ford digital transformation case study

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Ford’s high-tech business transformation, fueled by cloud

The american auto giant’s cloud-first strategy has helped drive its shift to ‘software-defined vehicle’ manufacturing, replete with revenue-generating services that make it a cloud software provider as well..

Ford Motor Co.’s wholesale pivot to technology has transformed not only the automaker’s business operations but its corporate identity.

“We have become much more of a software company than we were 10 to 20 years ago,” says John Musser, director of engineering for Ford’s commercial division, Ford Pro. “People don’t think of a large, 100-year-old manufacturing company as high tech.”

But it is — and Ford now positions itself as a software-defined vehicle (SDV) manufacturer, Musser says.

One need only look within Ford’s executive ranks to see the technology talent driving its digital future: Doug Field, Ford’s chief electric vehicle (EV) and digital systems officer, and Rob Bedicheck, executive director of platform architecture, were both recruited from Apple. Mike Amend, Ford’s chief enterprise technology officer, was once CTO for Dell’s global online business.

Musser himself has spent his entire career developing software, at Ford, on Wall Street, with the Bill Gates Foundation, and at several startups, including one he sold to MuleSoft.

But it is the cloud — and Ford’s cloud-first strategy — that is propelling Ford’s transformation where the rubber meets the road.

Fueled by cloud

Ford’s cloud journey, which began roughly a decade ago, continues to this day, Musser says, as the automaker seeks to take advantage of advances in the key technologies fueling its transformation, including the internet of things (IoT), software as a service, and the latest offerings on Google Cloud Platform (GCP).

Ford is unique among large automotive manufacturers in its selection of GCP, which Dave McCarthy, research vice president of cloud and edge services at IDC, says provides Ford a strong foundation for data-driven operations.

“Google Cloud’s strength in data analysis and AI tools is a perfect fit for this new world of software-defined vehicles,” McCarthy says. “It will enable Ford to better understand how their vehicles are performing in the field and lead to future improvements.”

Three years ago, Ford reorganized its cloud-first, SDV manufacturing organization into three interconnected though separate business units: Ford Pro, for commercial customers; Model-E, for electric vehicles; and Blue, for traditional customers and vehicles employing all engine types.

The cloud, Musser maintains, has been the primary catalyst for the SDV blueprint, driving technology advances in each unit, such as EVs, automated driving capabilities, and tailored services for multiple customer segments.  

“We now have the ability through digital connectivity to provide a one-stop shop for commercial customers,” Musser says about Ford Pro’s ability to provide unique technical and financial services for commercial customers. “It’s the software, the digital glue, which is the key to enabling that to happen.”

Ford’s digital transformation, like those of most enterprises, is far from complete. The American automobile giant continues to move internal workloads to Google’s cloud and to deploy Salesforce throughout the workforce as it assembles next-generation EVs such as the F-150 Lightning pickup truck as well as hybrid and traditional combustion vehicles embedded with myriad IoT devices and sensors.

As testament of its digital bona fides, Ford has developed software platforms such as the Ford Pro API, which makes data from highly connected commercial vehicles available for both internal and partner applications, says Paul Dumas, senior director analyst for software engineering and API strategy at Gartner.

“Even more, using the logistical power of APIs to marshal and transport this data to customers, Ford Pro created a SaaS product that is a revenue stream for Ford Pro,” Dumas adds. “This SaaS product provides customers with data and analytics to help them maximize fleet performance and efficiency.”

For example, with every vehicle that has rolled off Ford Pro’s assembly line for the past three to five years “connected by default” with digital cockpits, data from these devices and sensors, available via Ford Pro’s APIs, can inform customers about how much capacity they need for fleet usage and for planning their long-term charging strategies, Musser says.

In this way, Ford’s API strategy, fueled by the cloud, has expanded Ford Pro’ value proposition for its larger commercial customer segment, making Ford a cloud software vendor in its own right.

“We have this combination like any large enterprise cloud software vendor,” says Musser, who has also served as Ford’s director of data and analytics for autonomous vehicles, and director of platform engineering for FordLabs. “We use the cloud software that we’re building. The embedded software in the vehicle goes all the way up the cloud.”

Technology at the center

Technology acquisitions and partnerships are another key enabler of Ford’s high-tech transformation.

In 2021, Ford acquired Silicon Valley startup Electriphi for its EV charging management and EV fleet monitoring software. The services, which are now part of Ford Pro’s services offering, are being enhanced with advanced charging and energy management services for the division’s commercial customers.

Ford Pro’s services arm also uses digital tools to provide automated reporting and maintenance of commercial pickups and vans to help customers optimize EV mileage and annual battery use. The ability of all SDVs — combustion-based, hybrid, and fully electric — to feed data up to the cloud provides developers with a plethora of unique opportunities to build algorithms that optimize, and in some cases, automate, vehicles.

On the security side, for instance, Ford announced a partnership in early 2022 with ADT called Canopy to develop a series of AI-powered connected security cameras and corresponding mobile application that guards the pickup and van fleets of commercial customers. This advanced security service saves commercial fleet operators in labor and provides more comprehensive security for the fleets at home or on the road, Musser says.

In addition, Ford has employed UiPath and Pega robotic process automation (RPA) software to automate business processes and, in conjunction with IoT devices, many subsystems within vehicles. For several years, Ford has been developing algorithms to upgrade vehicles with more sophisticated technologies and services such as order allocation optimizers and parts optimizer algorithms, as well as services such as Blue Cruise automated driving capabilities.

Ford’s forthcoming use of AI will further enhance those services, says Musser, noting supply chain optimization and customer demand matching among the key machine learning algorithms Ford is developing today.

AI everywhere

Ford also plans to leverage generative AI across the company, though that initiative remains in its infancy, Musser says.

To that end, the automaker has launched several pilots using natural-language AI in call centers and within the developer ranks. One pilot under way in the call center, for example, “enables agents to search faster through large amounts of documents and various data types to better classify identifying patterns in call center data segmentation, and sentiment analysis,” Musser says.

Ford’s Office 365 workforce and developers are also actively using Microsoft Copilot in production, he says, adding that, while human developers must still ensure accuracy and quality control of algorithm development, the Copilots have demonstrated value.

“Copilot tools help save you minutes in writing test-case boilerplate code with anywhere from 20% to 40% in assistance predicting what piece of code is necessary to write functions,” Musser says. “Trust me, we’ve seen productivity improvements in development.”

As AI continues to advance, it’s not clear what future technologies will be embedded in software-defined vehicles, but what is evident, Musser says, is that the innovations used to make internal processes at Ford more efficient and profitable will also be intricately embedded with the vehicles sold to customers.

After all, that’s long been considered a key recipe for high-tech company success.

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More From Forbes

Ford positions business segments to tackle digital transformation.

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Looking across the past twenty years of technology, I can confidently say that 2008 brought the most monumental shift because of the rise of the smartphone—which changed everything we do, from work and play to communication and productivity. Looking ahead, there are two rising technologies that I believe will have an impact as dramatic as the smartphone. These changes are the rise of artificial intelligence in all our digital interactions and the rise of the digital automobile.

The iPhone is given the most credit for the rise of the smartphone, and rightly so. But remember that the iPhone came into an existing phone market that had mature players including Blackberry, Nokia and Microsoft. Yet iPhone changed the entire landscape for mobile devices and quickly became the market leader—leadership we still see today.

While many differences make the comparison far from perfect, we are seeing a similar story play out in real time with the rise of software-defined vehicles. The interest in electric vehicles as an efficient alternative to internal combustion engines (ICEs), along with the increasing capabilities of autonomous driving (AD) and advanced driver assistance system (ADAS) technologies, are accelerating the digital transformation of the automotive market.

The benefits of these technologies include better energy efficiency, better safety, better in-cabin experiences and new use cases that have not yet been realized, like using a car as a home sentry when it’s parked in a house’s driveway. While automotive companies are already focusing on energy efficiency, safety and in-cabin experiences, the true digital transformation of vehicles will shift their value away from their physical capabilities and toward their digital offerings.

For mature car and truck makers like Ford, the external verdict has been, as CEO Jim Farley said during Ford's recent Capital Markets Day , "Too many legacy issues—Ford can't win." Sure, legacy carmakers like Ford are great at building solid, reliable vehicles, but they are totally lacking in answers when it comes to the digital side of things. Or at least that’s the widespread assumption.

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Ford, then, has reached a fight-or-flight moment where it needs to either step out of the way so digitally transforming technologies can take center stage, or it needs to become digitally transformed through innovation beyond its own efforts. Looking back at the comparison to the rise of the smartphone, is Ford going to be a Blackberry or Nokia of the market, where it once held a mature position until the market was changed by the rise of new technology, then fizzled out? Or is Ford going to embrace new technologies and be the change in the market, like Apple was with the iPhone?

Based on my view of the market and what I saw at Ford’s investor day, I want to give my analysis of how Ford is embracing these digital changes in spite of industry doubt. Let’s dive in.

Ford+, embracing digital change

Two years ago Ford announced Ford+, its new strategy to segment its business into Ford Blue, Model e and Ford Pro. Ford Blue is its portfolio of traditional ICE and hybrid-electric vehicles plus manufacturing capability, Model e is its portfolio of electric vehicles and includes responsibility for advanced technical development and Ford Pro is its portfolio of commercial vehicles and services.

I like Ford's strategy to differentiate its bread-and-butter vehicles like the Ford F-150, Ranger and Bronco from its next-generation electric vehicles. This segmentation gives Ford room to digitally transform its product portfolio without having to dramatically change its iconic gas-powered and hybrid lineup. Any successes that the company reaps from new technologies in the Model e segment can then be introduced and proved out in the Blue and Pro segments. Likewise, the decades of innovation, manufacturing and engineering that Ford has put into its traditional vehicles can be utilized in product development for Model e vehicles. It’s a smart strategy.

Positioning the Model e business segment is critical

As a tech industry analyst, I am most interested in the Model e segment and Ford's strategy to strengthen its digital transformation and differentiation while maintaining its traditional installed base.

The Model e segment is positioned as a lean startup within Ford, developing next-generation electric vehicle innovations and autonomous and ADAS technologies. The next-generation technologies that start in the Model e camp can then become differentiators for Ford in all three segments.

As an example of this, the Ford F-150 Lightning electric pickup is, in my opinion, an optimal mix of new technologies like the BlueCruise hands-free highway driving system with a familiar Ford look and feel. I think this is exactly what Ford was looking for: a new model differentiated from other EV trucks on the market that also retains what people know and love about the iconic F-150.

Interestingly, I think Ford introduced another compelling differentiator with the Mustang Mach-E and Lightning: the front trunk or "frunk." Without a gasoline engine under the hood, Ford was able to engineer a spacious front trunk—the largest one I have seen on the market. I hope Ford makes this a common feature for Ford EVs and includes it in the forthcoming all-electric Ford Explorer and other models.

Ford also mentioned Project T3, Ford's next electric truck. The mystery behind Project T3 makes it seem as though it will be a complete redesign of the Ford Lightning. However, Ford has communicated that the project will combine “a century of truck know-how with world-class electric vehicle, software and aerodynamics talent." The focus for Project T3 is not to make an electric truck that is completely unrecognizable for the Ford brand, but to initiate a platform shift toward a software-first design, even if it makes that aspect of the truck a big departure.

During its Capital Markets Day, Ford’s Chief Advanced Product Development & Technology Officer Doug Field – who moved over from Apple, and Tesla before that – spoke at length about how Ford is currently managing software development despite some limitations its facing and its ambitions for its next generation software platform.

According to Field, the current software platform is a challenge because it is “supplier-controlled’ based on a network of components that each need updating. This challenge means Ford engineers needs to work with suppliers to update their individual components in order to make wholesale changes to the vehicle. Despite that, this week, Ford announced it surpassed delivery of 13-million over-the-air software updates to both ICE and electric vehicles, noting about half of the updates enable customer facing improvements, such as improved BlueCruise capability.

Field also talked about the next-gen software platform, which will launch in 2025 starting with Ford’s second-gen EVs. On this platform, Ford will control the software – with a stated focus on developing customer features in the categories of autonomy, productivity, safety and security, and connectivity. And when that level of control happens, like Field stated in the keynote, “A new world of possibilities opens.”

I think a crucial part of executing this platform shift will be establishing a community of outside developers who create software for Ford vehicles. If Ford does not cultivate that to build on top of its software platform, I believe it could have a hard time following through with the digital transformation of its vehicles. In various areas of the tech world, I have seen many developer platforms succeed and many flop, and the difference is often in how well a company enables outsiders to build on its platform. Partnering with developers and building healthy relationships with outside software companies will be key if Ford wants to maximize software and services opportunities that will broaden sources of company revenue.

Here is where it is important to understand the difference between building the software-defined platform by itself and letting someone else build its software-defined vehicle platform for them. The benefits of Ford building its software defined vehicle platform is that Ford has total control over the platform. However, the benefits of partnering with companies that enable software-defined platforms is that it enables a wider range of developer integration. Nobody wants to develop for a platform that has a small reach. I have seen many platforms that have cultivated thriving developer ecosystems through developer enablement, and there have been many that I have seen flop.

Lastly, I think Ford Pro will continue to be an anchor for Ford. Commercial vehicles require reliability, functionality and practicality. In the Capital Markets Day presentation, Farley mentioned that great software and service experiences mean a lot to users, and that experience is a differentiating factor for customer loyalty.

Wrapping up

If we do make a direct comparison between the rise of the smartphone and the rise of the software-defined vehicle, I think many companies want to be the Apple in that story. However, I don’t want to see the Apple of the software-defined vehicle; I want to see the Ford of the software-defined vehicle.

The choices that Ford makes in the next couple of years are going to have a huge impact on its success for the next couple of decades. I believe Ford is heading in the right direction, but it cannot execute the digital transformation alone. The Ford+ plan puts Ford in a great position to embrace new technologies without compromising its breadwinners; in particular, the company has many exciting new offerings coming from its startup-like Model e team. I appreciate that Ford has recognized that software will be a defining factor in its future. It just can’t do it alone.

Note: Moor Insights & Strategy co-op Jacob Freyman contributed to this article.

Moor Insights & Strategy provides or has provided paid services to technology companies like all research and tech industry analyst firms. These services include research, analysis, advising, consulting, benchmarking, acquisition matchmaking, and video and speaking sponsorships. The company has had or currently has paid business relationships with 8×8, Accenture, A10 Networks, Advanced Micro Devices, Amazon, Amazon Web Services, Ambient Scientific, Ampere Computing, Anuta Networks, Applied Brain Research, Applied Micro, Apstra, Arm, Aruba Networks (now HPE), Atom Computing, AT&T, Aura, Automation Anywhere, AWS, A-10 Strategies, Bitfusion, Blaize, Box, Broadcom, C3.AI, Calix, Cadence Systems, Campfire, Cisco Systems, Clear Software, Cloudera, Clumio, Cohesity, Cognitive Systems, CompuCom, Cradlepoint, CyberArk, Dell, Dell EMC, Dell Technologies, Diablo Technologies, Dialogue Group, Digital Optics, Dreamium Labs, D-Wave, Echelon, Ericsson, Extreme Networks, Five9, Flex, Foundries.io, Foxconn, Frame (now VMware), Fujitsu, Gen Z Consortium, Glue Networks, GlobalFoundries, Revolve (now Google), Google Cloud, Graphcore, Groq, Hiregenics, Hotwire Global, HP Inc., Hewlett Packard Enterprise, Honeywell, Huawei Technologies, HYCU, IBM, Infinidat, Infoblox, Infosys, Inseego, IonQ, IonVR, Inseego, Infosys, Infiot, Intel, Interdigital, Jabil Circuit, Juniper Networks, Keysight, Konica Minolta, Lattice Semiconductor, Lenovo, Linux Foundation, Lightbits Labs, LogicMonitor, LoRa Alliance, Luminar, MapBox, Marvell Technology, Mavenir, Marseille Inc, Mayfair Equity, Meraki (Cisco), Merck KGaA, Mesophere, Micron Technology, Microsoft, MiTEL, Mojo Networks, MongoDB, Multefire Alliance, National Instruments, Neat, NetApp, Nightwatch, NOKIA, Nortek, Novumind, NVIDIA, Nutanix, Nuvia (now Qualcomm), NXP, onsemi, ONUG, OpenStack Foundation, Oracle, Palo Alto Networks, Panasas, Peraso, Pexip, Pixelworks, Plume Design, PlusAI, Poly (formerly Plantronics), Portworx, Pure Storage, Qualcomm, Quantinuum, Rackspace, Rambus, Rayvolt E-Bikes, Red Hat, Renesas, Residio, Samsung Electronics, Samsung Semi, SAP, SAS, Scale Computing, Schneider Electric, SiFive, Silver Peak (now Aruba-HPE), SkyWorks, SONY Optical Storage, Splunk, Springpath (now Cisco), Spirent, Splunk, Sprint (now T-Mobile), Stratus Technologies, Symantec, Synaptics, Syniverse, Synopsys, Tanium, Telesign,TE Connectivity, TensTorrent, Tobii Technology, Teradata,T-Mobile, Treasure Data, Twitter, Unity Technologies, UiPath, Verizon Communications, VAST Data, Ventana Micro Systems, Vidyo, VMware, Wave Computing, Wellsmith, Xilinx, Zayo, Zebra, Zededa, Zendesk, Zoho, Zoom, and Zscaler. Moor Insights & Strategy founder, CEO, and Chief Analyst Patrick Moorhead is an investor in dMY Technology Group Inc. VI, Fivestone Partners, Frore Systems, Groq, MemryX, Movandi, and Ventana Micro., MemryX, Movandi, and Ventana Micro.

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Connected Manufacturing Forum 2024

June 25 - 26, 2024

Westin Buckhead Atlanta, GA

Ford Motor Enters Digital Era With Its Advanced Manufacturing Center

(Image source: Ford Motor Company)

Industrial Evolution

From the initial development of machinery and processes, through to mass production, then the integration of computers and automation, the first three industrial revolutions pushed the boundaries of our manufacturing capabilities to new levels.

The fourth industrial revolution or Industry 4.0 is currently underway, and builds on those technological leaps. Through cyber-physical systems, the Internet of Things (IoT), cloud computing, cognitive computing, and other technologies, Industry 4.0 has been connecting machines to one another with digitally enabled technology, to create a more seamless manufacturing environment.

Industry 4.0 represents a major shift in outlook and operations for all businesses involved in the manufacture of products, and its technology is being adopted by organizations across the globe. In the tradition of its founder whose visionary ambition was to “put the world on wheels,” teFord Motor Company has embraced this new reality, and created a hub for innovation in its brand-new Advanced Manufacturing Center (AMC).

Reinventing The Assembly Line For A Connected Future

In an effort to accelerate manufacturing innovation, Ford Motor Company has brought advanced engineering expertise and technology together in a single location - an incubator for prototypes, before tested innovations can be rolled out to auto plants across the globe. The 135,000-square-foot facility was opened in the summer of 2018.

Ford's new facility is located in the manufacturing heartland of Redford, Michigan, and represents an investment of around $45 million. The Advanced Manufacturing Center has a workforce bolstered by over 100 manufacturing technology experts, and is home to a host of specialized equipment.

Ford was responsible for the innovation that heralded the Second Industrial Revolution: the creation of the first moving assembly line - a development which changed forever the way that vehicles would be mass-produced. With its new Advanced Manufacturing Center, the company looks to extend its tradition of innovation even further.

As Joe Hinrichs, Ford's President of Global Operations puts it: "Today, we are reinventing tomorrow's assembly line - tapping technologies once only dreamed of on the big screen - to increase our manufacturing efficiency and quality."

Enhancing Production Through Additive Manufacturing

Wasteful traditional methods of manufacture rely on cutting components out of native materials (steel, wood, etc.) - then throwing away the excess. This takes a toll not only on the environment, but also on the enterprise, as much of this waste material can't be reclaimed or reprocessed, and translates into lost revenue.

Additive manufacturing eliminates this wastage by creating components out of layers of material, which are fused together to form a cohesive whole. Precise amounts of material may be used in making each layer, and these layers - which often have extremely intricate and complex shapes - can be accurately designed using computers.

3D printing is the most widely recognized and accessible form of additive manufacturing - and Ford Motor Company has been a trend-setter in this field, since its acquisition of one of the earliest 3D printers back in 1988.

Though the technology was initially focused on the techniques of "rapid prototyping", additive manufacture and 3D printing are now being used for more than just the simple production of concept models. With the development of new materials and processes, additive manufacturing is emerging as a valuable tool to assist in production applications, and to act in support of mainstream production.

Ford currently has almost 100 additive manufacturing machines spread around 90 global locations. Of these, 23 are located at the Advanced Manufacturing Center.

The materials used in 3D printing tens of thousands of parts include, steel, sand, carbon, and nylon powder. Most of these components are created for products which are currently at the prototype stage. It's expected that they will play a key role in the development of new automobile technology - and to this end, Ford has partnered with 10 3D manufacturing companies to maximize the gains of its advanced manufacturing initiative.

Harold Sears, the Technical Leader of Additive Manufacturing Technologies at Ford, identifies two key areas where 3D printing is making an impact on the company's manufacturing operations: The first is in supporting current production processes with more efficient tooling, jigs, and fixtures. And the second lies in actually using these improved processes in the manufacturing space.

Product development processes have accelerated, due to the ability of designers to make 3D printed models of several different designs, which can then be tested by engineers simultaneously. This saves the company money in not having to make several iterations of the same design, and greatly reduces a component's time to market.

The practical benefits of additive manufacturing are already being felt. For instance, the new Shelby Mustang GT500 has 3D-printed brake-bracket parts - an innovation which has enabled the super-performance muscle car to claim the title of the fastest street-enabled Ford Mustang ever. Unveiled in January at the North American International Auto Show, the 2019 Shelby GT500 uses 420mm (16.8 inch) two-piece brake rotors - the largest of any American sports coupe.

(Image source: AUTOCAR UK )

Additive fabrication methods have also contributed to the design of the 2019 F-150 Raptor, a pickup truck that features an instrument-panel spotlight-switch blanking plug which was designed and 3D printed specifically for the Chinese market.

(Image source:  Ford Motor Company )

Besides motor parts, in-house 3D printing technology is also used to generate production line tools for engineers and assembly line employees. At an individual level, this makes it possible to design and fabricate tools ergonomically, to match the specific physical requirements of each worker such as hand size, or grip strength.

In production, it's possible to design and print tools which are tailored specifically for certain projects. For example, at Ford’s Michigan Assembly Plant five different 3D printed tools are used in constructing the Ranger pickup. The custom tools fabricated prior to the launch of the Ranger removed weeks from an already tight production schedule - and ensured that quality was consistent and inherent in every vehicle that rolled off the assembly line.

On the production line floor, workers can collaborate with advanced manufacturing experts to identify ways in which additive manufacturing techniques can save the company time and money. This includes the design, specification, and printing of 3D replacement parts that can keep production lines running, rather than having to wait days or even weeks for parts to be ordered or fabricated elsewhere.

Ford's collaboration with 3D manufacturing partners has allowed the company's experts to develop a range of applications with different materials. One of those currently under development has the potential to save the company more than $2 million. It's anticipated that, as 3D printing becomes more affordable, 3D parts will become more widespread - throughout the enterprise, and in the industry at large.

This growth in additive technologies is expected to fuel a demand for new staff recruitment and training methods, to enable organizations to source the skills necessary for 3D printing operations and other Industry 4.0 enabled tasks. Ford has begun addressing this need by training employees to use Design for Additive Manufacturing (DfAM) methodologies. These methods require trainees to take a more wide-ranging view of the design process - one that encompasses the production process, software, and hardware. Taking Design To New Planes With Augmented And Virtual Reality

Industry 4.0 technology also has an impact on the conceptual phase of automobile production, and the Advanced Manufacturing Center uses augmented reality (AR) and virtual reality (VR) technologies at the design stage. The digital environments enable Ford's engineers to create virtual production lines, run test case scenarios, identify potential hazards, and fine-tune the manufacturing process long before the first vehicle is ever assembled.

Ford experts use specialized gaming equipment to configure virtual reality production lines with the real-world potential to make millions of vehicles - all from within the Advanced Manufacturing Center. Augmented reality overlays and virtual reality simulations allow them to identify potentially hazardous maneuvers and fine tune production workflows, long before the assembly lines are constructed.

With internet connectivity, the design process can be made both collaborative and global. Augmented and virtual reality spaces accessed via the internet empower Ford manufacturing teams around the world to collaborate on training or assembly techniques, simultaneously sharing the same virtual experience.

These technologies compress production timetables, enable technicians to unlock solutions in real time, and allow Ford to optimize its manufacturing workstations for each location globally.

Humans And Machines, Working Together In Harmony

Robots have been part of the production line ecosystem for some years now, and in the Industry 4.0 era Ford has developed a particular interest in collaborative robots - or cobots, as they are familiarly known. These machines are designed to operate alongside human workers, and the company has installed over 100 of them across 24 of its facilities.

Having a smaller footprint and often a greater degree of mobility than robots of previous generations, cobots are designed for safety, removing the need to enclose them in expensive and hard to access protective cages. They can also operate in conditions that would be hazardous to humans - and work for longer time periods. For example at Ford's Livonia Transmission Plant, a cobot is used to perform ergonomic tasks which health and safety concerns only allow a human worker to attempt for one hour at a time.

Specialists at the Advanced Manufacturing Center are investigating the use of cobots to identify any potential challenges before they are deployed in factories around the world. Monitoring the performance of cobots at the Advanced Manufacturing Center allows the company to identify and address potential production issues before the automated machines are installed in Ford's other facilities.

One of the biggest issues that the use of robots has traditionally raised is its impact on human employment. It's been estimated that robots may hold nearly 40% of all American jobs by the early 2030s. This has become particularly relevant as, according to research by Loup Ventures 34% of the industrial robots sold by 2025 will be collaborative - and the industrial robotics market is expected to grow by 175% over the next decade. The primary focus of that growth is expected to be on collaborative, assistive platforms.

(Image source: Loup Ventures )

The automotive industry is set to lead this trend, with adoption being driven by advancements in computer vision, artificial intelligence (AI), and motion sensing capabilities. In future, it's believed that the rise in low-cost collaborative robotics technologies will increase access to automation technology across a range of new applications, which will drive adoption across a new set of verticals.

Technology aside, robots are viewed as very much a complementary part of Ford's manufacturing ecosystem, rather than any form of replacement for its human workforce. Collaborative robots need people to work alongside the machinery - and they also need human workers dedicated to their maintenance, development, and operations.

In the words of Joe Hinrichs: “While we are increasing our use of collaborative robots, we strongly believe there is a need for both people and robots. People are better at doing certain jobs, while robots are able to perform certain tasks, including those that are ergonomically taxing for people.”

Humans And Machines, Moving Forward

The interaction between humans and machines that's being promoted by the Ford Motor Company extends beyond the factory floor to the design ethic and functionality of its new breed of automobiles. In addition to its 3D printed components, the F-150 pickup truck is serving as a flagship model for the use of Industry 4.0 digital technologies in enhancing the driving experience.

Ford's Global Director of Interaction & Ergonomics, Parrish Hanna heads the team that's steering Ford and the F-150 toward the cutting edge of human machine interaction (HMI). He oversees the work of over130 researchers, engineers, and designers who are discovering new ways to incorporate digital technology into the F-150 - from instrument panels through to lighting, acoustic design, in-car entertainment systems, and other features.

To understand and establish that the technologies being placed in the F-150 are useful and desirable, the team employs specialists in human culture who ride along in the back seat as unbiased observers, looking for patterns, interactions, and new behaviors surrounding the vehicle technology. New technologies are tested at "hotspots" such as truck rallies and auto shows, where researchers can get grassroots opinions from passionate truck people about what works, and what doesn’t.

The feedback loop involves analysis of the resulting customer data, and the presentation of those findings in the form of revised concepts which are floated to actual truck users to assess their reactions.

This methodology has led to the development of My View, an on-board configuration system which allows F-150 drivers to customize the content and order of the truck’s driver cockpit screens – and to access them with the touch of finger. Personalization options like this are part of a fresh and far-reaching approach to human machine interaction and technology integration, which Hanna describes as: "A much more holistic system, including new disciplines and other groups within Ford, such as advance research, design and marketing.”

The (Connected) Road Ahead

With its commitment to cutting edge technologies like collaborative robots, 3D printing, augmented and virtual reality, Ford has firmly established itself as an important innovator in the field of connective automotive manufacturing - both now, and into the future.

In the Advanced Manufacturing Center, the Ford Motor Company has created a formidable testing ground where the latest Industry 4.0 technology can be put through its paces, before it rolls out to global factories.

Ford Motor Company's Chief Engineer for Advanced Manufacturing, Michael Mikula, will be speaking at Connected Manufacturing Forum 2019 , which will be held in July at the Hilton Austin, Austin, TX.

Download this FULL CASE STUDY for free as a PDF

Ford and Google to Accelerate Auto Innovation, Reinvent Connected Vehicle Experience

Companies come together in first-of-its-kind partnership to create unique services and capabilities for Ford and Lincoln customers, and to accelerate Ford's transformation plan

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Feb 01, 2021, 11:30 ET

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DEARBORN, Mich. and SUNNYVALE, Calif. , Feb. 1, 2021 /PRNewswire/ -- Ford and Google today announced a unique strategic partnership to accelerate Ford's transformation and reinvent the connected vehicle experience. Ford has also named Google Cloud its preferred cloud provider to leverage Google's world-class expertise in data, artificial intelligence (AI), and machine learning (ML). As part of this new, six-year partnership—and beginning in 2023—millions of future Ford and Lincoln vehicles at all price points will be powered by Android, with Google apps and services built-in.

To drive ongoing innovation, Ford and Google are establishing a new collaborative group, Team Upshift. Leveraging the talent and assets of both companies, Team Upshift will push the boundaries of Ford's transformation, unlock personalized consumer experiences, and drive disruptive, data-driven opportunities. This may include projects ranging from developing new retail experiences when buying a vehicle, creating new ownership offers based on data, and more.

"As Ford continues the most profound transformation in our history with electrification, connectivity and self-driving, Google and Ford coming together establishes an innovation powerhouse truly able to deliver a superior experience for our customers and modernize our business," said Jim Farley , President and CEO of Ford.

"From the first moving assembly line to the latest driver-assist technology, Ford has set the pace of innovation for the automotive industry for nearly 120 years," said Sundar Pichai , CEO of Google and Alphabet. "We're proud to partner to apply the best of Google's AI, data analytics, compute and cloud platforms to help transform Ford's business and build automotive technologies that keep people safe and connected on the road."

As its preferred cloud provider and starting later this year, Google will help Ford leverage Google Cloud's  AI, ML and data analytics technologies to accelerate the automaker's digital transformation, modernize operations, and power connected vehicle technologies with Google's trusted, secure, and reliable cloud. With Google Cloud, Ford plans to: 

• Further improve customer experiences for customers with differentiated technology and personalized services;
• Accelerate modernization of product development, manufacturing and supply chain management, including exploration of using vision AI for manufacturing employee training and even more reliable plant equipment performance;
• Fast track the implementation of data-driven business models resulting in customers receiving real-time notices such as maintenance requests or trade-in alerts.

Ford and Google have a shared vision to bring enjoyable, safer and more efficient connected vehicle experiences built to minimize driver distraction and keep customers at the forefront of technology with over-the-air updates. Beginning in 2023, Ford and Lincoln customers globally will start to benefit from unique digital experiences built on top of the Android operating system and with Google apps and services built-in, which include world-class map and voice technology:

• With Google Assistant, drivers can keep their eyes on the road and hands on the wheel, by getting things done with just their voice.
• With Google Maps as the vehicles' primary navigation, drivers can reach their destination faster with information on real-time traffic, automatic rerouting, lane guidance and more.
• With Google Play, drivers will have access to their favorite apps for listening to music, podcasts, audiobooks and more. These apps are optimized and integrated for in-vehicle use.

Android in the car also enables Ford and third-party developers to build apps that provide a constantly improving and ever-more-personalized ownership experience.

"We are obsessed with creating must-have, distinctively Ford products and services," said Farley. "This integration will unleash our teams to innovate for Ford and Lincoln customers while seamlessly providing access to Google's world-class apps and services."

About Ford Motor Company Ford Motor Company (NYSE: F ) is a global company based in Dearborn, Michigan . The company designs, manufactures, markets and services a full line of Ford cars, trucks, SUVs, electrified vehicles and Lincoln luxury vehicles, provides financial services through Ford Motor Credit Company and is pursuing leadership positions in electrification; mobility solutions, including self-driving services; and connected services.  Ford employs approximately 187,000 people worldwide. For more information regarding Ford, its products and Ford Motor Credit Company, please visit corporate.ford.com.

About Google Cloud Google Cloud provides organizations with leading infrastructure, platform capabilities and industry solutions. We deliver enterprise-grade cloud solutions that leverage Google's cutting-edge technology to help companies operate more efficiently and adapt to changing needs, giving customers a foundation for the future. Customers in more than 150 countries turn to Google Cloud as their trusted partner to solve their most critical business problems.

About Google Google's mission is to organize the world's information and make it universally accessible and useful. Through products and platforms like Search, Maps, Gmail, Android, Google Play, Chrome and YouTube, Google plays a meaningful role in the daily lives of billions of people and has become one of the most widely-known companies in the world. Google is a subsidiary of Alphabet Inc.

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Shifting Gears: How Ford’s digital-first approach put customers in the driving seat during lockdown

Something that really resonated with me from this year’s Adobe Summit, was the number of customers sharing how the COVID-19 pandemic had accelerated their digital transformation plans faster than they ever thought possible. When speed was of the essence, leading car manufacturer, Ford of Europe, was one of the companies leading the way.au

The pandemic – and subsequent lockdowns – left the company needing to close dealerships and cancel automotive shows where it would traditionally have launched and sold its vast range of vehicles. But, at the same time, it started to see more demand for vehicle ownership – especially from younger audiences – who realised a car would be the most convenient and safest way to travel during the pandemic. Claire Hepworth, Head of Customer Engagement, Ford, described the situation to us at Adobe Summit: “ The pandemic caused disruption in the sense of how it closed the physical side of the industry down, but also in terms of how people got from A to B. Many people realised how much they wanted a car when they could not, or did not want to, take public transport. During the pandemic, a car was like a safe bubble. ”

Ford’s answer to its greatest challenge was a bold one; to expedite the digital transformation it had kick-started a couple of years ago and create a truly digital-first approach to vehicle launches, sales and after-care, with customers’ needs right at the centre.

Focusing on a completely online vehicle launch

Ford had already been exploring e-commerce as part of its digital transformation, but the true test came with the launch of its first all-electric SUV – the Mustang Mach-E – which would now be completely online.

“Five years ago, we couldn’t have predicted Covid, but we could see a need for a more omni-channel experience. We knew two-thirds of consumers would be open to buying a vehicle online, and so focused on building out our ecommerce offering. When the pandemic hit, it became a central part of our plan, integral to how we kept selling.”

Everything from registering interest, to purchasing and vehicle customisation was carried out online. With test drives on hiatus, customers were invited to virtual showrooms and provided with in-depth content around the vehicle’s functions and features, to replicate the experience they would normally have received at a dealership.

But it wasn’t just about purchasing cars online. Ford started offering a true ‘online marketplace’, where customers could buy any kind of goods, products or services from its e-commerce site, including service plans and car accessories as well as the vehicles themselves.

Accelerating communications with customers

Ford’s ambition is to treat customers like family, and by moving to a digital-first model it was able to do just that. For the business, this means being able to predict the needs of its customers and their vehicles, according to where the customer is in the purchasing or ownership cycle, and personalising outreach accordingly. Adobe Analytics measures and informs its ‘next-best action’ communication, while Adobe Campaign and Adobe Target deliver timely, personalised communications, based on customers’ and their vehicle’s needs.

“Customers want hyper-personalised experiences when buying a car. They want to know that you understand them, their vehicle, and their future needs. Adobe Experience Cloud lets us truly understand our customers and tailor communications to where they are in the sales-cycle. So whether they’ve simply registered interest in a new vehicle, or they’ve been a customer for a while and their car is due a service, they’ll receive personalised communication from us on just that – and at exactly the right time.”

The road ahead.

As it moves forward, Ford wants to add AI and machine learning to its customer experience. Critical to achieving this will be the commitment and progress the business has already made to breaking down data siloes and bringing all teams – from pre-sales to after-sales, marketing, maintenance customer service – together to make the most effective use of its data and create a single view of the customer. In the future, AI and machine learning coupled with prognostic data will be used to predict when a vehicle is likely to need servicing or maintenance ahead of time. Through dynamic 1:1 communication, Ford plans to pro-actively advise customers to bring their vehicles in for checks, before a problem manifests itself.

Thanks to it its investment in digital, Ford is now in a position to run a truly omni-channel experience for customers. The company is going to take a hybrid-approach that enables customers to engage with the brand both digitally and physically now that dealerships have reopened – based on their preference. As Hepworth says: “ We’re going to keep accelerating the online innovation as we move forward, but want a ‘best of both worlds’ approach, which acknowledges that customers will sometimes want to do things online, but will at other times want to visit a dealership. We’re on-boarding dealers to the system and making sure they can use it to communicate with customers too – it will keep the personal element there and show people Ford is one connected company they have a relationship with, no matter how they choose to interact with us ”.

We’re clearly entering a new era in customer experience, one that’s been expedited by the pandemic. Ford is a great example of how the automotive industry has evolved accordingly. With more consumers open to purchasing big-ticket items like cars entirely online, these kinds of experiences will only become more commonplace, even as pandemic-related restrictions start to lift. And I, for one, am excited to see what comes next.

https://blog.adobe.com/en/publish/2021/05/20/isobar-helps-mitsubishi-motors-australia-drive-new-car-buying-journey#gs.9uba3q

https://blog.adobe.com/en/publish/2021/05/07/bon-voyage-embarking-on-journeys-that-guests-love#gs.9ubaex

https://blog.adobe.com/en/publish/2021/05/06/adobe-helps-cooperative-bank-grow-customer-engagement-with-in-app-messaging#gs.9uba9j

Digital Innovation and Transformation

Mba student perspectives.

• Assignments
• Assignment: Competing with Data

Ford’s Bets on Big Data

This post examines Ford’s bets on utilizing extensive data and analytics as an essential asset to their business. It covers 3 data examples, the value captured, and potential challenges.

In the automotive industry, Ford is a well-known player, being one of the first to bring the assembly line to vehicle production. As technology constantly changes, incumbent players must adapt to maintain their advantage. Consequently, Ford has taken recent bets on big data investments.

In terms of maintenance, Ford utilizes data as a measure to improve downtime internally. In 2019, they developed a “Miniterms 4.0” system that notifies factory employees when manufacturing functionality reduces (2). Value capture occurs from reduced production delays as a result, leading to improved service levels and satisfaction; in the first year, the project delivered more than $1M in savings (4). As new car model launches occur at a regular cadence, this launch process and cycle continues to renew the usage of the novel predictive maintenance tool. Currently, this tool has been deployed for 15,000 machines in Ford’s Valencia plant (4). However, future challenges may arise from scaling to other sites given the complexity of vehicle parts production and the global nature of the business, with 10+ different country locations of assembly plants alone (5).

Externally, for the customer, Ford has pushed for R&D efforts with other organizations to understand how to utilize vehicle connected sensor data to detect failures before they manifest (3). This process can enable the company to proactively get parts in advance to reduce service time (3). Not only does this improve and optimize maintenance scheduling, but it also can help reduce time loss as a customer waits for their cars in service (3). Studies have shown upside can be $7M due to the downtime saved (3). The challenge is its usage might be more applicable for uncommon parts that may not typically be in stock; if the part is in stock, the time savings is not realized. The accuracy of predicting which parts may fail in the near-term may be questioned, as the study has shown a false positive rate of 2.5% with this model (3). Thus, costs can be incurred to have parts ordered by a repair shop if ultimately it isn’t needed.

Another bet Ford has taken is with its partnerships: in 2021, Ford announced that Google will provide services on AI, data analytics, and the cloud platforms for Ford; at the same time, Ford customers will be able to access Google Assistant voice technology, Google maps, and Google Play services within the car (1). With Google’s analytics and cloud services, Ford also plans to improve efficiency in vehicle development, supply chain, and manufacturing operations (6). Improved supply chain and operations will enable the company to continue to meet demand and production targets. One implemented use case has been an application that uses Google Cloud technology to monitor material inputs and process parameters for a vehicle production step (2). Part images are taken during the production process that are hosted on Google Cloud, which are then analyzed by engineers to ensure quality (2). The implications of this is improved reliability of the car as out-of-spec parts are better caught before moving further downstream.

Further value capture from the Google partnership comes from the personalization ability in-car (2) which can better meet customer needs and generate positive brand equity. Driver data collection can also enable the company to create improved safety systems (e.g. blind spot, emergency braking, lane assist) (2). Additional value capture can occur from data monetization – through user driving data, Ford can generate another revenue stream by selling data to adjacent companies like those in the insurance space (6). Challenges may stem from data privacy concerns if driving behavior data is sold to other companies, but given the rise of insurance programs that currently exist today based on usage, this seems to be less of a concern.

Pathways to a Just Digital Future

As an incumbent, Ford can be perceived as being a slow mover due to their scale and matrix nature. One concern is how their competition has responded, and if Ford can keep up. A core question in mind is: are big data investments now just table stakes in the automotive industry? In the examples shown above, big data has served as a means to meet service levels and reduce operational costs. Especially post-pandemic, robust operations has an even greater importance as supply chains were stress-tested. Ford’s shift towards investing in data and analytics may be a move to keep up with its peers, but challenges the in the near-term can continue with the rise of disruptive technologies by smaller, more nimble peers (e.g. autonomous technology).

• https://www.freep.com/story/money/cars/ford/2021/02/01/ford-google-android-real-time-traffic-technology/4336624001/
• https://www.thomasnet.com/insights/how-big-data-is-steering-ford-motor/
• https://kortical.com/case-studies/ford-predicting-failures-ai-example
• https://media.ford.com/content/fordmedia/feu/en/news/2020/11/19/ford-uses-big-data-to-ensure-body-line-keeps-rolling–saves-more.html
• https://corporate.ford.com/operations/locations/global-plants.html
• https://www.aidataanalytics.network/data-monetization/articles/fords-data-driven-roadmap-towards-future-mobility
• Attribution for header photo: https://www.vecteezy.com/free-photos Free Stock photos by Vecteezy

Student comments on Ford’s Bets on Big Data

This is very interesting – also cool post because my own submission is about using telematics in auto insurance, and I didn’t know companies like Ford were selling data to insurance companies!

In trying to think through whether there would be demand from insurance companies from such data, I think it would probably depend on whether they can get the data from elsewhere. For example, many telematics companies (e.g., https://www.cmtelematics.com/what-makes-us-different/ ) are now linking up to apps on driver’s phones for comprehensive geolocation, acceleration, velocity, etc. data — where do connected vehicles come into play, and what is the additional value of the vehicle data to an insurance provider? Would love to discuss!

Cool stuff! I’m curious, as we shift to autonomous and electric vehicles, the complexity of the car itself goes down substantially with a lot fewer parts and more emphasis on the interior of the car and the passenger experience. Ford’s partnership with Google makes sense as they want to understand customer needs while within the vehicle but not necessarily driving (more like what a passenger would do) which could include working, shopping, entertainment, browsing social media, etc. Do you think that partnering with a company as opposed to doing it internally gives up most of the value created in this shift and that Ford could be stuck with only the low margin structure of the cars going forward while tech companies like Google get the Lion’s share?

I always have deep concerns when two entrenched incumbents (in this case Google and Ford) come together and believe that “if we put our two existing technologies together, everything will go great!”, specifically in the case of in-car optimizations. I think one of the reasons why Tesla has been so successful with its vehicles is because it has aggressively vertically integrated its hardware and software stack, so that the end product is genuinely reflective of a single design vision. In Ford’s case, because Ford already outsources many of its subcomponents, its vehicles are essentially a collection of technical pieces manufactured by multiple OEMs. Coordinating those pieces took decades, and adding Google technology in a way that requires it to interact seamless with all of the existing pieces is a tall task, and not one that can be easily undertaken by a company with limited history in software integration (Ford). While I hope this venture succeeds (since competition benefits the end consumer), I am skeptical if Ford can truly make their vehicles play nice with Google, or if this will end up feeling like tacked-on software that doesn’t deliver on meaningful customer value.

Thank you for sharing these insights. I find the use of data to analyze part failures very interesting. I wonder if this same data could be used not only for part maintenance, but also for product development. For instance, Ford is making a push into battery electric vehicles (BEV). One of the main and most challenging components of a BEV is the battery back. It’ll be interesting how Ford utilizes their data analysis for battery efficiency and range.

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How ford embraced digital transformation (and 4 reasons why b2b businesses should do the same).

• by Charles Gaudet

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Companies that have realized the importance of digital transformation are thriving in the B2B space. Here are some tips for your company to follow suit.

In general, B2B businesses haven’t been as quick to go digital as B2C companies. That isn’t true for everyone, though… Take Ford, for instance. They’ve become a great example of B2B digital transformation. 

And they didn’t start small… 

The automotive giant has one of its biggest factories in Cologne, Germany. The factory makes more than a million transmissions a year. They supply Mazda and Volvo in addition to Ford, and it’s not just about volume… The factory creates many types of custom variations as well. 

With this huge, complex system, it’s no surprise that they often faced delays when production processes failed to run smoothly.

So, Ford decided to do something about it. 

They used digital transformation to change that factory into an innovation hub. To deal with the problems, Ford implemented the Material Flows Wireless Parts system. This allows them to track critical parts and make sure that the right quantities of those parts get to the right place at the right time. 

They started with 220 radio-frequency identification (RFID) tags. Each one corresponds to a unique part number. Then Ford set up portable PCs at critical stages in the assembly and production lines and installed a special wireless infrastructure as part of this B2B digital transformation.

Now when a worker needs a particular part, they hit a WhereCall materials replenishment button. This causes a “Parts Needed” message to show up in the warehouse. Suppliers also get a notification that assists in tracking inventory.

All of this combines to make sure everything works smoothly. On the assembly line, workers stay put and call for more parts as necessary. The result is seamless production at the factory, all built on modern digital technology integrated into their existing manufacturing process.

They’re now also using artificial intelligence to simplify the process even further. Once up and running, the AI will use modeling techniques to eliminate the WhereCall step altogether. 

The importance of digital transformation extends well beyond automated production processes, though… Below are several reasons for taking advantage of B2B digital transformation in your own business.

Better Customer Experience

It’s safe to say that the B2B customer experience is more complicated than B2C. This is because you have to approach clients on two levels:

• Organizational

Both have a say in the decision to continue or stop buying from a particular provider, and like B2C, customer experience is usually the defining factor. 

The best customer experience is one that takes friction out of the equation. It speeds up production and delivery, and it simplifies the pipeline as much as possible. This applies to all client experiences, from first engagement through to post-sale.

With digital transformation, the B2B client experience isn’t just about selling. You may have to employ complex transactional processes, but that complexity shouldn’t inconvenience your customers. 

A good example of this is the financial technology company Kabbage . The company created an online loan application system that only takes minutes to approve. The process is completely web-based and removes all friction. Prior to that, you’d need to have a few sit-downs at the bank and potentially wait for 20 days or more.

Meeting Customer Expectations

There’s been a lot of hype about the importance of digital transformation. It’s a technological leap that blurs the line between services and products. It changes how you run your business, regardless of organizational level.

But how does it help you meet and exceed customer expectations?

Customers are already accustomed to a seamless online shopping experience. They expect the same when doing business.

This only means that you have to dream big and adopt digital transformation. In fact, it’s dangerous not to do so because the competition is always quick to step into your place.

Having complex B2B systems shouldn’t be a limitation to innovation.

A digital future improves efficiency and customer expectations. With digital systems, you can increase customer retention and profits. You can also improve turnaround times for products and services.

Offering Data-Powered Solutions

B2B digital transformation is all about leveraging data. This means you’re able to generate greater value for your business and customers. You can secure your competitive advantage by becoming faster, more productive, and more adaptable.

A big part of these improvements comes from increased efficiency. In the past, the sales department covered customer relations and marketing covered messaging. That’s not a good setup for the digital age.

Data-powered solutions build links between departments. Because of this, operations become more cohesive and free of bottlenecks. This can be attributed (at least in part) to better communication and access to data.

Connecting the Online and Offline Worlds

With digital transformation, buyers can interact with your company through different channels, such as online web stores, field sales, and more.

…And here’s another big benefit about digital: these buyers tend to spend more than those who only focus on one channel.

So take advantage of this opportunity!

Create an ecosystem with great cross-channel integration. On average, a B2B customer uses six channels in their decision-making process. If you have a disjointed sales model, it becomes more difficult for them to move through your funnel.

It can also be hard for customers to move from online to offline interactions. Of course, poor cross-channel integration contributes to this.

To that end, mobile technologies play a significant role in B2B digital transformation. Most buyers use a mobile device at least once during a purchasing journey.

Your job is to make the switch from mobile to in-person seamless.

Welcome the Digital Future

Digital transformation is relevant across industries. You can see that with companies as diverse as Ford and Kabbage. If you dig a little deeper, you’ll find plenty of smaller B2B companies that have done well too.

Digitization brings with it automation, speed, and agility. You can remove redundant steps and improve the client lifecycle. This means you can attract clients faster and keep them for longer. 

…And all this adds up to higher profitability for your company.

To learn more, apply for free business coaching lessons at predictableprofits.com

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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.

Brands were looking for new ways to drive their marketing and sales forward. In the midst of these unprecedented challenges, Mitsubishi Poland  turned to Google Insights and discovered that consumer needs were changing in real-time so they built an engaging marketing campaign with powerful emotional messaging - delivered at exactly the right time - to better connect with prospective customers.

And 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 organisational 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 modernisation is required to be a sustainable company,” explains Farley. A critical factor to modernising has been disrupting its organisational 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 organisation 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 personalised 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.

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Ford bets on Google Cloud for its digital transformation

Google and Ford today announced a new partnership around bringing Android Automotive to Ford’s Ford and Lincoln-branded cars, starting in 2023. But at the same time, the two companies also announced that Ford has chosen Google Cloud as its preferred cloud provider.

“With Google Cloud, Ford will digitally transform from the front office to the car to the manufacturing plant floor,” Google Cloud CEO Thomas Kurian said in a press conference today. “And there are a number of different applications, including modernizing product development, improving manufacturing and supply chain management, using computer vision AI for employee training, inspection of equipment on the assembly line and other applications.”

Kurian also noted that Google and Ford are working to find new ways to monetize Ford’s data through features like maintenance requests and trade-in alerts.

Ford vehicles will be powered by Google’s Android operating system

“At Ford, we’ve got world-class in-house data insights and analytics teams,” David McClelland, Ford’s VP for strategy and partnerships, said. “We’ve recruited significant software expertise and we’re making great progress in this area. And we’re moving rapidly towards commercializing our new self-driving business. And with this news that Thomas [Kurian] and I are announcing today, we’re turbocharging all of that.”

McClelland stressed that Google “brought the entire company to the table for us across cloud, Android, Maps and much more.” It’s maybe also no surprise, given Google’s expertise in this area, that Ford is looking to leverage Google Cloud’s AI tools as well. This work will go beyond the actual driving experience, too, and include work on modernizing Ford’s product development, manufacturing and supply chain, as well as predictive maintenance in Ford’s plants.

Like other car manufacturers, Ford is also looking to find ways to use the data it collects to create a connection to its drivers that goes beyond the buying experience and (maybe) the occasional maintenance visit to a dealership. For this to work, it needs to be able to understand its customers and offer personalized experiences.

Today’s announcement marks a bit of a turnaround for Ford, which had previously banded together with a group of other car manufacturers with the explicit goal of keeping Google’s role in the automotive industry to a minimum. Now, only a few years later, the two are coming together in one of the deeper partnerships in the industry.

It’s also worth mentioning that not too long ago, Ford had a deep partnership with Microsoft, which provided the basis of Ford’s Sync technology.

“From the first moving assembly line to the latest driver-assist technology, Ford has set the pace of innovation for the automotive industry for nearly 120 years,” said Sundar Pichai, CEO of Google and Alphabet. “We’re proud to partner to apply the best of Google’s AI, data analytics, compute and cloud platforms to help transform Ford’s business and build automotive technologies that keep people safe and connected on the road.”

Ford and Toyota launch consortium to help developers build in-car apps

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How Ford Is Thinking About the Future

• Mark W. Johnson

It’s developing a portfolio of new business models.

Dealing with the uncertainty of new, disruptive business models is one of the biggest challenges that faces any large, established company. To gain insight into how to think through these obstacles, the author offers five lessons from Ford’s approach to recent advances in the mobility industry: First, be ambitious with new projects, but don’t over-invest in any one idea. Second, be sure to think not just about the physical functionality of your product, but also about the social and emotional roles it fulfills. Third, constantly examine and update your business model. Fourth, be openminded about creating new rules and metrics for your organization. Finally, to reduce risk, consider building a portfolio of new business models. While there’s no predicting the future, these strategies can position you to take advantage of new opportunities as they emerge.

Everyone’s talking about a future in which vehicles are shared rather than owned, autonomous rather than driven, and where car companies make large shares of their profits on digital “mobility services.” But if you are the Ford Motor Company and face the prospect of investing billions in new technology while your century-old business model is overturned, you might first have a few questions. How are consumers going to react to all of this? What do they really want? How can you tell which opportunities are real and which are science fiction?

• Mark W. Johnson is co-founder and senior partner of the strategy consulting firm Innosight and author of  Lead from the Future   (HBR Press, 2020).

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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.

Ford CEO Hackett: Digital transformation means making the business fit first

Ford outlined its digital transformation plan, which revolves around smart connected vehicles, speeding up its product development and becoming more fit as a company on costs.

The interplay between Ford's quest for fitness and digital transformation is a notable one. CEO Jim Hackett, on the job at Ford for 100 days, is betting on a strategy where it can use efficiency and cost savings to fund the future.

As noted previously, there will be more trade-offs for multiple companies as future bets compete with delivering returns today . Nike , Taser , Campbells Soup , QVC and others are also making pivots to be more digital.

Hackett said Ford will embrace multiple technologies and focus on "integrating hardware and software in complex devices." Ford's pitch almost sounded a bit Apple-ish.

The catch is that Ford must stick to a long-term goal of 8 percent operating margins on its vehicles. That margin is very un-Apple-like.

Hackett on a conference call outlined Ford's vision:

Ford will prepare for disruption by becoming fit. There's no doubt that we've entered this period of disruption, you all know that. But we have to design the business to be more fit because it's going to give us time, resources and flexibility to evolve to where we know we have to be. We're going to be the vehicle business moving both people and goods. Some myth about not being in the car business is gone. In the future, people around the globe will still want and need our cars, trucks and SUVs and commercial vehicles. And I'm answering that question of whether Mobility would chip away at that cookie in any kind of way that would make us retreat. Not at all. Those vehicles though will be smart and connected. The reason, there's a wider berth now between dumb and smart products as we learn about robotics and their role in our vehicles. This will influence customer expectations of what they want in their vehicles in the future. Smart vehicles will be a given at Ford Motor Company. These smart vehicles will pair or thrive with a new transportation operating system. The history of transportation systems requires that pairing between whatever asset it was that moved people or goods in the environment that it was in, that could have been trails for horses, roads and stoplights for the cars as we knew them growing up, or GPS for satellites. Consequently, we see a dawning of a new transportation operating system for cities that's dealing with the fact that they're becoming more congested as more people move to cities and yet, they need more capacity.

In broad strokes, Ford said it is targeting the following:

All new vehicles in the U.S. will have built in connectivity by 2019. Ninety percent of Ford's new global vehicles will have connectivity by 2020.

Cut automotive cost growth by 50 percent through 2022 with common parts, fewer prototypes and cuts in order complexity. Ford expects $4 billion saved in incremental efficiencies over 5 years and $10 billion in materials.

Pare down customization. The current model of the Focus has 360 orderable combinations and Ford wants to get the to 26. The Escape has 2,302 combinations and Ford plans on 228.

Focus on electrification beyond the $4.5 billion investment already planned. Ford will also move manufacturing of its next-gen Focus to China . "Why didn't we move more quickly in the battery electric vehicles? Simply, it's uneconomic, and we were too much focused on the now. We believe that it was an all or nothing question. And now we know that there's a future around propulsion that we have to pay attention to. Propulsion is a selection then by customers based on their use case and there's going to be a variety of choices that they want to have," said Hackett.

Double down on partnerships with Lyft and Domino's Pizza for autonomous vehicles.

Technologies such as 3D printing, robotics, big data and virtual reality will be deployed in Ford's "factories of the future." The goal: Cut new vehicle development time 20 percent and product changeover time by 25 percent.

These factories will move from lean manufacturing approaches to processors powered by machine learning, artificial intelligence, 3D printing, virtual factories and "manufacturing 4.0." The cost savings will be derived from a smaller manufacturing footprint.

Previously:

• Why Ford is test-driving Microsoft's HoloLens globally for faster car design
• Ford Motor Company: Data and the future of autonomous vehicles
• Ford to trial Stratasys system to use 3D printing of one-piece auto parts
• Ford invests $1 billion in Argo AI to advance its virtual driver system
• Ford sees autonomous vehicles as key cog of smart city
• Robotics in business: Everything humans need to know
• Video: How Ford is making the future more mobile
• The future of delivery? Ford and Domino's Pizza partner for self-driving vehicle test

Concepts in this article include:

CXO budget priorities for 2018:

• How digital transformation is reshaping the IT budget: The journey of 3 CIOs
• Infographic: 2018 IT budgets are up slightly; spending focus is on security, hardware, and cloud
• Free PDF download: Tech Budgets 2018, a CXO's Guide
• IT budgets 2017-18: What the surveys tell us
• AI? Blockchain? Cloud computing? What technologies are CIOs really investing in right now?
• CIO Jury: 83% of CIOs say IT budget will stay the same or increase in 2018
• Building a viable IT budget for 2018: Eight critical steps
• IT budgets: Prioritise security, relocate technical staff, and avoid digitising silos
• Turning big data into business insights: The state of play
• Infographic: Most companies are collecting data, but aren't using big data solutions
• Free PDF download: Turning Big Data into Business Insights
• Five organizations that are using big data to power digital transformation
• Choosing the best big data partners: Eight questions to ask
• Seven pitfalls to avoid when using big data to power digital transformation
• Tech's war on drugs: How big data is being used to fight the US opioid epidemic
• Booktopia uses big data to test assumptions before implementing changes

Digital transformation:

• The enterprise technologies to watch in 2017
• Intro: Digital Transformation, a CXO's Guide
• Artificial intelligence, analytics help speed up digital workplace transformation
• Five emerging technologies for rapid digital transformation
• Maker of Taser weapons goes digital, renames itself Axon in cloud platform bet
• Digital transformation: Retooling business for a new age
• Infographic: Digital transformation is a work in progress for most companies
• Five winning plays for digital transformation
• Enterprise IoT in 2017: The state of play
• Infographic: Companies are using IoT to monitor environments and improve products
• Internet of Things: CIOs are getting ready for the next big revolution
• The Internet of Things: 10 types of enterprise deployments
• 16 questions CXOs should ask before starting an IoT project
• How to calculate TCO and ROI for enterprise IoT implementations
• How to secure your IoT deployment in 10 steps
• The five industries leading the IoT revolution
• Inside the black box: Understanding AI decision-making
• Infographic: 50 percent of companies plan to use AI soon, but haven't worked out the details yet
• Five ways your company can get started implementing AI and ML
• Why AI and machine learning need to be part of your digital transformation plans
• Should Amazon be your AI and machine learning platform?
• Should Google be your AI and machine learning platform?
• Should Microsoft be your AI and machine learning platform?
• Should IBM be your AI and machine learning platform

Rupert Goodwins' Diary

6 ways apple can leapfrog openai, microsoft, and google at wwdc 2024, ibm predicts five biggest tech trends.

• Predictive Maintenance

Predict auto failures in advance using connected vehicle data in real time

Predictive maintenance.

Predicting vehicle failures before they happen via connected modem data with Ford

• Machine learning powered predictive maintenance model, built and deployed on Kortical, was significantly better than existing diagnostic systems
• Focussing in on FIE failures, Kortical could predict 22% of failures, on average of 10 days in advance, with a low 2.5% false positive rate
• We estimate the potential upside just from this part is in the region of $7m (122k hours of downtime saved)
• For the customer this means higher uptime, key for the heavily reliant delivery / logistics sector
• Lean AI Delivery Team - 1 Data Scientist, 1 Domain Expert

The imperative for change

The predictive maintenance solution.

By using machine learning to interpret the full set of DTC data and also to take into account broader contexts such as recent repairs, build numbers and vehicle metadata, we were able to achieve a much lower false positive rate for any given issue than was achievable simply using the DTC alone. For a subset of 22% of failure cases, we were highly accurate 10 days in advance of the failure fully manifesting and so enabling the predictive maintenance business case.

The business impact

View our other extended client case studies…

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+90% Accuracy

50x Productivity Boost

Innovator International Increases Market Share with AI Customer Support Chatbot

Reed Recruitment Transforming Job Posting with an AI agent

UK High Street Bank

Beating traditional credit score with machine learning.

83% reduction default rate

04 week POC

BT & 3 network infrastructure provider MBNL predictive maintenance

22,000 Towers

52% Failures Caught

06 Week results

AI Powered Marketing

Increasing revenue by 56% through hyper-personalised offers.

56% REVENUE INCREASE

4 WEEK BUILD

1000% ROI ON MARKETING SPEND

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Intelligent Automation: Automating 98% of document classification from aviation records

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Inventory optimisation using AI to reduce over-stock

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Customer services email automation with AutoML

Over £750k p.a. ML solution saved the company

95% accuracy Model that could process 57% of the emails

4 weeks Production ready

Automating accounting with AI and machine learning

98% accuracy

06 months to production

10x productivity

Assets Under Management

Predicting customer churn with ai.

57% churn predicted

04 weeks results

Customer feedback automation with Natural Language Processing (NLP)

43.9% accuracy gain in a few hours

08 hours for model creation

05 weeks to production

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Amplitude, Inc.

Us03213a1043.

• Digital Transformation Examples: 3 Company Case Studies

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.

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.

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. Digital transformation signals the start of new investments, and digital optimization compounds them.

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.

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 .

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 .)

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 today .

• 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

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Amplitude Inc. published this content on 25 March 2022 and is solely responsible for the information contained therein. Distributed by Public , unedited and unaltered, on 31 March 2022 00:45:21 UTC .

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