The Rewards and Challenges of Digital Transformation – An Amazon Case Study

I am always intrigued by companies that get it right when it comes to technology. Take Amazon, for example. Their processes are so well thought out, everything is well communicated, and service levels are high. The high degree of ease and convenience for customers to do business with them is a main driver of their success. They also provide a great deal of control to their customers in various stages of the sales process. Once items are selected, they offer a range of delivery options and visibility throughout the entire shipping process.

Amazon is a company that is in a state of continuous digital transformation. They don’t just create a highly automated process and stop there. They keep tweaking and improving it to make it faster, better, and cheaper. Although they are considering applying some cutting edge technologies such as AI and drones, most of the technology they use is widely available. Their competitive advantage comes from successfully deploying these technologies through a strong blend of people, process, and technology, all with a focus on exceeding customer expectations.

Amazon also reaps significant benefits from their digital efforts by accumulating a tremendous amount of data that they use to learn about customer and supplier trends, introduce new products, and improve overall service delivery capabilities. These data assets enable management to make better decisions that result in increased sales and reduced costs.

It is not easy for companies like Amazon to achieve and sustain this level of digital transformation. They are very process-centric, continually improving their processes and providing a significant level of training to their employees. They are also willing to take risks, accepting that while some of their initiatives might not succeed, there will be lessons learned that they can incorporate into other areas of the business.

As a recent example, given that upcoming automation tools such as drones and robots could significantly impact a number of existing jobs, management has started a large-scale training program to retrain these workers for future positions rather than pursuing the normal route of layoffs and re-hirings. This strategy will result in a stronger corporate culture and a positive impact on employee morale and loyalty. It will also reduce the risk associated with new hires.

As you can see from Amazon’s example, when a company embarks on a digital transformation journey, rewards heavily outweigh challenges if the effort is orchestrated in a well-thought-out and planned manner. Stay tuned for next month, when we will discuss how your company can get started on such a journey.

Sassan S. Hejazi can be reached at Email or 215.441.4600.

Subscribe to Kreischer Miller's email newsletter

You may also like: