Delivering on the Promise of Digital Transformation

How smart, targeted investments in the digital space are forever altering the physical world of tomorrow.

Mobile phones and tablets. Social media and cloud computing. Big data and blockchain. Augmented and virtual reality. The internet and the Internet of Things.

These technologies aren’t brand new. But as they have developed and proliferated, their potential to help businesses become more innovative, agile and customer-centered is clear.

Companies around the globe are scrambling to incorporate these pillars of the digital ecosystem into their operations.

The reason? To reimagine what they do – and to do it better than ever – by tapping into the dynamic, hyperconnected networks of people, computers and machines that digital technology has created.

UPS uses state-of-the-art VR technology to train its drivers.

Racing to digitize

The research firm IDC estimates that companies worldwide will spend $1.3 trillion on so-called digital transformation initiatives this year, up from $1.1 trillion in 2017. By 2021, that annual worldwide spend is expected to almost double to $2.1 trillion.

The music, media, retail and taxi cab industries were among the first to feel the disruptive power of these platforms. New entrants powered by digital technology made investments in physical assets – like CD factories, printing presses, brick-and-mortar stores and taxi medallions – susceptible to disruption. In many cases, digitally driven entrants pushed aside their entrenched competitors.

Determined not to repeat that mistake, industry leaders in the manufacturing, healthcare and transportation sectors are racing to digitize their businesses.

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Companies worldwide will spend $1.3 trillion on so-called digital transformation initiatives this year.

Manufacturers now account for about a quarter of worldwide spending on digital transformation initiatives, according to IDC. Industrial workers routinely use augmented reality (AR) devices on the assembly line to help them reduce errors, and field service technicians often wear them as a guide for the diagnosis and repair of idled products.

But leveraging the power of digital technology doesn’t necessarily require massive investments. Ultimately, the technologies that matter are already all around us: mobile and cloud computing, social media and data analytics.

Organizations that can leverage the power of these platforms to improve internal processes and the customer experience can raise their digital game.

Tapping into blockchain

Like innovative peers in other industries, UPS is incorporating digital solutions, including chatbots and virtual assistants, into its business.

Some of these initiatives promise to be real game-changers like our commitment to put blockchain, the decentralized, digital ledger system primarily associated with the finance industry, to work in the supply chain.

For time- and temperature-sensitive products like pharmaceuticals, blockchain promises to speed up delivery, minimize discrepancies, improve visibility, streamline processes and save money.

It’s a technology that will require ample coordination across the industry, which is why we recently joined the Blockchain in Transport Alliance, an industry-wide group working to establish technology standards and implement a shared system.

Digital training

But we’re even more targeted with some of our digital investments. These are things our customers can do because they harness the power of the smartphones and tablets that employees bring to work with them.

Consider what UPS is doing on the employee training front. Every day, we ship 20 million packages worldwide. But between Thanksgiving and Christmas last year – our so-called peak – we delivered more than 30 million packages a day on 90 percent of the days.

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Digital technology isn’t just about efficiency and customer engagement but also safety.

To deal with that seasonal surge, we hired nearly 100,000 temporary workers. In the not-so-distant past, those temporary employees needed extensive training before they could work effectively in our sorting centers and package cars.

But these days, we have the seasonal hires install UPS applications on their mobile devices. The applications provide real-time guidance, package by package, as they do their jobs – whether they’re sorting parcels and boxes at our warehouses or delivering them to their final destinations.

And in the future, if a customer prefers delivery to the back door, the mobile delivery app will alert the UPSer as they go about their route. Or if the customer wants the package left inside a locked garage, the app will alert the employee and display the customer-provided code to open the door.

More than efficiency and customer engagement

Digital technology isn’t just about efficiency and customer engagement. It can also help power improvements in safety. At UPS, we’re using virtual reality to help train new drivers. VR allows trainees to experience hazardous conditions they’re likely to encounter on the road.

It’s similar to the flight simulators our pilots use – and just as effective in building skills that allow them to handle potentially dangerous scenarios in the real world of UPS operations.

And it’s yet another example of how we’re tapping into the digital world to better the physical world of tomorrow.

These remarks were adapted from a panel discussion, Road to Reinvention, at the University of California, Irvine’s Center for Digital Transformation.

Top photo: UPS drivers use virtual reality for training purposes. 

Robin Hensley is Senior Director of Global CRM Applications, Customer Experience and Transformation at UPS.

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