Just last week I completed a webinar where I spoke at length about the importance of having design thinking in the organisation’s digital transformation journey. However, I spent the first quarter of the discussion setting the context about digital transformation. A lot of people in the audience and business managers in general often confuse digital transformation with implementing frontier technologies in their respective businesses.
Managers, when they hear of digital transformation often connects it to artificial intelligence, machine learning, blockchain, cloud computing, RPA or other technical jargon. While technology implementation might form a key component of a company’s arduous digital transformation journey, it most certainly is not all encompassing.
This article explores the key aspects of digital transformation and how more often than not the technology component just forms the enabler of the transformation journey.
Pillar 1: Strategy: Establishing that digital solutions are embraced by all stakeholders
Before rushing to implement technologies that would solve short-term problems, executives and stakeholders should take a step back to fully realize what going digital means. The success of today’s most valuable companies such as Uber, Netflix, and Airbnb is not due to just having an app. Rather, it is the radical rethinking of their business in the transportation, entertainment, and accommodations industries (respectively) while utilizing technology to be able to scale or as a channel to deliver more value that have made them giants today. Executives and decision-makers should have regular discussions about the current state of the business, and then revisit how their business fits in their industry. Some helpful questions during these sessions could be:
- What are we doing now?
- What are we best at doing now? Can we build on it using technology?
- Are there emerging needs that we can answer through technology?
The leadership and decision-makers should also pave the way for the rest of the company to participate in the transformation of the company and rethinking policies and processes. McKinsey’s 2016 study shows that 70% of digital initiatives fail due to company cultures and practices that don’t allow for collaboration, clear communication and experimentation. When even rank-and-file employees and middle managers understand the company strategy, vision, and direction, they can become more empowered to make customer experiences more delightful while ensuring operational efficiency.
Pillar 2: Digital Experience: Connecting directly with customers and partners in various ways
When customers feel that the company goes out of their way to make even tedious transactions smoother and more seamless, they tend to talk about their experiences more positively. The more positive experiences a customer has with a company, the more likely that they will advocate the company to their network and the stronger their loyalty to the brand. Conversely, the worse the experience, the more likely they are to spread the negative experiences leading to a huge impact on direct and indirect sales.
Through various technologies such as chatbots for customer support and mobile apps for self-service, customers can get the information, products, and services they need much more instantaneously. This can also lead to shorter consideration periods, positive feedback and ratings, and more business from these customers and their networks.
Pillar 3: Core Systems: Boosting operational efficiency and productivity
Amazing customer experiences can only be delivered when back offices run as efficiently as the customer facing offices. When combined with rethinking processes, technology can improve revenues while lessening cost. Having systems for important back-office processes such as procurement, finance, and logistics can simplify and speed up processing times needed to support the business. In addition, robotic process automation (RPA) can ease workload and congestion by doing manual, repetitive, and error-prone tasks. This frees up internal employees to focus on more meaningful work such as data analysis and work which might be more suited to their skillsets.
Pillar 4: Data Utilizing real-time data to enrich experiences and guide strategy
Agility is key to keeping up with disruption, and this is only possible if leaders and decision-makers utilize their data for planning and strategizing.
Leaders have to revisit the way they view their data and how they interpret it, and to be mindful of biases that might cloud their judgement. Rather than using data to justify past decisions, they have to revisit, redefine, and recalibrate –if needed- the current purpose and desired outcomes for their customer and their business both for the short-term and long-term. Only then can they come up with key business questions which when answered by data, can point them to insights that would allow them to quickly decide which actions to be taken to align themselves to their purpose or desired outcomes.
Pillar 5: Cybersecurity – Safeguarding digital assets and ensuring business continuity
A 2017 survey from PWC Australia shows that 87% of consumers will take their business elsewhere if they don’t trust that a company is handling their data responsibly. Beyond compliance to various laws which force companies to respect the customers data, companies should ensure that transparent, easy-to-understand policies are in place to govern data usage and access to build confidence and trust with their customers.
Crippling cybersecurity attacks should make it clear to decision makers to invest in more stringent cybersecurity measures, regardless of industry type. This would enable the business to mitigate cybersecurity risks efficiently and with minimal interruption. One example of speedy isolation and recovery was Boeing when some yet unpatched units were infected with the crippling ransomware. With all hands on deck and immediate application of fixes, the ransomware was contained and the rest of their military and service units remained unaffected.
Putting them all together
At the core of digital transformation is the customer experience and how the business can best position itself to improve their customer journeys. While there are various aspects to a digital transformation journey, businesses and enterprises should always go back to how they could ease their customers needs and pains through thorough review, data gathering, experimentation, and quick decision making. At a time when industries are being disrupted by technology and nimble startups threatening almost all aspects of your business, this article hopefully would form a guide to better understanding that digital transformation is not just about technology implementation, but putting the customer experience at the very center of all what the organization is trying to attempt.