How to Drive Digital Transformation

This is the final installment of a 3-part series. Read part 2 here.

Adapt what is useful, reject what is useless, and add what is specifically your own.

Bruce Lee

Digital Survival: Customer Demands, Process Orientation, and Innovation in Business

So what exactly is it that companies like Domino’s and Home Depot are doing to yield such amazing results in the midst of such challenging and changing market dynamics? How does an organization go about developing an effective digital transformation strategy?

Brian Rashid offers some interesting guidance. There are three key fundamentals that help drive a Digital Transformation strategy. Companies can put themselves in a great position to be successful by focusing on:

  • Process Orientation: Process digitization and employee enablement that promotes data-driven decision-making resulting in greater performance improvement and overall operational transparency.
  • Innovation in Business: New digital products and/or digitizing existing business models that goes beyond existing business needs and foster new innovative products and service and cater to changing business needs.
  • Customer Demands: Providing customers with a delightful experience in every aspect of delivery. Gain customer loyalty in a way that customers speak of your brand.

To be clear, Digital Transformation is just a catchphrase. GE refers to it as the “The Emergent Era”. Accenture calls it “The Era of Living Services”. I’ve heard it called “The Era of Digital Echoes”. Gartner refers to it as building a “Digital Platform”.

The primary objective of developing a Digital Platform is to attract customers looking to use the ecosystem. This is accomplished by knowing, protecting, and engaging with customers in their native digital environment.

It doesn’t matter what you call it. We’re living in an incredibly unique and dynamic time. It’s a period defined by the emergence of new ways of doing things. A new customer lifestyle. And it’s happening, at a pace that’s extraordinarily rapid. So much so, that these new patterns aren’t fully formed yet, the systems they’re replacing are waning and in some cases gone completely.

This is all great news. It’s an amazing time to demonstrate leadership, both for individuals within an organization, and for the company itself in the marketplace.

Established companies have the opportunity to embrace basic innovations that are powering the digital economy. Digital natives like Uber, Airbnb, Netflix and Spotify, have successfully attacked the taxi, lodging, movie/television and music industries by meeting customer needs in new ways and taking advantage of technological innovation. Equally important, these companies have created new operating models and cultures.

It’s about increasing efficiency and agility with operational excellence, while creating customer-obsessed experiences that grow revenue and re-invigorate your business. The bottom line is, what are your customer demands and expectations of the business (and the demands on technology to meet business needs)? Customers demand increased technological capabilities combined with the desire for ease of use.

Key questions to consider… what are you doing in terms of contextual communication? How are you adapting to liquid customer expectations? How are you working to broadly apply new ways of working, new levels of customer service, and new technology platforms to the organization?

According to Gartner, Enterprise Architects define Digital Platforms. They advise CIOs about digital business strategy, innovation, and enterprise change. An important consideration they must factor in are the key technologies that will keep their organizations advanced and competitive.

Having a digital platform strategy expands and evolves the opportunities, threats and constraints of business ecosystems. With more than 30 billion devices connected to the internet by 2020, the complexity will only increase, and CIOs will play an integral role in setting the framework for businesses.

However, according to the 2017 Digital IQ Survey from PWC, the top performing companies realize a comprehensive plan extends far beyond IT and tend to have broader definitions of digital, encompassing customer-facing technology activities. They extend beyond technology and into their organizational mindset. In fact, just 16% of top performers say digital is synonymous with IT (the most basic description), compared with 30% of other companies.

Technology by itself is not the real disruptor. Being non-customer centric is the biggest threat to any business.

Forrester report from June 2016 found that only 7% of brands are exceeding customer expectations when it comes to delivering on the digital experience consumers would like to have. A full 25% don’t meet customer expectations. And while 81% believe it is important to engage directly with customers, only 57% of brands actually are. Those who are succeeding, understand that “CX is an organizational mindset, not a series of projects.”

4 Key Pillars of CX High Performers

  1. Executive alignment: senior leadership has bought into and wholly embraced the importance of CX
  2. Adapt to a dynamic state of constant flux: speed and agility helps them keep up with, and ultimately outpace, a constantly evolving customer
  3. Data-driven: they view data and analytics as critical to driving digital engagement
  4. Partner: they actively seek out and secure partnerships

Satya Nadella, who has done such an incredible job as CEO of Microsoft, says digital transformation “requires building out what we refer to as systems of intelligence — digital feedback loops that help you better engage with your customers, empower your employees, optimize your operations, and reinvent products and business models. These systems of intelligence encompass your people, processes and technology. And they will ultimately define your competitiveness and ability to change the landscape of the industries you participate in.”

And then he promptly announced “partnerships in two industries ripe for transformation: automotive and financial services.”

Be Where Your Customer Is

So what’s an easy way to get started? Well… where is your customer? How are you providing flexibility in the customer experience and anticipating their intent? What are the key objectives your company has for improving CX?

In 2013, 33% of the global population owned a smartphone. That increased to just over 50% by 2015, and will reach 80% of the world population owning a smartphone by 2021.

  • There will be 6.1B mobile phones by 2020 (70%), which will actually overtake basic fixed phone subscriptions
  • More people have access to mobile phones today than toilets
  • Mobile devices will account for 73% of Internet consumption in 2018
  • SMS marketing has a 98% open rate vs Email

According to comScore’s 2017 Cross Platform Future in Focus report, the average American adult (18+) spends 2 hours, 51 minutes on their smartphone every day = 86 hours each month.

https://cdn-images-1.medium.com/max/800/0*3MieEivzk3ToL1x6.

At 97% usage by consumers, SMS is the single most-used feature (Pew Research Center, 2015). A whopping 80% of people are using SMS for business (eWeek, 2015).

As a Verified Fan, Ticketmaster knows what events and concerts I like to attend. They’ll text me a link to purchase a ticket. When I arrive at the venue, I can use Ticketmaster Presence, which has replaced paper tickets with the digital passes, to access the venue. Talk about flexibility. Anticipating intent. Delivering a liquid customer experience. This is a great example that incorporates all 3 key fundamentals mentioned earlier. Born out of data-driven decision-making, they digitized an existing business model (paper tickets), and created a new model that delivers a delightful customer experience.

The investment companies will make in connecting with their customers is projected to expand from $800M in 2017, to $8B by 2021. How are you tapping into this tremendous opportunity?

Businesses thrive when leaders figure out how to drive performance benefits from their investments in digital tools and technologies. There will be “haves” and “have nots”. If they aren’t careful, many businesses will be disintermediated from their customer.

To quote Tom Goodwin… “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.”

Uber did not kill the taxi business. Limited taxi access, fare control, and poor customer service did.

Amazon did not kill other retailers. Bad customer service and experience did. Amazon has made the ecommerce experience a delight. Shop from anywhere — know when your packages arrive — users receive SMS notifications and actually look forward to see them come through on their phone. Amazon is delivering a truly interactive customer experience.

Netflix did not kill Blockbuster. High late fees and lack of flexibility did. They adopted a convenience store strategy and naturally the same kind of culture developed as well. “Blockbuster thought it was in the entertainment distribution business, but it was really all about retail customer experience.”

History provides us the lessons to learn from. Careful consideration, planning, and focus on execution will help ensure longevity and success in an increasingly complex and demanding business environment. Where does your business stand in this process!?

Will your company be part of the top cohort that leads the way, or the bottom that is left behind?

If you found this interesting or relevant, I’d love to hear from you. Please share any thoughts you have on the topic!

About the Author:

Andrew Elliot

Andrew Elliott helps business leaders drive digital transformation to improve performance and deliver customer-obsessed experiences. In his downtime, you’ll find Andrew plotting his next adventure to distant lands, probably in a vineyard or on a beach. Follow him on Twitter: @4ndrewbiz.

Revolutionize. Chasm crosser. Tech cowboy, Wine enthusiast, avid Traveler, Footballer, Health and Fitness nut. Eternally curious.

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All views and statements expressed are his own and do not reflect those of his clients, employer or his employer’s clients. Nor are they likely to be all that original- as shrewdly observed by Samuel Clemens and Jim Jarmusch… we’re all basically regurgitating someone else at this point.

References

Digital Transformation And Innovation In Today’s Business World
When businesses and the way they operate shift from their traditional mode of operation and management to the modern…www.forbes.com

A top GE executive says organizations must prepare for the “Emergent Era”
In the wake of Brexit and the election of US president Donald Trump, it’s clear that big global changes are afoot. But…qz.com

The Era of Living Services and Digitalization | Accenture
Learn how Living Services can harness the digitization of everything and liquid consumer expectations to creating the…www.accenture.com

https://www.linkedin.com/pulse/era-digital-echoes-general-martin-e-dempsey/

Every Organization Needs a Digital Platform Strategy – Smarter With Gartner
Learn how to explore, plan, deliver, and evolve your digital platform strategy. Digital business expands and evolves…www.gartner.com

Enterprise Architects Define Digital Platforms – Smarter With Gartner
The role of enterprise architecture and technology innovation leaders is evolving to support digital business…www.gartner.com

6.1B Smartphone Users Globally By 2020, Overtaking Basic Fixed Phone Subscriptions
Today there are 2.6 billion smartphone subscriptions globally, and while growth has been levelling off in developed…techcrunch.com

https://www.linkedin.com/pulse/digital-transformation-satya-nadella/

Two-thirds of adults worldwide will own smartphones next year
Two-thirds of adults worldwide, 66.5 percent, will own smartphones next year, according to new forecasts from media…www.recode.net

SMS Marketing Wallops Email with 98% Open Rate and Only 1% Spam – Mobile Marketing Watch
No one doubts that email still works. Marketers around the globe are using it every day to promote brand messages and…mobilemarketingwatch.com

2017 U.S. Cross-Platform Future in Focus
In this report, we will examine some of the most important sectors of the cross-platform media landscape in 2016 to…www.comscore.com

U.S. Smartphone Use in 2015
Key Themes of This Report 10% of Americans own a smartphone but do not have broadband at home, and 15% own a smartphone…www.pewinternet.org

Google Commits $300 Million to Fight Fake News, Aid News Organizations
The Google News Initiative extends Google’s commitment to news publishing industry cope with challenges to their…www.eweek.com

Twilio Cloud Communications – APIs for Voice, VoIP, and Text Messaging
Messaging Dominates Consumer Communication Preference, but Most Businesses Aren’t Equipped to Support that Experience…www.twilio.com

How Ticketmaster’s Verified Fan program toys with the passions of fandom
Verified Fan is not only a successful integration of fan club ticketing practices; it’s a brilliant branding move for…www.theverge.com

Ticketmaster Presence: When tickets go digital, event going gets better
Live entertainment has enamored fans for thousands of years. Iconic events, that captured the imagination, shaped…tech.ticketmaster.com

The Battle Is For The Customer Interface
Editor’s note: Tom Goodwin is senior vice president of strategy and innovation at Havas Media. Uber, the world’s…techcrunch.com

Related Resources

How the Meaning of Digital Transformation Has Evolved
Executive Summary Think back to 2007. A young senator named Barack Obama announced his candidacy for president. The…hbr.org

How Much Time Do People Spend on Their Mobile Phones in 2017?
We’d all agree that people are on their phones “all the time.” But what does that look like in minutes and hours? How…hackernoon.com

Daily SMS Mobile Usage Statistics
It’s official-mobile use is now prevalent throughout internet users and businesses. Most people would respond to this…www.smseagle.eu

How Many Texts Do People Send Every Day?
People text all the time! Obviously. Just look around. But how many texts do people send every day? Let’s look at the…www.textrequest.com