Sunset Industry & Digital Transformation
Nothing beats a real-life example to wholly understand and appreciate what a digital transformation journey (can) entail, and the value it can bring for a company. Let’s take a look at the classic example of how Pitney Bowes, an American company with roots in the sunset mailing industry, has evolved, by leveraging on digital tools to keep their business going, and growing.
The case of Pitney Bowes
Pitney Bowes is a nearing century-old company with its businesses grounded in the mailing device industry. However, with the rise of digital technologies in the 2000s, the company has the foresight to know that this will affect its business negatively and they cannot stay status quo. They started to acquire and diversify into different industries. In 2008, the financial tsunami swept by and its mailing business was badly hit. Also, the cost pressure arising from the numerous business acquisitions compounded the issue. There was a need to resolve this.
A Centralised System
The company started looking into streamlining their business processes. As a result of acquiring so many businesses, the company was operating with several different supporting systems and had close to 40 general ledgers. There was a need to adopt a centralised system that was based on up-to-date technologies. Pitney Bowes acted swiftly with this adoption and it resulted in decrease in the company expenses by over 100 million. They then channeled these cost-savings to into product innovation.
Pitney Bowes’ strategic shift from just basing its business on the mail devices (which they see its value dwindle by the day) to technology-fueled growth markets such as shipping and e-commerce is worth highlighting. These developments fueled growth and increased competitiveness for the company, who reported their fastest annual revenue growth in a decade, in 2017.
As part of its digital transformation journey, Pitney Bowes combined mailing and the use technologies such as Internet of Things (IoT) to help businesses garner information to better deliver client-centric services. This helps companies, which they serve, use mail in a more effective way reach their target audience. In the same thread, Pitney Bowes use tracking and delivery information to predict when a parcel will reach the consumer as part of its shipping endeavour. Such value-add is important for companies to remain competitive amidst increasing consumer expectations.
The organisation continued to evolve and innovate. Pitney Bowes Commerce Cloud was introduced in 2016 to empower their clients to identify customers, uncover opportunities, power shipping, facilitate communication, and manage transactions.
You can check out the interview with Pitney Bowes’ Chief Executive Officer, Marc Lautenbach, on their digital journey via the following link: https://www.coursera.org/lecture/bcg-uva-darden-digital- transformation/interview-with-pitney-bowes-ceo-marc-lautenbach-iUlhI
(Resource credits: Digital Transformation course by Boston Consulting Group and the University of Virginia on Coursera)
Continuous Process to Stay Competitive
As you can see from the Pitney Bowes’ example, digital transformation takes time and is not a once-off change. In fact, it is a continuous process that can help companies stay competitive and adaptable as a company’s goals, needs and environment evolve. When technologies are applied strategically, organisations can reap the benefits of staying competitive and relevant as such transformation can translate into efficiency, cost-savings and also propel new areas of growth for companies.