A combination of culture, people, processes and technology is needed
From FMCGs to financial services, and from telecom to retail, digital is penetrating all industries, but to different degrees. Now that the discussions about whether to invest in digital transformation has (almost) ended, the C-level discussion is focused on how to make the digital transformation happen before it’s too late.
Big changes mean big decisions; that is why hasty moves shall remain out of conversation. To deploy new capabilities quickly, companies need to integrate the new digital services with their legacy IT systems.
Data Activation & Personalization: The real game winner of the digital era
- Digitalized companies using real-time data to create more personalized and profitable customer experiences, have seen an increase of 15-20% in total sales.
- According to McKinsey, exploiting people analytics a company increased customer satisfaction by over 100% and sales by 5%.
How to achieve digital transformation: mindset – people – process – tools
- Start with the mission; not the technology
- Ask better questions; As the fomer CEO of eBay Kioskohn Donahoe has highlighted, other than treating new technologies as a way to develop more efficient answers to existing problems, the top management shall view them as opportunities to reconsider the problems themselves.
- Think broad; make sure you are considering all means of digital technology
- Find someone to guide you through the journey of digital transformation
- Use (existing) data wisely; bring in or train the right people
- Find (more or less) ways to innovate; your competitors are already doing so
- Partner with people and companies with a proven track record; competition exists among networks, not single companies
- Track performance and make it sustainable
Where is the (digital) focus?
As in every major investment and organizational change, companies shall not only carefully consider the “how”, but also the “where”; to put it another way, the areas in which they shall focus their digital investments. The below findings shed light on the dimensions that the companies are currently focusing their digital strategies:
- 49% on marketing & distribution
- 21% on product & services
- 14% on processes
- 13% on ecosystems
- 2% on supply chains
The focus on marketing & distribution is reasonable, taking into account the big impact digitization has already had on customer interactions. However, despite the fact that the focus on supply chains is very low, the survey suggests that the highest ROI is set to occur through the digitization of supply chains.
Organization-wide changes might last for a long to implement. Although digital transformation is a necessity, organizations cannot afford many years for their products and services to enter new innovation cycles. The competition and customers cannot (and will not) wait. A combination of culture, people, processes and technology is needed for an actionable digital transformation strategy.