„Problemy ZarzÈdzania (Management Issues)”

Vol. 19, No. 3(93), p. 100 –121, e-ISSN: 2300-8792

https://doi.org/10.7172/1644-9584.93.5
© 2021 Authors. This is an open access article distributed under the Creative Commons BY 4.0 license
(https://creativecommons.org/licenses/by/4.0/)

Digital Transformation of Transportation

in the Age of COVID-19

Dorota Zimnoch
mgr, Faculty of Management, University of Warsaw, Poland
https://orcid.org/0000-0002-9937-1500

Submitted: 07.02.2021 | Accepted:09.07.2021

Abs t ract
Purpose: To highlight the key trends in the transportation industry and the role of emerging technologies
and digital transformation in acceleration of value creation. The conceptual framework suggests how
such transformation could be implemented.
Design/methodology/approach: Research in a focus group was carried out where selected digital trans-
formation frameworks were reviewed, and one was selected as the most applicable to the transportation
industry. The selected framework was adopted for the transportation industry.
Findings: 1. Value creation should be positioned as the key objective of transformation. 2. Digital
transformation is not so much about technology as it is about people. 3. The staged approach towards
transformation allows it to be paced with account being taken of the maturity of technology as well
as the maturity of competencies across the organization. For a successful digital transformation, the
organization invests in development of digital capabilities. Moving towards digital means a mindset shift,
cultural change and adoption of new methods of working.
Research limitations/implications: Transportation companies are at the early stage of transformation
at such a scale. The case studies on successful transformations are limited. Therefore, experience is
gathered mainly by the test and learn process. It is recommended that findings are validated with abwider
group of experts when transformation matures. Comparing the same framework usage in other industries
can also offer additional learnings to be considered by change leaders.
Originality/value: Transportation industry is in a process of transformation towards connected, elec-
tric and autonomous solutions, accelerated during the COVID-19 pandemic. The presented framework,
adopted for the transportation industry, offers a practical tool for executives and change leaders to lead
the transformation.
Keywords: digital transformation, transportation, leading change, connected world, electric transport,
autonomous transport.
JEL: 0330

Correspondence address: Faculty of Management, University of Warsaw, Szturmowa 1/3, 02-678 War-
saw, Poland.

Suggested Citation: Zimnoch, D. (2021). Digital Transformation of Transportation in the Age of COVID-19.
Problemy ZarzÈdzania (Management Issues), 19(3), 100–121. https://doi.org/10.7172/1644-9584.93.5.
Digital Transformation of Transportation in the Age of COVID-19 101

Transformacja cyfrowa branĝy transportowej

w dobie COVID-19
S t res zczeni e
Cel: wyodrÚbnienie kluczowych trendów w branĝy transportowej oraz roli przeïomowych technologii
ibtransformacji cyfrowej w tworzeniu wartoĂci w branĝy. Przedstawiony model koncepcyjny transformacji
cyfrowej stanowi praktyczne narzÚdzie, które mogÈ wykorzystaÊ liderzy transformacji i agenci zmiany.
Metodologia: przeprowadzono badania z grupÈ fokusowÈ, w której wziÚïo udziaï 8 ekspertów. Dokonano
przeglÈdu wybranych modeli transformacji cyfrowej. Grupa wyselekcjonowaïa jeden model, który nastÚpnie
zostaï zaadoptowany do branĝy transportowej.
Wyniki: 1. Tworzenie wartoĂci powinno byÊ nadrzÚdnym celem transformacji. 2. O sukcesie transformacji
cyfrowej decyduje nie tyle technologia, ile ludzie. 3. Etapowe podejĂcie do transformacji pozwala nadaÊ
jej tempo z uwzglÚdnieniem dojrzaïoĂci technologii oraz dojrzaïoĂci kompetencji w caïej organizacji. Aby
transformacja cyfrowa zakoñczyïa siÚ sukcesem, organizacja powinna inwestowaÊ w rozwój kompe-
tencji cyfrowych. PrzejĂcie w kierunku cyfryzacji oznacza zmianÚ sposobu myĂlenia, zmianÚ kulturowÈ
ib przyjÚcie nowych metod pracy.
Ograniczenia/implikacje badawcze: firmy transportowe sÈ na wczesnym etapie transformacji na niespo-
tykanÈ dotÈd skalÚ. Informacje dotyczÈce studium przypadków udanych transformacji w tym obszarze sÈ
ubogie, brakuje ugruntowanych wzorców. Dlatego doĂwiadczenie jest gromadzone gïównie w procesie
testowania i uczenia siÚ. Zaleca siÚ, aby wyniki zostaïy zweryfikowane z szerszym gronem ekspertów
wraz z postÚpem transformacji. Porównanie wykorzystania tego samego modelu w innych branĝach
moĝe równieĝ dostarczyÊ dodatkowych informacji, uĝytecznych dla liderów zmiany.
OryginalnoĂÊ/wartoĂÊ: branĝa transportowa przechodzi transformacjÚ na olbrzymiÈ skalÚ, dÈĝÈc do
rozwiÈzañ zintegrowanych, elektrycznych i autonomicznych. Proces ten przyspieszyï podczas pandemii
COVID-19. Przedstawiony model, zaadaptowany do branĝy transportowej, stanowi praktyczne narzÚdzie
dla liderów zmian do przeprowadzenia tejĝe transformacji.
Sïowa kluczowe: transformacja cyfrowa, branĝa transportowa, zarzÈdznie zmianÈ, transport zintegrowany,
elektryczny, autonomiczny.

1. Transportation Industry and Its Challenges

The transportation industry, responsible for moving people and goods,
plays an important role in economic growth. In the EU only, the transport
industry directly employs around 10 million people and accounts for about
5% of GDP (EU Science Hub, n.d.).
Experts from the Volvo Group, one of the leading companies in
the industry, name the following factors that create strategic as well as
operational challenges for the industry: global and regional economic,
regulatory, digital, technological, climate and energy resource efficiency
(Volvo Group, 2020). Furthermore, the industry is shaped by shifts in
customers’ and consumers’ behaviors and expectations, accelerated access
to information, new e-commerce trends and greater adoption of digital
services (Charm et al., 2020; Wang & Sarkis, 2021, p. 4).
Besides all the positive impact, transportation also contributes to
noise, air-pollution and climate change. The IDTechEx Report explains

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102 Dorota Zimnoch

that “despite medium and heavy duty trucks representing only 9% of the
global vehicle stock, large inefficient diesel truck engines combined with
high average annual mileage mean that the truck sector contributes 39%
of the transport sectors’ greenhouse gas emissions, which equates to about
5% of all global fossil fuel derived CO2 emission” (Wyatt, 2020). According
to analysts from the World Economic Forum, if nothing was done, by
2030, the amount of CO2 emissions would further increase by 6 tones; in
addition, the number of parcels for delivery would increase by 36%, and
traffic jams would be longer by 21 minutes on average (WEF, 2020). An
increasing number of environmental and safety regulations puts significant
pressure on the industry to change.
The biggest challenges that remain in the transportation business are
the siloed, fragmented processes, including those related to collecting,
processing, and driving business value from data (BlueJay, 2019).
Satya Nadella, the CEO of Microsoft, the company that is a strategic
partner to many transportation organizations, stated that “digital technology
is becoming core to both how we think about resilience in business
continuity, as well as bringing about that next level of productivity change
and efficiencies across industries” (Business Standard, 2021).

This paper investigates the academic and practitioners’ perspective in

search of the response to the following:
RQ1: What are the key trends and strategic priorities of the transportation
industry?
RQ2: How has COVID-19 impacted the transportation industry?
RQ3: How to drive digital transformation in the transportation industry
in acceleration of value creation?

Considering the amplified need for digitalization in the transportation

industry, the paper also presents a conceptual framework for digitalization
and digital transformation. The framework, based on the original concept
presented by IBM, has been enhanced by the author based on the review
of existing frameworks and evaluation with industry experts.

2. Key Trends and Strategic Priorities of the Transportation

Industry
In 2017, the European Commission adopted the Strategic Transport
Research and Innovation Agenda (European Commission, 2021), with the
following strategic priorities:
– cooperative, connected, and automated transport,
– transport electrification,

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Digital Transformation of Transportation in the Age of COVID-19 103

– vehicle design and manufacturing,

– low-emission alternative energy for transport,
– network and traffic management systems,
– smart mobility and services,
– infrastructure.

According to the study by IBM “Truck 2030 – Digitally reinventing

for the long haul” (IBM, 2011), the top trends that will influence the
truck industry and the response to the above-mentioned challenges include:
technology advancements, customer expectations, and the global workforce.
Verhoef et al. (2021) also highlight the role of intensified competition in
driving digital transformation. Heilig et al. (2017) emphasize the role of
emerging technologies in increasing the productivity and efficiency they
offer, as well as, with modern information technologies, provide better
planning and management systems.
The leading truck manufacturers, per revenue, include Daimler, Volvo
Group, Traton, Paccar.

in bilion U.S. dollars

Daimler
42.54
(Trucks & buses)

Volvo
(Trucks & buses) 27.69

Volkswagen*
(Trucks & buses) 27.44

Paccar
(Trucks & buses) 17.15

0 10 20 30 40 50
Revenue in billion U.S. dollars

* Includes MAN Truck & Bus, Scania Trucks, Scania Buses; segment figures have been added up.

Fig. 1. Worldwide revenue of selected truck and bus manufacturers in 2020. Source:
Statista, 2021.

The following analysis of the post-COVID-19 strategies of the leading

providers of transportation solutions has been conducted.

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 104 Dorota Zimnoch

Daimler Volvo Group Traton SE Paccar

Strategy 1. Add value for 1. Transform the Volvo Group 1. Brand 1. Reputation for superior
pillars customers to become a leading performance operational excellence
2. Lead globally end-to-end integrator as well — profitable and premium-quality
3. Grow services as offering easy to integrate growth and products and services
4. Differentiate products and services increased 2. Long-term growth
by technologies through strong brands performance in revenues and
5. Focus on core 2. Grow the service business of our brands net income reflects
business 3. Accelerate electromobility 2. Cooperation increased market share
6. Lean organization solutions & synergies in North America
7. People & culture 4. Grow in Asia and the US 3. Global expansion and Europe, excellent
8. Partnerships 5. Develop robust profitability 4. Customer aftermarket parts
throughout the decentralized performance and
regional value chains growth in financial
6. Selectively capture, services
accelerate and scale-up 3. Maintain profitability
new businesses and develop throughout the cycle
competencies and capabilities due to strong cost
needed control discipline
7. Reinforce value-based and experienced
leadership and ways of management team
working where all colleagues
are empowered to take
action and are accountable
for the results

Tech – Electric transport, – Autonomous, – The company – Zero emission trucks

driven in particular – Electric, remains firmly – Battery charging
trends focusing on two – Connected vehicles committed to solutions
technologies: its pledge to – Autonomous trucks
batteries and The effect will be particularly invest €1 billion – Connected services
hydrogen-powered strong at the convergence in electrification
fuel cells of these trends as it affects through 2025
– Technologies vehicles, assets as well as – Self-driving trucks
assisting infrastructures, and opens have the potential
accident-free the way for a paradigm shift. to increase the
driving efficiency
– Autonomous of logistics
vehicles and
supporting
platforms
Tab. 1. Strategic pillars and priorities of transportation industry leaders. Source: Own study, based on the companies’
strategic materials and documents: Daimler, 2021b; Volvo Group, 2020; Traton, 2020; Paccar, 2021.

It can be noticed that all companies emphasize strategic pillars being

customer, profitability and partnerships. The key trends are: electromobility,
autonomous driving, connectivity.

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Digital Transformation of Transportation in the Age of COVID-19 105

3. Electromobility
Connected and autonomous vehicles (CAVs) are expected to bring
important environmental, social, and economic improvements in
transportation systems (Sen et al., 2020, p. 153).
Leaders in transportation focus on increasing safety and reducing
the environmental footprint to increase efficiency of the whole supply
chain. Electromobility (eMobility) involves deploying Information and
Communication Technologies (ICT) and electric technologies in vehicles
to enable electric propulsion of vehicles referred to as Electric Vehicles
(EVs) (Bokolo, 2020, p. 32).
A shift towards electric vehicles requires not only a change of vehicles
but also investment and development of the supporting infrastructure,
for example batteries production and utilization, charging stations, traffic
optimization software. Most fleets will not rely on public charging but on
private infrastructure, such as at their own fleet facilities (Geotab, 2020).
Recently, the Volvo Group has launched Volvo LIGHTS, a unique
collaboration between the South Coast Air Quality Management District,
Volvo Trucks and 14 other organizations to pioneer a range of vehicle,
charging and workforce development innovations critical for the commercial
success of battery electric trucks and equipment. To facilitate electric
trucks development, Daimler Trucks launched the “ePowertrain”, an
architecture for all-electric trucks, where innovative and “reliable drive
system components are manufactured according to globally uniform quality
standards” (Daimler, 2021a).
General Motors has developed a suite of software tools to offer an
EV ecosystem for the commercial marketplace. The cloud-based software
platform suggests the best delivery routes and other fleet management
features, location monitoring or battery status (TechCrunch, 2021).

4. Autonomous Driving
During the pandemic, consumer preferences changed as they shifted
towards e-commerce. Logistics and shipping operators have been provided
with a strong case to include self-driving trucks in their fleet as the means
of a response to shortage of drivers or other emergencies and unforeseen
circumstances (Research and Markets, 2020b). Autonomous vehicles could
help to increase the delivery network capacity, reduce costs and comply
with social distancing measures (Euromonitor International, 2020).
Therefore, solutions are emerging among OEMs and start-ups. Waymo,
Aurora, TuSimple, Plus.ai are some such examples (Ackerman, 2021).
Scania developed Autonomous Transport Solutions, which is a complete
system that encompasses handling logistics, the assignment of tasks to

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106 Dorota Zimnoch

vehicles, and information sharing between vehicles and infrastructure. Volvo

developed the Vera autonomous tractor, which is tested to move containers
from a logistics center in Gothenburg, Sweden, to the nearby port.
One example of the truck autonomous driving trend is platooning, where
the human-driven truck is followed by a few autonomous trucks imitating
the driving maneuvers of the lead truck (Wang & Sarkis, 2021, p. 7). The
solution is powered with a set of technologies, including sensors, platooning
control unit, driver controls, lidar, sonar, GPS, and radar-based collision
mitigation system. Platooning remains one of the top trends in autonomous
driving and companies like Daimler, Scania, Iveco, Volvo, DAF, Peloton,
Huawei, TuSimple and Hyundai are testing the solutions.

5. Connectivity
Connectivity is also an enabler for automation and electromobility.
By a leveraging set of technologies, data is collected and provided in
real time, allowing a truck to communicate almost instantly with other
vehicles and infrastructure around it. Development of Vehicle-to-Everything
(V2X) is observed, which refers to Vehicle-to-Vehicle (V2V) and Vehicle-
to-Infrastructure (V2I) communication: “wireless technology that enables
data exchange between vehicles and their surroundings” (Castellano, 2020).
Volvo Trucks claims to reduce diagnostic time by 70% and truck repair
time by 25% by using IoT and artificial intelligence, which allowed for
embedding telematics for over-the-air updates to engine software, and
processing millions of data records instantaneously by using the on-board
technology, combined with a back-end analytics platform (Violino, 2020).
Claes Erixon, Head of R&D at Scania explained: “The volume of
operational data from on-road Scania vehicles is doubled every 20 months.
Engineers benefit from all this information when designing new features
or improving existing functions” (Bulktransporter, 2019). Another truck
manufacturing giant Daimler claims their trucks are equipped with as many
as 400 sensors for collecting valuable information and their software contains
100 million lines of code — more than in that of a jet plane. This data
can clearly help to develop better services and enhance the performance
of road freight traffic and increase its efficiency (Daimler, 2021a). Joyce
Tam, PM at Peloton, stresses the lack of capabilities in data intelligence as
the obstacle to the development of connectivity solutions and argues that
it should remain the focus of the ecosystem (Roeth, 2019).

6. Impact of COVID-19 on the Transportation Industry

The COVID-19 pandemic, leading to social and economic lockdown,
put further significant pressure on the industry. The European Automobile
Manufacturers’ Association (ACEA, 2021) reports that in 2020, the EU

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Digital Transformation of Transportation in the Age of COVID-19 107

commercial vehicle market shrank by 18.9% to reach 1.7 million units. The
global truck transport market is estimated to have declined from $1,609.2
billion in 2019 to $1,591.8 billion in 2020, and then to recover and grow
at a CAGR of 9% from 2021 and reach $1,984.9 billion in 2023 (Research
and Markets, 2020a). Near-shoring manufacturing and material sourcing
grew in importance and led to the need to revamp the supply chains and
goods trucking companies and how they operate (Pyzyk, 2020). At first, the
industry responded to the times of uncertainty by keeping cost in check.
Many vehicle factories shut down for more than 30 days (ACEA, 2021)
and put their employees on furlough, reducing resources and production
of vehicles. With time, it become clear that the climate change challenge
and pandemic are great catalysts for the accelerated technological adoption
by an order of magnitude.
The impact of the pandemic on vehicles production, on logistics and the
whole supply chain prompted manufacturers to review their current business
models in search of new revenue streams. As a result, transport-as-a-service
(TaaS) emerges as a strong trend. It means a shift from ownership of vehicle
towards a subscription model with on-demand pay-per-use solutions. As
such, TaaS sits at the intersection of electromobility, autonomous vehicles
and connectivity and to execute that strategy, organizations turn towards
open innovation and building ecosystems, where they can play a role of
ab contributor, partner or an orchestrator.
During an Investors Day, Martin Lundstedt, the CEO of the Volvo Group,
announced the company’s focus on the TaaS, planning that, by 2030, 50% of
revenue will come from those solutions and services (Volvo Group, 2021).
At the end of 2020, Daimler announced the launch of Global Connectivity
Services focusing on uniting the company’s end-to-end digital architecture,
including in-vehicle software, cloud platforms and digital solutions. It will
also include work on Remote Platform Management to allow “customers
to deploy and manage mobile device and mobile application solutions to fit
their mixed fleet needs and seamlessly integrate those devices and apps into
their trucks”. It is still early to assess the long-term impact of the pandemic;
however, numerous researchers investigated the impact of COVID-19 on
the transportation and logistics industry and argue that the pandemic
accelerated the use of digital technologies and digital transformation in
the transportation sector (Medyakova et al., 2020; Almeida et al., 2020;
Özispa, 2020).

7. Digital Transformation as a Catalyst

of Technological Adoption
The paths of digital transformation include: digitization, digitalization and
digital transformation, where the first two are considered more incremental
phases towards the third one (Verhoef et al., 2020).

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108 Dorota Zimnoch

Oxford English Dictionary (“Digitization,” 2010) defined digitization

as “the action or process of digitizing; the conversion of analogue data
(esp. in later use images, video, and text) into digital form”. Digitalization
(“Digitalization,” 2010), by contrast, is defined as “the adoption or increase
in use of digital or computer technology by an organization, industry,
country, etc.”
Digitization can be defined also as the encoding of analog information
into a digital format (i.e., into zeros and ones) such that computers can
store, process and transmit such information (Dougherty & Dunne, 2012,
p.b1469). In other words, it is the conversion of existing data and documents
into a digital format. Digitalization is the stream in which digital technologies
and digitized data augment the modus operandi of the organization, with
an impact on products, services, ways of working, thus affecting business
models and value creation capabilities. It improves business processes but
does not transform them. As a result of digitalization, the IT strategy is
seen today “as essential to the framing of overall business strategy, that
is, a fusion of IT and business strategy” (Holotiuk et al., 2017, p. 993).
Hence, while the digitization is an innovation that is centered around
forward step in processes around the information such as creation, storage,
transfer, etc., the digitalization centers around implementation of digital
technologies also as a core element of activities that redefines lifestyle and
business processes correspondingly (Ilko, 2020).
Morakanyane et al. (2017) describe digital transformation (DT) as an
evolutionary process that leverages digital technologies and capabilities to
enable business models, operational processes and customer experiences to
create value. Verhoef et al. (2019, p. 893) describe digital transformation
as a change in how a firm employs digital technologies to develop a new
digital business model that helps to create and appropriate more value
for the firm. Reis et al. (2018, p. 413) define digital transformation as the
use of new digital technologies that enables major business improvements
and influences all aspects of customers’ life. Ismail et al. (2018) define it
“as the process through which companies converge multiple new digital
technologies, enhanced with ubiquitous connectivity, with the intention of
reaching superior performance and sustained competitive advantage, by
transforming multiple business dimensions, including the business model,
the customer experience (comprising digitally enabled products and
services) and operations (comprising processes and decision-making), and
simultaneously impacting people (including skills talent and culture) and
networks (including the entire value system).”
SaviÊ (2020, p. 28), who conducted an overview of terminological,
conceptual, and historical differences between digitization, digitalization
and digital transformation, points out that digital transformation leads to
business transformation with new or altered business models and ways of
working, providing new value producing opportunities and revenues. He

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Digital Transformation of Transportation in the Age of COVID-19 109

also states, based on his literature study, that “most agree […] that digital
transformation, using modern information technology (IT), represents large-
scale change in fundamental business processes and components. These
changes generally target business models, products, productivity, employee
roles, production, marketing, financial management, and other processes.
They also include cultural changes that challenge the status quo, and the way
information is managed, structured, and positioned within an organization”.

In the context of transportation, digitalization can enhance transport

sustainability with respect to physical, environmental, economic and social
dimensions (Sarkis et al., 2020, p. 68). Thanks to the digital transformation of
the entire transport sector, new business models are emerging and give rise
to innovative mobility services (Tsakalidis et al., 2020). Almeida et al. (2020)
suggest that “the impact of digitalization is expected to be transversal to each
area and will encourage the emergence of new digital products and services
based on the principle of flexibility”. Kayõkçõ (2018, p. 783) points to the
benefits of digitalization in transportation, such as connected processes and
decentralized autonomous management, real-time full transparency from
suppliers to customers, and argues that best results will be achieved when
combined with the entire supply chain and not limited to the organization’s
production activities. Digitalization is not only focused on cost savings, but
also includes process improvements that may enhance customer experiences
(Verhoef et al., 2021).
Forrester Consulting has conducted an in-depth survey on the current
state of digital transformation in the global transportation industry and
revealed that the three most important internal forces driving transformation,
according to the respondents, include: 1) improving customer and passenger
experience (65%), 2) enhancing business and IT agility (49%), and
3)bimproving operational efficiency (46%) (ITS International, 2021). Robin
Joffe, Partner-President, Frost & Sullivan, Japan explains: “Digitalization
is driving greater resource efficiencies, sparking innovation, and opening
up unprecedented opportunities for growth. By upturning traditional value
chains, it is encouraging stakeholders to look anew at business models,
partnership strategies, and investment focus” (Frost & Sullivan, 2020).

Digital transformation is driven by implementation and adoption of

technologies. At the early stage, it allows for optimization of selected
processes. With the technology maturity through adapt, scale and disrupt
phases, the organization can extract more value from the technology to
transform the existing solutions and business models to create new value
for the organization.
One such example of the journey from digitization to digital transformation
can be demonstrated with cloud computing. In the increasingly digitized
world, the amount of data is experiencing tremendous growth. This creates

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110 Dorota Zimnoch

immense opportunities for businesses to develop new products, services

and business models, through data alignment and democratization. As
ab result, the organization can improve operational stability, resilience and
performance of the data platform, expand data capacity while reducing the
runtime and maintenance costs. With time, it can transform towards a data
and insights driven organization. For example, telematics data captured
initially to optimize the performance of an asset can be leveraged to provide
1) two-way communications capabilities; 2) situation technology (geographic
attitude); 3) computing model for system rule and interface to self-propelling
electronics systems (Neumann, 2018).
Vogelsang et al. (2018, p. 127) conducted research and concluded that
“DT can only be successful if companies collaborate with customers, suppliers
and other firms from the branch. A cultural change is necessary to enable
an agile working environment as well as more interdisciplinary activities. It
becomes evident that the choice of technology is essential. However, driving
only technology forward is not enough to gain benefits from DT”.

8. Digital Transformation Frameworks

Issa et al. (2018, p. 974) conducted research on digital transformation
in Industry 4.0 and argued that “defining one big project to realize the full
potential of digital transformation in a given organization is not feasible
and will definitely end in management disappointment and failure”. Hence,
they developed a conceptual framework which is based on the capability
maturity concept and addresses transformation through 4 levels of maturity:
Level 1 – No Industry 4.0 or only “ad-hoc”
Level 2 – Departmental level (isolated silos)
Level 3 – Organizational level (cross-departmental)
Level 4 – Inter-organizational level (cross value chain/supply chain
partners).

Vial (2019, p. 127) presented a conceptual framework of DT. He describes

the framework as built upon “relationships that emerged through our
analysis across eight overarching building blocks describing DT as abprocess
where digital technologies play a central role in the creation as well as the
reinforcement of disruptions taking place at the society and industry levels.
These disruptions trigger strategic responses from the part of organizations,
which occupy a central place in DT literature. Organizations use digital
technologies to alter the value creation paths they have previously relied
upon to remain competitive. To that end, they must implement structural
changes and overcome barriers that hinder their transformation effort.
These changes lead to positive impacts for organizations as well as, in some
instances, for individuals and society, although they can also be associated
with undesirable outcomes”.

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Digital Transformation of Transportation in the Age of COVID-19 111

The importance of digital transformation resulted in leading technology

and consulting companies developing the digital transformation frameworks.
A selection of the most commonly used ones is presented below.

PwC built the framework “Industry 4.0: Building the digital enterprise
– Industrial manufacturing key findings”, focusing on and following the
stages of:
1. digitalization and integration of vertical and horizontal value chains;
2. digitalization of products and services;
3. new business models and customer access.
The transformation is powered by data and analytics as a core capability.
Convergence of emerging technologies drives transformation for value
creation.

Fig. 2. Digital transformation framework for Industry 4.0 by PwC. Source: Industry 4.0: Building
the digital enterprise, 2016 Global Industry 4.0 Survey, PwC. Engineering &b Construction.

Cognizant built their digital transformation framework based on four

distinctive sections dedicated to Customer, Product, Processes & Systems
and Organization. It highlights that digital transformation stretches beyond
technology implementation and digitalizes customer experience, products
and services, operations and the overall organization. It suggests that
transformation cuts through the entire value chain, including partnerships.
The framework does not provide a clear guide on execution.

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112 Dorota Zimnoch

Fig. 3. Digital transformation framework by Cognizant. Source: Cognizant Services: Digital

Strategy.

Boston Consulting Group’s digital transformation framework is centered

around people, technology, and data. It emphasizes the importance of
culture, leadership, and governance. DT is driven through phases of
innovation, incubation and industrialization, where each phase includes
the Outcome, Technology and Human perspective.

Fig. 4. BCG digital transformation framework. Source: BCG Analysis, Digital Transformation.

Accenture released its Digital Enterprise Framework in 2019. It focuses

on the external perspective of customers and partners, as well as the
internal perspective of employees. Digital operations cover the full cycle,

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Digital Transformation of Transportation in the Age of COVID-19 113

including the manufacturing and supply chain, relevant to the transportation

industry. Emerging technologies are positioned as potential vehicles for
transformation, while digital platforms are the enablers. Strong emphasis
is also put on data.

Fig. 5. Digital Enterprise Framework by Accenture. Source: Accenture.

The IBM Institute for Business Value developed a framework that focuses
on the process of transformation, explained through three paths (IBM 2011).
Path 1 – Focuses on creating and integrating digital operations first.
Path 2 – Enhances, extends or reshapes the customer value with digital
content.
Path 3 – Builds a new set of capabilities around the transformed value
proposition.

Fig. 6. Digital transformation framework by IBM. Source: IBM Institute for Business Value
analysis.

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 114 Dorota Zimnoch

9. Suggested Conceptual Framework for Digital Transformation

in Transportation
Research has been done in a focus group at one of the leading
transportation companies, where eight top executives, representing a mix
of business, technology and support functions (i.e. HR), reviewed the
selected frameworks and suggested the one that would be suitable for the
transportation organization.

The discussion was guided around the following questions:

– Does it support the company strategy?
– Does it place customer at the heart?
– Is it easy to implement?
The pros and cons were captured during the discussion:

Framework Pros Cons

PwC + It is rooted in Industry 4.0, which relates – Not clear where the customer is positioned
to the transportation industry – Seems to be driven from technology
+ It allows to approach DT as a staged process and not business perspective
+ It positions data as a key capability – Not intuitive to implement
+ It includes emerging technologies and is up to date

Cognizant + It positions customers at the heart of transformation – People and culture are not addressed
+ It takes business perspective, includes the whole – Not clear how to apply through stages
organization of digitization, digitalization, digital
+ It is intuitive and can be applied to transportation, transformation
e.g. connected products are linked with the trend
of connectivity
+It emphasizes role of the ecosystem and partnerships

BCG + Focused on outcomes – Not clear where to start and how

+ Incorporates human and technology perspective to execute
+ Builds on existing elements – No clear process of defining and managing
+ Promotes agile ways of working priorities
– Not clear how to apply through stages
of digitization, digitalization, digital
transformation

Accenture + Suitable for transportation industry – No easy step-by-step process

+ Covers both, internal and external perspectives, – No staged approach
positions customers at the heart
+ Prompts executives to ask relevant questions
and lead analysis

IBM + Clear directions of how to apply through stages – No emerging technologies specified
of digitization, digitalization, digital transformation – No listed criteria and measures of success
+ Parallel focus on customer and business outcome
+ Allows for building on existing assets while creating
new
Tab. 2. Pros and cons of digital transformation frameworks. Source: Own analyses, based on focus group discussion.

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Digital Transformation of Transportation in the Age of COVID-19 115

Having assessed the proposed frameworks, the experts agreed that the
IBM framework allowed most flexibility for adoption by the transportation
industry. It incorporated a staged approach to transformation. It also allowed
for the transformation pace to be adjusted to the strategy, abilities and
maturity of the organization. The following modifications were suggested,
which are finally reflected in the proposed conceptual framework presented
in Fig. 7.
1. The IBM framework positioned transformation at the heart of the
concept. The experts argued that at the heart of every business is the
value creation, hence the transformation should be closely linked to
such business objective. Hence, value creation should be positioned as
the key objective of transformation.
2. Further, the IBM framework suggests that transformation as a process of
reshaping the operational model or changing the customer proposition.
However, in practice, in complex organizations, transformation
cuts across operational and value dimensions. Hence, the proposed
framework incorporates three stages of digitization, digitalization and
digital transformation. The experts agreed that digital transformation is
not so much about technology as it is about people. This is in line with
the findings of a survey conducted by Harvard Business Review, which
states that “70% of all DT initiatives do not reach their goals. Of the $1.3
trillion that was spent on DT in 2018, it was estimated that $900 billion
went to waste. Fundamentally, it’s because most digital technologies
provide possibilities for efficiency gains and customer intimacy. But if
people lack the right mindset to change and the current organizational
practices are flawed, DT will simply magnify those flaws“ (Tabrizi et
al., 2019).
3. Hence, the stages of transformation should be paced with account
being taken of the maturity of technology as well as the maturity of
competencies across organization. For a successful digital transformation,
leading to value creation, it is important that the organization invests
in development of digital capabilities. Moving towards digital means
abmindset shift, cultural change and adoption of new methods of working.
In times of COVID-19, a prompt response to challenges required
organizations to set up cross-functional task force teams that, via
abcollaborative approach, were able to address challenges and leverage
new ways of working characterized by agility, speed and innovation
(ADEPT LIVELabs, 2020). A pragmatic approach and time to market
become key drivers for developing new solutions.
4. Such transformation is led through a change management process. At the
first stage, Awareness, employees are explained why change is required
and what it means to them and to the organization. It is also when the
company conducts a skills gap analysis to identify which competences
must be nurtured or brought to the organization. In the next stage,

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116 Dorota Zimnoch

Acceptance, employees are empowered with the tools and resources

enabling them to embark on change. It is a stage where employees
buy-in into a process of change. Finally, with an increasing confidence
towards digital they enter the Action stage and take ownership and
responsibility for the actions. This is where the organization is ready
for disruptive changes, such as launching new business models.

Optimze and enhance

solution with convergence
of technologies

Fig. 7. Digital transformation conceptuel framework. Source: Own concept, inspired by

IBM Institute for Business Value analysis, IBM 2011.

For the full picture, it is also important to acknowledge the enablers of

the process, such as data and selected technologies. The Strategic Transport
Research and Innovation Agenda (European Commission, 2020) defines the
aim of digital transformation as increasing value creation and allowing an
organization to remain relevant, competitive and effective. In the context
of the transportation industry, the emerging technologies can contribute to
the “improved traffic flows, optimize the use of infrastructure, lower noise
levels, shift greater volumes of passenger traffic towards public transport,
increase the efficiency of goods transport and foster the emergence of
multi-modal transport solutions”. This is where data lakes, cloud computing
as well as emerging technologies like: AI, IoT, blockchain, etc. should be
analyzed, and leveraged, where applicable.

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Digital Transformation of Transportation in the Age of COVID-19 117

Closing Remarks
COVID-19 has created the opportunities for the transportation industry
to accelerate digital transformation. Some of the trends, such as new and
remote ways of working, or near-shore supply demands are believed to
stay and become a “new normal”. Those companies that will continue
transformation by investing in new capabilities, emerging technologies and
partnerships will be able to gain competitive advantage and create greater
value for their customers and shareholders. For, as Steve Jobs once said,
innovation distinguishes between a leader and follower.
When got right, transformation will bring benefits for the planet, people
and profit, creating transportation that is safer, cleaner and more efficient.

Acknowledgements
This research received no funds.

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