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Transportation Research Procedia 00 (2019) 000–000
www.elsevier.com/locate/procedia

13th International Scientific Conference on Sustainable, Modern and Safe Transport

(TRANSCOM 2019), High Tatras, Novy Smokovec – Grand Hotel Bellevue,
Slovak Republic, May 29-31, 2019

How digital transformation can influence business model

Case study for transport industry
Tatiana Genzorova*, Tatiana Corejova, Natalia Stalmasekova
Tatiana Genzorova, Univerzitná 8215/1, Žilina 010 26
Tatiana Corejova, Univerzitná 8215/1, Žilina 010 26
Natalia Stalmasekova, Univerzitná 8215/1, Žilina 010 26

Abstract

The digital disruption is a situation which occurs in nowadays business very often. With the development of
digital technologies, the classical system of doing business has been disrupted and many companies have to react to
digitalization. The digital transformation brings innovations not only into the delivering of product. The companies
are trying to rebuild a waterfall approach to agile by using a platform. The aim of this paper is to describe how the
transport companies which start their business before digital disruption can change business model according to
digitalization. It will include identifying current trends in digital transformation. The case study deals with the
process of designing the new tool for recording hours spent by the employees on the different activities or projects
typical for transport industry, value or supply chain of transport services and is based on the agile approach.

© 2019 The Authors. Published by Elsevier B.V.

Peer-review under responsibility of the scientific committee of the 13th International Scientific Conference on Sustainable,
Modern and Safe Transport (TRANSCOM 2019).

Keywords: digital disruption; agile approach; Design Thinking; digital workplace; transport

1. Theoretical framework

With the development of digital technologies comes disruption of previously well-established systems in many
sectors of society. An important part of successful digitalization is to use information technologies for turning
services to be modularly and inherently easy to adapt to 'building elements'. The invisibility of cloud computing
makes it impossible to capture this change in ordinary life. Many providers of these computing services, such as
servers, databases, software, storage, and various types of analytics on the Internet, have created quasi-catalogues
and markets for these digital components. Examples of such markets are Android. (Zeevi, 2013) Digital

2352-1465 © 2018 The Authors. Published by Elsevier B.V.

Peer-review under responsibility of the scientific committee of the 13th International Scientific Conference on Sustainable, Modern and
Safe Transport (TRANSCOM 2019).
2 Author/ Transportation Research Procedia 00 (2019) 000–000
transformation changes the principles of transportation, travelling without physical ticket or web application for
searching flight are nowadays really common thing.

1.1. What is digital disruption?

At present, this situation is called "digital disruption," which we can interpret as a digital disruption to the market.
The Oxford College of marketing defines this concept as a transformation that arose as a result of the continued
emergence of new digital technologies and new business models. The emergence of these innovations brings new
insights into the product, its production, and may even influence the value of existing products. Digitalization is
hindering the market that has been hampered so far and the consequence of this disturbance is the need to re-evaluate
the systems used so far. The disruption of the market is reflected in the fact that digital technologies can plunge into
the market much faster, and the modular features of the platform allow rapid and global adoption by users. This
raises the question of how to integrate these systems into the supply chain at multiple levels to achieve efficiency.
This fact leads to the creation of new business models with the attribute digital. (Phillips, 2007)
According to Microsoft (2019), architecture has become modular in the sense that it can be built from building
blocks of content - software and hardware. The disruption of the market is due to the fact that digital technologies
can move on to the market faster because modular adoption and digital platforms allow fast and omnipresent
adoption as users access services and use powerful work equipment. Multiple case studies show that embedded
technology professionals are looking for ways to integrate digital technologies into the supply chain to achieve
efficiency and new digital business models (Madlenak and Madlenakova, 2015).
According to James McQuivey (2013), every company that wants to be prepared for successful disruption at the
market should answer three basic questions:
• How can we adjust our company to change?
• For whom do we do it?
• How should the disruption of our company look like?

1.2. Digitalization of business model

According to Business model generation (Osterwalder, 2010), we can describe business model as way or path
how company can create, deliver and capture value.
Business model is divided into 9 Building blocks:
 Customer segments
 Customer relationships
 Channels
 Value proposition
 Revenue streams
 Key resources
 Key activities
 Key partners
 Cost structure
 Revenue streams

The Building block is characterized by certain features which describe the main definition of a business model
more properly. Also, we consider that business model is the way of entrepreneurship which creates, maintains or
keeps values important for company and customer (Canvanizer 2019). When improving business processes the
identification and visualization of business process as well as measuring and assessing processes play a major role,
Kovacikova and Stofkova (2016) and Fabus et. Al. (2016).
If the companies want to digitalize their business they should start to think about how to adjust employees for
change. (Berman 2012, Jabil 2019, DeNisco 2019) During the digitalization, human resources are the key element of
change. This statement enhances Gary Cole, principal of Deloitte's Human Capital Technology Strategy. According
to him a lot of companies are more focused on “digital being purely technology”. But the digital is not only
 Author/ Transportation Research Procedia 00 (
connected platforms, mobile or many other things which we can consider as digital enablement. He considers the
digital transformation as a change of behaviors and organizational structure. The research of American global
manufacturing services company Jabil said that the 74% of companies consider that the biggest challenge will come
from the cultural and organizational changes and 26% of companies are worried about the technology changes.
The best way is communicating the digital transformation to employees. In the public sector, in the utilities or in
the transport industry and services the human resources are considered as a key resource because a lot of work is
vested in them. The companies should consider the improvement of the workplace in a digital way. It is one of the
possible ways to start digitalising the company in the house.

2. The digital transformation with alignment of human resources

Many of the employees are worried, how the digitalization will influence their job in the company if they have the
right skills for this new situation. And other facts which are considered during the digitalization as time. The digital
transformation takes time and during the long process, the human resources can feel “in the shadow” of the
digitalization. The leaders have to stay transparent and communicate often to all staff members about the current
state of the process.
The strategy of change should be clear for everyone, not only for the IT department of the company. The
communication plan is a really good way how to ensure the employees that they are not out of this process.
Employees are obliged to deepen knowledge and learn the principles of safe work in the digital space Soltes et al.
(2016) and Stalmasekova, Genzorova, Corejova (2017). The answers for following questions should be discussed
very often:
• What do we understand under digitalization and digital transformation?
• What is the current state right now? Clarification of timeline.
• Which kind of technologies will be applied?
As mentioned above, the employees should take part in digitalization actively, not only as an audience. Every
company has to deliver some valuable products or meantime minimum valuable product. One of the possible way to
keep employees’ attention is to make them part of the designing minimum valuable product or final products and
services. Of course, IT human resources must be involved in digitalization, but any employee can have a valuable
impact on changing the processes, especially if we consider improving the digital workplace.

3. Methodology

In the context of the organisation, agile is the ability to create value and then continuously gladden the customer
while encouraging and responding to change in its environment. Agile means “moving quickly “or “flexible”, as the
meaning it also work like that. In other words, agile development is a modern approach which deals with inspection,
monitoring, and self – organization, rapid delivery of quality software and approaches to customer needs with
company goals. Agile software development is described as iterative and incremental because all phases are revisited
throughout the life cycle. (Thakur, Kaur, 2013) In a simple way, the agility means that if the organisation is able to
change in some way to be closer to the customer, it will benefit.
But first some background of agile. In 2001 Manifesto for Agile Software started out to use Agile approach in
software development. The Agile approach is the response to challenge the traditional, linear “waterfall” approach.
Waterfall approach keeps the task in a linear way what means that the team can get to the next stage only once the
previous is complete. In practice, if there are some reviews and requirements for change, the whole process has to
start again. Waterfall keeps the project deadline on the time because the outcome is known at the beginning. On the
other side, the biggest disadvantage is no chance to change something if the stage of the task is completed. If there is
a bug or issue the task must be restarted, which means unexpected expenses. The project is divided into separate
stages and performed by different teams and the situation brings a lack of communication which causes
misunderstanding errors.
The Waterfall methodology should be used when the clear view of results is provided and there is no change in
the development process.
4 Author/ Transportation Research Procedia 00 (2019) 000–000

Fig. 1. Waterfall approach vs. Agile approach

The agile methodology is a response for fixing the problems with Waterfall approach. The philosophy of agile
lies upon flexibility, what is the biggest difference between agile and waterfall (Relihan 2019, Sam Solutions 2019).
The agile process is open for changes and results are achieved under continuous improvement. The team has to
prefer face to face communication which keeps interaction between team members on the high level. The really
important feature is client/ user participation which keeps their feedback and influences the final version of the
product. Each spring in the agile approach ends with testing, which keeps the higher quality. All of the features
guide the team on what needs to be changed or altered to make the product more successful. Of course, there are
some issues which make agile hard to use. The agile process is more time- consuming and demand more active
participation of team members.

4. The case study from European agency from the transport industry

The case study is used to the process of designing the new tool for recording hours spent by the employees on the
different activities or projects typical for transport industry, value or supply chain of transport services (Madlenak,
Drozdiel el al. 2017). The Agile approach has been implemented in the project which is focused on designing a
better user experience in order to give the user the opportunity to register quick and easy hours spend on daily
activities. For the pilot project, the team tried to work agile combining Design Thinking with Scrum.
The first phase of the project was divided in four two- weeks Sprints (according to Agile., 4G Clinical 2019). The
first Sprint ended with Design Thinking workshop composed of the selected user and then next Sprints ended with
Feedback workshop of validating MVP.

Table 1. The description of Design Thinking Workshops and results

Sprint Aim Result

Design Thinking Workshop 1 Bring the business outcome New tool needed
Feedback workshop no.1 2 Introduction to the 1st prototype design Validation of prototype design
Feedback workshop no.2 3 Explanation of proposed solution Validation of proposed 75% solution
Feedback workshop no.3 4 Beta Testing Validation of 100% solution

The first Design Thinking divided all participants into 2 groups. The result of the workshop were requirements of
employees for the new system in accordance with the problems the employees had with an old one. Table 2 shows
the main issues of the system and proposes a solution of a new tool which is developed independently from the old
system. The new tool is designed and developed according to the principles of User Experience. The reporting of
activity in the institution has to be intuitive, easy to perform and less time-consuming. The main aim of the tool is
the support of Time Management of employees and record the activity to the system.
 Author/ Transportation Research Procedia 00 (
Table 2. Visualization issues of system

Old system problems The proposed solution

Not user friendly SAP design New own design with principles UX developed in house
Many column to fill with the number of Drag- drop approach of project
projects
No possibility to search Explanation of proposed solution
Long way to save Auto- saving of tool
Several windows on one page Timesheet in one window

For designing a new system is needed to understand who the main user is and what his behaviour is. An approach
of Richard Caddick and Steve Cable For is used to the creation of a persona. The persona is a fictional character,
which is created based upon research in order to represent the different user types that might use the service,
product, site, or brand in a similar way.
The anatomy of persona contains:
• Key Goals – What does the user want/ need to do in the tool?
• Behaviour – What is the motivation of the user for using the tool?
• Must Do - The simple description of user needs.
• Must never - Avoiding any of the points which can confuse the users.

Fig. 2. The proposed persona for tool

6 Author/ Transportation Research Procedia 00 (2019) 000–000
5. Conclusion

Digital disruption means a radical break from the existing processes in the industry, even in the transport. In
the digital age, disruption usually comes from new-internet enabled business models that are shaking up
established industry structure. Disruption influences all operating practices and also the employees that are
participating in these processes. For most companies, people are the most important asset. (Stalmasekova,
Genzorova, Corejova, 2017) They are on the front lines especially in services including transport services and
hold power to transform a customer’s experience. They can give vital input and feedback to the company.
Human resources have to play an active role in helping employees embrace the workplace impacts of
technology. The employees should take part in digitalization actively, not only as an audience. The return on
investment for employee experience and motivation will drive growth in the digital age. This is a data-driven
era, and perhaps we can´t even imagine how far can consequences of digital transformation reach. Therefore,
in identifying a change in behavior, we have focused on people in the transport company business models.
Part of the change is also a consistent tuning of tasks and performances to individual processes in the
transport company. The use of data is a way to change the assignment of individual activities and processes to
individual employees. Consequently, quality assurance and responsibility for the quality of the services
provided will also be affected. This greatly changes the business models and communication between
employees and management as well as the clarity and allocation of each employee's contribution to output.

Acknowledgements

This contribution was supported by the project VEGA 1/0152/18 Business models and platforms in digital space and
VEGA 1/0518/19 Research of the digital economy development and its impact on the competitiveness of enterprises
in the knowledge based society.

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