No. 8 , pp. 1652 - 1664 .

Lee , G. and Borrmann , A. ( 2020 ), “ BIM policy and management ”, Construction Management and Economics , Vol. 38 No. 5 , pp. 413 - 419 .

Li , L. , Liu , Y. and Feng , Y.C. ( 2020 ), Case Study Research: Methods and Practice , Peking University Press , Beijing .

Li , X. , Li , H. , Cao , D. , Tang , Y. , Luo , X. and Wang , G. ( 2019 ), “ Modeling dynamics of project-based collaborative networks for BIM implementation in the construction industry: empirical study in Hong Kong ”, Journal of Construction Engineering and Management , Vol. 145 No. 12 , p. 5019013 .

Lindkvist , L. ( 2004 ), “ Governing project-based firms: promoting market like processes within hierarchies ”, Journal of Management and Governance , Vol. 8 No. 1 , pp. 3 - 25 .

Lucas , H. Jr. , Agarwal , R. , Clemons , E.K. , El Sawy , O.A. and Weber , B. ( 2013 ), “ Impactful research on transformational information technology: an opportunity to inform new audiences ”, MIS Quarterly , Vol. 37 No. 2 , pp. 371 - 382 .

Majchrzak , A. , Markus , M.L. and Wareham , J. ( 2016 ), “ Designing for digital transformation ”, MIS Quarterly , Vol. 40 No. 2 , pp. 267 - 278 .

Maksimovic , V. and Phillips , G. ( 2002 ), “ Do conglomerate firms allocate resources inefficiently across industries? Theory and evidence ”, The Journal of Finance , Vol. 57 No. 2 , pp. 721 - 767 .

Marion , T. , Dunlap , D. and Friar , J. ( 2012 ), “ Instilling the entrepreneurial spirit in your R and D team: what large firms can learn from successful start-ups ”, IEEE Transactions on Engineering Management , Vol. 59 No. 2 , pp. 323 - 337 .

Mason , J. ( 2002 ), Qualitative Researching , Sage Publications , London .

Meyer , J.W. and Rowan , B. ( 1977 ), “ Institutionalized organizations: formal structure as myth and ceremony ”, American Journal of Sociology , Vol. 83 No. 2 , pp. 340 - 363 .

Miles , M.B. and Huberman , A.M. ( 1994 ), Qualitative Data Analysis: An Expanded Sourcebook , Sage Publications , Thousand Oaks, CA .

Miozzo , M. and Dewick , P. ( 2004 ), Innovation in Construction: A European Analysis , Edward Elgar , Cheltenham .

Murguia , D. , Demian , P. and Soetanto , R. ( 2021 ), “ Systemic BIM adoption: a multilevel perspective ”, Journal of Construction Engineering and Management , Vol. 147 No. 4 , p. 4021014 .

National Bureau of Statistics of China (NBSC) ( 2022 ), China Statistical Yearbook 2022 , China Statistics Press , Beijing ( in Chinese ).

Nieto-Rodriguez , A. ( 2021 ), “ The project economy has arrived ”, Harvard Business Review , Vol. 99 No. 6 , pp. 38 - 45 .

Oliver , C. ( 1991 ), “ Strategic responses to institutional processes ”, The Academy of Management Review , Vol. 16 No. 1 , pp. 145 - 179 .

Qi , G. , Jia , Y. and Zou , H. ( 2021 ), “ Is institutional pressure the mother of green innovation? Examining the moderating effect of absorptive capacity ”, Journal of Cleaner Production , Vol. 278 , pp. 1 - 11 .

Rothwell , R. and Whiston , T.G. ( 1990 ), “ Design, innovation and corporate integration ”, R&D Management , Vol. 20 No. 3 , pp. 193 - 201 .

Schoper , Y.G. , Wald , A. , Ingason , H.T. and Fridgeirsson , T.V. ( 2018 ), “ Projectification in western economies: a comparative study of Germany, Norway and Iceland ”, International Journal of Project Management , Vol. 36 No. 1 , pp. 71 - 82 .

Schwab , K. ( 2016 ), The Fourth Industrial Revolution , World Econ Forum , Geneva .

Scott , W.R. ( 2001 ), Institutions and Organizations , Sage Publications , Thousand Oaks, CA .

Sebastian , I.M. , Ross , J.W. , Beath , C. , Mocker , M. , Moloney , K.G. and Fonstad , N.O. ( 2017 ), “ How big old companies navigate digital transformation ”, MIS Quarterly Executive , Vol. 16 No. 3 , pp. 197 - 213 .

Shu , C. , Zhou , K.Z. , Xiao , Y. and Gao , S. ( 2016 ), “ How green management influences product innovation in China: the role of institutional benefits ”, Journal of Business Ethics , Vol. 133 No. 3 , pp. 471 - 485 .

Söderlund , J. and Bredin , K. ( 2006 ), “ HRM in project-intensive firms: changes and challenges ”, Human Resource Management , Vol. 45 No. 2 , pp. 249 - 265 .

Sydow , J. , Lindkvist , L. and DeFillippi , R. ( 2004 ), “ Project-based organizations, embeddedness and repositories of knowledge: editorial ”, Organization Studies , Vol. 25 No. 9 , pp. 1475 - 1489 .

Tang , Y. , Wang , G. , Li , H. and Cao , D. ( 2018 ), “ Dynamics of collaborative networks between contractors and subcontractors in the construction industry: evidence from national quality award projects in China ”, Journal of Construction Engineering and Management , Vol. 144 No. 9 , p. 5018009 .

Terziovski , M. ( 2010 ), “ Innovation practice and its performance implications in small and medium enterprises (SMEs) in the manufacturing sector: a resource‐based view ”, Strategic Management Journal , Vol. 31 No. 8 , pp. 892 - 902 .

Thompson , J.D. ( 1967 ), Organizations in Action , McGraw-Hill , New York, NY .

Veldhoven , Z.V. and Vanthienen , J. ( 2021 ), “ Digital transformation as an interaction-driven perspective between business, society, and technology ”, Electronic Markets , Vol. 3 , pp. 1 - 16 .

Venkatraman , N. and Camillus , J.C. ( 1984 ), “ Exploring the concept of ‘fit’ in strategic management ”, The Academy of Management Review , Vol. 9 No. 3 , pp. 513 - 525 .

Verhoef , P.C. , Broekhuizen , T. , Bart , Y. , Bhattacharya , A. , Dong , J.Q. , Fabian , N. and Haenlein , M. ( 2021 ), “ Digital transformation: a multidisciplinary reflection and research agenda ”, Journal of Business Research , Vol. 122 , pp. 889 - 901 .

Vial , G. ( 2019 ), “ Understanding digital transformation: a review and a research agenda ”, The Journal of Strategic Information Systems , Vol. 28 No. 2 , pp. 118 - 144 .

Waeger , D. and Weber , K. ( 2019 ), “ Institutional complexity and organizational change: an open polity perspective ”, Academy of Management Review , Vol. 44 No. 2 , pp. 336 - 359 .

Whitley , R. ( 2006 ), “ Project-based firms: new organizational form or variations on a theme? ”, Industrial and Corporate Change , Vol. 15 No. 1 , pp. 77 - 99 .

Williamson , O.E. ( 1985 ), The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting , Free Press , New York, NY .

Winch , G. ( 1998 ), “ Zephyrs of creative destruction: understanding the management of innovation in construction ”, Building Research and Information , Vol. 26 No. 5 , pp. 268 - 279 .

Winch , G.M. ( 2014 ), “ Three domains of project organizing ”, International Journal of Project Management , Vol. 32 No. 5 , pp. 721 - 731 .

Xing , M. , Cao , J. and Cao , D. ( 2023 ), “ Impacts of policy mix comprehensiveness on BIM implementation: moderating effects of environmental state and response uncertainty ”, Journal of Construction Engineering and Management , Vol. 149 No. 2 , p. 4022171 .

Yin , R.K. ( 2009 ), Case Study Research: Design and Methods , Sage Publications , Thousand Oaks, CA .

Zhou , J. , Li , P. , Zhou , Y. , Wang , B. , Zang , J. and Meng , L. ( 2018 ), “ Toward new-generation intelligent manufacturing ”, Engineering , Vol. 4 No. 1 , pp. 11 - 20 .

Acknowledgements

This study is financially supported by the National Natural Science Foundation of China (Grant Nos. 71802150 and 72271186).

Corresponding author

Related articles, we’re listening — tell us what you think, something didn’t work….

Report bugs here

All feedback is valuable

Please share your general feedback

Join us on our journey

Platform update page.

Visit emeraldpublishing.com/platformupdate to discover the latest news and updates

Questions & More Information

Answers to the most commonly asked questions here

DBS: Transforming a banking leader into a technology leader

Jump to Section: Opportunity | Solution | Impact | Lessons learned

Keep Exploring

Creating value beyond the hype

The solution.

To embody the vision of becoming a technology leader, the DBS team adopted the mnemonic GANDALF, representing the giants of the tech industry: "G" for Google, "A" for Amazon, "N" for Netflix, "A" for Apple, "L" for LinkedIn, and "F" for Facebook. The central "D" symbolizes DBS aspiration to join the league of iconic technology companies. Drawing inspiration from The Lord of the Rings , GANDALF became the powerful rallying cry for their ambitious digital transformation journey. Throughout these efforts, DBS kept the focus firmly on the customer.

To scale up capabilities, McKinsey aided DBS in building its new operating model around platforms. DBS created 33 platforms aligned to business segments and products. Each platform had a “2-in-a-box” leadership model, which meant each one was jointly led by a leader from the business and one from IT.

“Digital transformation has been instrumental in driving growth, delivering significant financial outcomes across all business segments and markets. By transforming rigid systems into nimble technology stacks, we have gained a sustainable advantage, enabling us to scale with agility.” – Jimmy Ng, Chief Information Officer and Group Head of Technology & Operations, DBS

Keeping solutions centered around customers, DBS introduced a program called Managing Through Journeys. It scaled to include over 60 impactful customer journeys, each led by a senior leader, addressing major pain points like account opening and ATM waiting times. Simultaneously, DBS scaled up cloud migration, invested in automation, and developed microservices to support modular architecture, allowing components to be swapped out upon aging.

Partnering with McKinsey, DBS transformed its data-driven operating model, aiming to leverage data for innovative outcomes and widespread AI adoption. With McKinsey AI experts' support, they established a program that reduced end-to-end AI deployment time from 18 months to less than 5 months. The goal is to reduce that even more, to just a few weeks, which the bank considers essential to fully scaling AI. Today, there is an industrialized platform that enables AI deployment called ALAN, which is instrumental to achieving this accelerated deployment.

“We need an innovation culture, which doesn’t create itself. You must deliberately drive that and put in the processes and frameworks to encourage innovation, risk-taking, and entrepreneurship—it’s about knowing it”s OK to try and fail.’ – Piyush Gupta, Chief Executive Officer, DBS

DBS’ ability to achieve all of this was made possible through fundamental shifts in its culture, operational and technical expertise, and a transformative operating model. To recruit and retain digital talent, they adopted innovative strategies like hackathons and established three technology hubs to foster collaboration. DBS used AI to predict potential employee exits, enabling timely HR intervention. Moreover, they invested in institutional learning through Digify a module-based learning pathway to train employees in concepts such as agile, big data, and journey thinking, and launched DBS Academy to train technologists in a DBS-specific curriculum. Making the transformation successful required a significant shift in leadership mindsets and behaviors. With support from McKinsey, DBS scaled T-Sprints (Transformation Sprints) to build top team alignment and new leadership skills across both the top of the house as well as different business, support, platform and geographic units within the bank.

The bank put in place systems to measure outcomes from the digital transformation. The digital value capture framework was co-developed with McKinsey to quantify benefits of acquiring, transacting, and engaging with digital customers. This allowed them to become one of the first banks in the world to showcase powerfully to investors the higher revenue, lower cost to serve and higher ROE from serving digital customers over traditional customers. The underlying methodology also allowed the bank to bake initiatives needed to drive value creation through digitization into the scorecards and performance management framework of the bank. This has translated into consistent shareholder gains, especially as innovation and data-driven transformation further accelerate both the growth trajectory and profitability (ROE) of the franchise.

Making GANDALF a reality at DBS has taken more than the wave of a magic wand. It required hard work, addressing culture changes, and consistent engagement at all levels, but it has transformed a top-tier bank into a top-tier tech company.

Related case studies

Kiwibank: Building a better bank for the future of New Zealanders

BCP: Taking banking to new heights on a digital rocketship

Allianz Direct: Advancing as Europe’s leading digital insurer

Featured publication.

Rewired: The McKinsey guide to outcompeting in the age of digital and AI

Ready to talk.