2015 will be a major year for digital transformation as more companies wake up to the new digital business reality. Here’s who to watch in 2015, here are three leading organizations undergoing big digital changes in 2015 and beyond. These transformations have the ability to set the precedent for entire sectors with innovative new business models while giving us insight into the minds of market leading executives.
The big one for me is Real Madrid’s four-year partnership with Microsoft. Real Madrid, in case you forgot, is the world’s most valuable football club. While the deal has a relatively small dollar amount attached to it, a mere $30 million, it is a deal which will give insight into digital technology’s future relationship with sports. Remember that the live nature of sports has allowed it to retain value on television in the face of the internet, unlike nearly every other piece of programming. That is to say, there is no Netflix for sports, the old model has not been overturned and the digital future of live sports is yet to be written.
I am extremely interested to see what sort of digital platform Microsoft comes up with in the next few years. Microsoft VP said, “Powered by Microsoft’s cloud solutions, we will offer fans exclusive, personalized and customized content and digital services…fans will be able to choose not only what content they want to access but also create their own customized versions of an experience whenever, however, and from wherever.” It all sounds promising to me.
This year Lufthansa and IBM announced a seven year, €1 billion digital transformation partnership. The early goals of the deal are to deliver a new digital infrastructure which are estimated to save Lufthansa an annual €70 million. The long term goals are to develop and launch advanced, “business analytics, mobile computing and social business.”
Much like the Real Madrid partnership, this is a partnership that has potential to set a precedent for an entire industry. The airline industry is severely margin sensitive and constantly struggling to cope with unexpected fluctuations. Profitability relies upon getting the ratio of premium to economy seats just right, something which is damn near impossible with most airline’s current legacy ticketing systems. All that, coupled with pressure from increasingly savvy third-party ticket resellers means that the situation is ripe for a digital change.
I look forward to seeing what IBM can do to help transform this nearly broken business model. Airlines need real-time systems to dramatically increase their capacity to monitor and quickly adjust to fluctuations affecting efficiency. Real-time analytics which allow airlines to quickly and smartly respond to cancellations, delays, weather, aircraft choice, etc. Airlines also need to recapture control over the relationship with their customers away from third-party sellers and this can only be done by becoming much more savvy with their collection, understanding and use of data.
In the past year or so, McDonalds has hired around two-dozen extremely tech savvy executives from places like PayPal, Yahoo, and Ticketmaster. The team is led by former Amazon executive Atif Rafiq in a shiny new San Francisco office. Rafiq’s plan is to pivot McDonalds towards resembling an ecommerce company via mobile technology. So far, this has manifested in a big partnership with Apple to bring Apple Pay to McDonald’s 14,000 restaurants.
Rafiq says that this is just the start of McDonald’s digital transformation and I look forward to seeing what his team are able to achieve. McDonald’s is playing catch-up with other big guns who are much more digitally integrated, like Starbucks or Subway. What captures my attention is precisely the fact that they are playing catch-up, will the McDigital team be able to build upon and outdo the digital successes of Starbucks? Will they be able to institute digital transformation on a massive scale? Succeed or fail, there will be tons to learn in the coming years from their work.