Colin McMahon is a senior market research analyst working with PTC’s Corporate Marketing team, helping to provide actionable insights, challenging perspectives, and thought leadership on trends, technologies, and markets. Colin has been working professionally as a research analyst for many years, and he enjoys examining and evaluating just how large the overall impact of digital transformation technologies will be. He has a passion for augmented reality and virtual reality initiatives and believes that understanding the connected ecosystem of people and technology is key to a company fully realizing its potential in the 21st century.
Many know at least a few benefits of digital transformation - namely productivity increases, improved collaboration potential, and greater internal visibility – but the benefits go far beyond these highlights.
As its name directly states, we are witnessing a fundamental transformation that is not just about improving existing processes and workflows but creating entirely new possibilities that didn’t exist before.
In this blog series, PTC gives the spotlight to five digital transformation benefits that are often overlooked by either executives, knowledge employees, frontline employees, or a mix of all three. We’ve made our list based on data from our recent survey, a full rundown is available with the release of our Digital Transformation Strategy: Where Executives and End Users Differ on the Future (and Why it Matters) whitepaper.
The chart below highlights a list of benefits digital transformation can bring an organization. To enhance clarity, PTC segmented respondents by their role: frontline employees, knowledge employees, and executives, to better understand exactly who valued each benefit. For this blog, we’ll be focusing on market competition. Specifically, how digital transformation initiatives go beyond improving an organization’s ability to compete in its own market but open the possibilities to competing – and in some cases leading -- in spaces where business opportunity used to be severely limited.
Understanding digital transformation and market segmentation
Here is a wonderful example to help frame exactly how digital evolution can blur the previously concrete lines of market segmentation: Let’s look at Apple Corps and Apple Inc. When first incorporated in the 1970s, Apple Inc. was known as Apple Computer Inc. We’re all familiar with the computer Steve Jobs and Steve Wozniak created – but at the time Apple Computer Inc. was focused on its line of Macintosh computers. Apple Corps, by contrast, is the multimedia music production company owned by the Beatles.
At Apple Computer’s inception, Apple Corps sued for trademark infringement, a suit which it won. Both companies had to promise not to enter the other’s respective market, with Apple Corps promising not to sell computers and Apple Computer promising not to sell music. You see where this is going? At the time, it was an easy decision for Apple Computer. After all, they made the Macintosh PC and little else.
As the decades passed and technology evolved, the line started to blur. Apple inched closer with the iPod, but that wasn’t strictly music – it was still only hardware. Yet, with the arrival of the internet and e-commerce, Apple Computer couldn’t resist. iTunes was born and Apple Corps sued for breach of contract. To spare the legal details, the two companies did eventually reach an agreement and Apple Computer became simply known as Apple Inc.
This saga is not unique (apart from how similar the names of the two companies are). Over the past several decades, as organizations pursue digital transformation and embrace new revenue streams and product lines, market lines that used to be seen as absolute are often blurred and frequently obliterated.
How digital transformation strengthens the ability to compete in new markets
It may sound cliché to say we live in a connected world, but it’s true. The full implications of such a statement, however, are often not fully considered. When we say connected world, we are not just talking about emails or text or social media, but the connective infrastructure at the forefront driving digital transformation.
Apple made computers, then they made MP3 players, then finally they understood both products could be combined into the iPhone, and this could be paired with iOS and a whole host of other Apple software platforms and services. Everything became connected and works together to go above and beyond what was previously possible.
Here’s another example, and one that’s a PTC use case. Celli Group is an equipment manufacturer for the beverage service distribution, making equipment such as soda and beer dispensers for restaurants and bars, among other products. Before digital transformation, the transaction was almost directly forward-progressing. The client ordered the product, Celli Group provided the product, and made repairs/conducted service as needed.
Then came digital transformation – in this case, supported by ThingWorx. ThingWorx is PTC’s IoT solution, all about linking network and online potential to various devices into one connected ecosystem. For Celli Group, this entailed linking the beverage dispensers themselves. With this technology and this data, Celli Group suddenly had more options. Not only were they selling valuable hardware, but the software side now enabled new real-time tracking insights that were hyper-relevant to customers.
Celli Group can easily monitor things like which beverages were most popular, and this ability to track and compile product usage data could be sold as an additional service, on top of the hardware delivery and service they were already providing. And, as the video below showcases, the company has kept pushing its digital capabilities, using it now to promote sustainability and new service models.
Executives today should still be knowledge experts in their respective fields, but they must also be much more open to business expansion. Imagine if Apple had responded “but we’re computer makers” when exposed to the possibilities of a platform like iTunes, or Netflix had stayed with its mail-based video delivery system instead of looking to digital streaming. Digital transformation enables the possibility, but there is still no substitute for human ambition and creative vision.
Think expansively about digital transformation
Strong digital transformation ROI goes far beyond productivity bonuses and increased employee connectivity. Every industry is seeing enormous potential from digitization. Some opportunities are apparent and readily realized, while others are longer term, or require more innovative thinking. Digital transformation’s relationship with market competition falls into both categories. Sometimes the growth is so apparent it is hard to miss, and sometimes it requires a flexible mindset and the vision to commit to completely redesigning how your organization generates revenue.
It is a transformation, not just an upgrade. The companies that fully realize the benefits will not simply be looking to improve what was already there but embrace the potential of “what if,” even if it means re-thinking or evolving corporate identity. PTC itself is going through this type of transformation as we fully embrace the potential of SaaS and cloud-based infrastructure. Such change often is not quick or easy, but – if done properly – is almost always rewarded with not just a continued competitive presence, but sometimes market dominance…even if it was a market your organization didn’t use to compete within.
Digital Transformation Strategy: Where Executives and End Users Differ
Get actionable insights based on digital transformation based on a survey of executives and end users
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