How an Efficient Digital Transformation Framework Maximizes Return on Equity At Walmart and other Leading Companies

An effective digital transformation framework maximizes the return on equity for organizations of all sizes.

An effective digital transformation framework maximizes the return on equity for businesses. Every business is trying to maximize return on equity, though, depending on the stage of the company, the meaning of equity can differ. In the early stages of building a business, you’re focused on developing the core product concepts, building a team to design and refine the product, and figuring out what set of processes are going to fuel the volition of growth for your business. Some might say this stage is where you and team develop sweat equity in the business- the efforts that have been sunk into the product and processes, but which you’re still waiting to see the returns on. 

Once you’ve solidified business processes, built a team, and are generating revenue on sales, you may arrive at a growth plateau; people can only work so quickly, and certain processes create bottlenecks that the rest of the organization waits on in order to move forward. You can’t really accelerate the organization further, and you can only foresee a certain degree of returns on your efforts. This generally begins to happen as you scale processes and have to deal with a higher volume of transactions on a regular basis. 

At this stage, some companies are already “digital”. Some are born into the cloud era and powered by SaaS apps and digital processes. Others are just developing technological infrastructure to support processes. 

How can these organizations maximize the return on their equity and investments with an effective digital transformation framework? And how can older companies maximize the value of their existing assets and investments with technology such as data analytics, robotics, and enterprise automation

The World Economic Forum’s report on Maximizing Return on Digital Investments finds that:

  • When new technologies are deployed in combination, the productivity increase is 3x higher than if new technologies are deployed in isolation. 
  • Industry leaders “achieve a greater productivity increase from investments in new technology than followers – 70% v. 30%. Leaders in most industries tend to be “larger companies by revenue.” 
  • “from 2016 to 2020, total new technology spend is expected to increase by 13% compound annual growth rate to $2.4 trillion per year, led by the internet of things (IoT) (42% of total spend in 2020).”

These findings indicate that companies do well to work with an “ecosystem” mindset when it comes to technology, rather than implementing point solutions for individual problems. The 70 / 30 findings also indicate that an effective digital transformation framework can work as a value-multiplier for industry-leading companies, that builds on the value of existing systems, assets, and processes. 

Companies do well to work with an “ecosystem” mindset when it comes to technology, rather than implementing point solutions for individual problems. Click To Tweet

Related: How automation is set to evolve in 2022

Case Studies

We can examine a few case-studies- Airbnb, a digital-native company rethinking a traditional service (the bed-and-breakfast), for the cloud era, that needs their vision for data-driven decision-making across the enterprise to match their reality. Another, an august retail institution, Walmart, using their digital transformation framework to build on and create new value for, and from, the existing value of their vast retail footprint, customer base, and concrete assets. Grab- a ride-sharing and food delivery company using an ecosystem mindset automation to streamline processes across their SaaS apps. And finally, Fundbox- accelerating their revenue-generating operations by automating data flow to sales teams in and out of their Salesforce and their data warehouse. 

AirBnb: A digital native increasing data usage through reskilling

Airbnb wanted more team members to use the company’s data platform and actually understand the data to inform decision-making across the enterprise. Even as a digital-native company, they needed more internal data analytics training to get data usage to the levels they wanted to see. They started an Airbnb “university”. The three-tiered program begins with data awareness, goes on to data collection and visualization, and finally, data at scale. The World Economic Forum’s Digital Enterprise report for 2018 reports that “in the programme’s first year, about 23% of all employees, or 700 people, participated in at least one class. The weekly active users on the company’s data platform climbed from 30% of employees to 45% in 2017.”

This vignette highlights the importance of reskilling in order to see optimum return on digital investments. When implementing a new enabler such as a data analytics platform, leadership will need to make sure employees receive any additional training necessary in order to use the platform effectively and create value from it. 

Walmart: digital acquisitions & building on existing assets

“Asset-heavy industries realize more value from robotics; asset-light industries realize greater value from mobile/social media, primarily led by efficiency-driven opportunities.” – WEF report on Maximizing Return on Digital Investments

Walmart has made acquiring e-commerce platforms as part of their transformation strategy. They bought for $5 billion, according to Forbes, and paid 16 billion for a 77% controlling stake in Flipkart in India. They’re also using technology to modernize traditional processes such as warehousing and logistics. They’ve introduced Witron technology into their new “distribution center of the future” in Shafter, California-  robotic palletizing that cuts costs and enables the delivery of fresher groceries, allowing Walmart to pass further value and savings on to its customer base.

Walmart is making the right moves by deploying new technologies in combination rather than in isolation (they’ve introduced online grocery pickup, in addition to warehouse automation and acquiring ecommerce platforms). Their digital transformation strategy focuses on capitalizing on their existing assets. As Pam Danzinger writes for Forbes, “leveraging its physical assets and personal relationships with customers is Walmart’s ultimate competitive asset.”

Grab: An ecosystem mindset and enterprise automation-driven digital transformation framework create value

Grab, like many modern enterprises, runs on a SaaS ecosystem, ranging from a collaborative chat tool (Slack), to their cloud directory (Jumpcloud), and many more cloud-based and on-premise applications and systems. Grab relies on a strong foundation of enterprise application integration and automation to power business processes at scale throughout their technology ecosystem. They use an enterprise automation platform that can perform both integration and automation, which offers them a robust and streamlined solution. 

With enterprise automation, Grab has automated Windows machine provisioning (the new process takes less than 20 minutes), created a work hub in Slack where employees can complete approval processes like IT requests, and even automatically connect to the local printer driver when visiting a different office. They save 200 hours of IT time per week on one automation alone, and other automations accelerate or redesign existing processes to be more elegant and efficient. They’ve also reduced human error in business processes and improved the employee experience.

Streamlining processes to accelerate Revenue Ops during growth

Data flow and business process automation becomes important when your company needs to scale revenue-generating operations during growth. This is especially true for companies where your asset is something like software or credit services, where the good is intangible, so you don’t deal with traditional logistics and supply chain, and your revenue model is really driven by sales calls. 

Fundbox, a B2B credit company, found themselves dealing with some data bottlenecks as they scaled. Previously, they had a process that required them to get the engineers to pull data from their MySQL tables and provide it to sales representatives, to assist them in providing a personalized and informed customer journey. It was taking their engineer’s time away from core goals like product innovation. 

A point solution would be to hire more specialized workers to pull these reports and serve the insights to the sales team. But this solution doesn’t scale. Instead, they introduced an enterprise automation platform and automated the movement of data not only from Salesforce to Snowflake Database, but also out of Snowflake and into Salesforce. These in-context insights allow their sales and success teams to have up-to-date insights on the customer they are talking to in-real time.  

Once the process has been designed and you’re just ironing out bottlenecks, automation can really help to accelerate processes. To see optimal return on your digital investments, it’s best to think past point solutions and strive to achieve transformative change with business technology- the deployment of multiple technologies and building on existing assets and strengths to really achieve the returns you want to see on the equity you and your team have built in your company.  

Taking steps to implement enterprise automation as part of your digital transformation framework

As your company grows, you will inevitably hit a productivity plateau. Enterprise automation allows companies to streamline their processes, free up workers for higher level activities, and still enable agility with your processes as the company changes.  

Workato is an enterprise automation platform that can integrate and automate SaaS and on-prem applications, databases, and systems. Enterprise automation can shift the focus at your organization from accelerating existing processes to orchestrating automated processes, as part of your digital transformation framework. To learn more, request a demo from our team.