From American Airlines to LEGO Group, these companies cut costs and streamlined work by bringing their processes into the digital age

General Electric may have been the first American company to go digital when it installed the UNIVAC I computer in 1954. A relatively simple machine, the UNIVAC I computer could handle payroll processing, run manufacturing control programs, and play classical music. The resulting efficiency boost set a powerful example, showing the world the benefits of going paperless in business.

Since then, companies around the world have raced to bring their processes into the digital age. Along the way, they’ve set powerful examples for small and mid-sized businesses to follow. Here are some of the great paperless pivots from throughout the history of digitization.

5 companies that show the benefits of going paperless in business

1. American Airlines

Although it’s getting harder and harder to remember, booking air travel once required calling the airport and talking to a human being. That reservation agent would write your information down on paper cards and store it locally. The flaws in the system were obvious. It could take hours to make a reservation as callers queued to book. Plus, agents couldn’t easily check whether seats had already sold, which led to double-booked seats.

The slow process of change began in 1953, when IBM salesman R. Blair Smith was seated next to American Airlines president C. R. Smith on a flight. After connecting over their shared last name, C. R. complained to Blair about the sorry state of airline reservations. In response, Blair Smith told him about IBM’s work on a computer that could store passengers’ names, itineraries, and phone numbers. C.R. was intrigued, and shortly after committed around $40 million to joint research and development with IBM.

The result was the Semi-automated Business Research Environment, or Sabre. Suddenly, reservation agents could use computers to record, save, and retrieve data on reservations made anywhere in the world. The system was a huge success. By the mid-1960s, it handled 7,500 reservations an hour and had slashed processing times from 90 minutes to just a few seconds.

2. LEGO Group

By 2004, the LEGO Group was in dire financial straits. The expiration of its patent protections had led to a flood of copycat products. To compete, the company had leaned hard on new product offerings. It grew its offerings from 6,000 stock-keeping units (SKUs) in 1997 to more than 14,000 in 2004. Many of these new products needed specialized materials from new suppliers, leading to the logistical nightmare of more than 11,000 unique suppliers.

As if the complexity of the supply chain weren’t bad enough, LEGO Group also had little insight into store demand and inventory levels. Without that data, it struggled to operate efficiently. In 2003, the company suffered $228 million in losses on sales of just over $1 billion. Something needed to change.

That change started with new CEO Jørgen Vig Knudstorp, who took over in January 2004. Knudstorp diagnosed the supply chain challenges and set about solving them. He knew LEGO Group had started using System Applications and Products (SAP) around the turn of the millennium. This digital system was intended to standardize processes company-wide. Instead, it rarely made it out of the finance and sales departments.

Knudstorp made SAP adoption a priority. He turned it into a digital home for all of LEGO Group’s logistics data and then used that data to finally enact the standardization the company so desperately needed. It was only by digitizing its data that LEGO Group could view it in its totality, and streamline supply chains accordingly.

Knudstorp’s efforts were a success. Thanks to them, LEGO Group saw an 11% increase in revenues from 2005 to 2006.

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3. Pfizer

Vaccine development is a complicated process. For much of its history, the process has relied on physical tools. Whiteboards, sticky notes, and regular meetings all served critical roles in a process that could take as long as 10 years.

When the COVID-19 pandemic began, Pfizer knew it didn’t have that long. Every moment of delay meant more damage to people’s lives. Speed was of the essence. At the same time, its workers couldn’t meet in person. If they did, they’d risk spreading infection themselves.

To solve both problems, Pfizer developed a new set of digital tools that it called the digital “cockpit.” This platform let key stakeholders view end-to-end manufacturing and supply data in real time. It didn’t matter where they were or when they needed it. That powered faster collaboration across all stakeholders.

Once data was centralized, the cockpit could also use artificial intelligence (AI) to detect potential problems in the production line. For example, if the temperature in a freezer full of vaccines fluctuated, the AI could instantly spot the anomaly and alert key team members. Those team members could then solve the issue before the freezer warmed up, saving countless doses from failure.

But Pfizer’s innovations didn’t stop there. The company also built out an operations dashboard, which provided workers with a single source of truth for all data related to vaccine production, testing, and distribution. Workers could spend less time gathering data and more time using it to improve their work.

By combining these innovations (along with several others), Pfizer was able to bring its first vaccines to patients faster than ever before. Instead of taking a decade to develop, Pfizer signed its letter of intent with BioNTech in March 2020. The first dose was administered just nine months later.

4. Nike

Going paperless is only one part of digital transformation. Once a company has digitized its data, the benefits of going paperless in business open up new opportunities for success.

When John Donahoe became CEO of Nike in January 2020, he had a singular focus: customer data. Traditionally, Nike had sold its shoes to retailers. Those retailers then sold the shoes to customers. The system worked, but it put a hard restriction on what kind of data Nike could collect from its customers. That made it harder to understand what they wanted from Nike products. In the age of personalization, Donahoe saw that as a weakness the company couldn’t ignore.

Using a strategy he called Consumer Direct Acceleration (CDA), Donahoe pushed Nike to focus on direct-to-consumer channels. These allowed the company to collect far more data about its customers, from promotional preferences to ideas for new products. The goal was to use this new data to improve inventory management and the customer experience, leading to higher loyalty rates and more repeat purchases.

Mobile apps formed a cornerstone of CDA. Both the Nike app and the shoe-focused SNKRS app allowed customers to buy products directly from Nike. They could also sign up for access to exclusive deals on merchandise. For customers, that meant a more pleasant shopping experience and a deeper connection with the Nike brand. For Nike, it meant a plethora of first-hand data to help guide future strategy decisions.

Nike’s transformation is still ongoing, but its apps helped drive an 18% annual growth in digital business in the fourth quarter of 2022.

5. HSBC

In 2017, reporting revealed that Russian criminals had used an elaborate scheme to launder more than $740 million worth of currency. They used several British banks to do so, largely without the knowledge of those banks. Of that $740 million, nearly $543.3 million had gone through HSBC. Having so much illegal money move through its system unnoticed lit a fire under the bank. Its leadership decided to turn this unfortunate incident into an opportunity to improve the processes it used for spotting — and stamping out — financial crime.

Before “Global Laundromat” (as the scheme became known) was discovered, HSBC was one of the many banks that used human staff to try to spot money laundering. As important as the work was, it was time-consuming and rarely effective. At the pace of electronic banking, there were simply too many data points for humans to consider.

Rather than double down on this inefficient workflow, HSBC partnered with a tech start-up called Ayasdi to apply AI to the problem. This gave the bank two key advantages: reach and speed. AI’s reach far exceeds that of human inspectors. Automations can pull data from geolocation tagging, IP addresses, and a wealth of other sources to spot fraud and cut down on false positives. Just as important, it can do so at blinding speeds. Fraud inspections that could have taken ages instead resolved in seconds.

This new approach gave the bank the tools it needed to modernize its anti-fraud efforts.

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Our recommendation: fi-800R

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