Digital Transformation has been the hotly debated business trend of the past 18 months, and no doubt will echo loudly across the next few years to come.
It has now trickled down as a need amongst CEOs of established legacy and household brands, and the clock is ticking on their response and approach to warding off threats of new entrants whilst simultaneously grasping the growth opportunities offered by digital that their investors demand.
For many, the challenge is not only significant, but worryingly, it's also poorly understood, especially in regard to what is required to reverse years of poor and / or under investment, to put their business in a competitive position. Being competitive means having an adaptive business model with the capability to devise solutions at pace that address a business' current and future needs, whilst simultaneously winning in a disrupted and economically challenging business environment.
And this leads us onto strategy to deliver this transformation - taking a clear position and perspective to create positive change, steeped in insight and which looks beyond the nose of the organisation itself, underpinned by clear and tangible objectives, and clear actions to deliver. In our view, this is a business-focused strategy that incorporates and exploits digital throughout the entire operation and not just at the point of customer engagement. And for many, therein lies the key problem, and one that requires addressing.
The clamour for fame and notoriety to lead the digital frontier has largely landed at the feet of marketers -
"it's digital so it must be driven by those who own the point of customer engagement". The rise of the Digital Director has largely been filled by Marketers and any resulting digital transformation strategy focuses squarely on the Customer Experience (CX) agenda and typically goes no deeper than digital "marketing" strategy.
In no way does it address the deeper need for an organisation to rethink and evolve, marginalising the need to address business models and the operational transformation that must be top of every CEO and CIO respective agendas. Producing a new app, a rebranded website, chatbots, more programmatic, is not a strategy; it's an approach that superficially papers over the cracks creating greater disconnect with the business' foundations, and one that will soon fall apart when it comes to doing things faster or differently, to repel the next wave of industry disruptors.
Testament to this problem is evidenced in a 2017 Gartner survey of CEOs -
only 22% of respondents believed they were "taking digital to the core of their enterprise models" i.e. 78% are just focusing on CX and marketing, and not equipping the enterprise with the foundations that will enable it to connect directly with both its customer AND partner ecosystem, the technologies they use and will be using in their everyday lives, and business operations.
So there is a clear need for a focused Digital Business Strategy - a strategy that bridges the CX revolution and the wider enterprise, and one that fundamentally answers the question of
"how to tackle the rise of consumerism?" alongside
"how to shape a business operation to not only get ahead, but stay ahead of the competition?" These are questions the CMO cannot answer themself; it's a fundamental business and mind set shift from a
"what can we sell, in this way?" to one of
"what will the customer need from us now and in the future, how will they consume it, and will we fulfil it in the best way possible?" The CEO and CIO
must come to the digital transformation party.
So, what do you really need? Well it requires a strategic business rethink about the opportunities to be gained from digital, and how they will be achieved. Whether adopting an overall strategy of attack, defence, growth and/or optimisation, any business must set a vision and plan as to how they will bring digital to the core of their business. The vision must define how it will harness the power of connectivity to reshape the way in which it serves its customers, bringing a new way of thinking to the entire organisation, from customer experience right through to operational productivity. In doing this it must consider:
Business Control & Intelligence - how it can monetise data and machine learning to create meaningful insights which drive assured decision making, from optimising sourcing and trade plans through to business growth strategies
Product and service innovation - how it will exploit digital to deliver new digital products and services that enable it to get ahead of the market
Distribution, Marketing & Sales - how it can leverage both internal business insights, mixed with those gained from external social, economic and market data to optimise its marketing mix with higher ROI, intelligently executing within the context of the moment i.e. the point of engagement with the customer
Digital Fulfilment - how it can reduce the cost to serve through identifying optimisation of its supply chain, reducing wastage and shortening the fulfilment process between customer and suppliers
Customer Experience - bringing everything together to make for a consistent customer experience, that's all it needs in many cases! To excel, look to surprise and delight the customer, from brand awareness through to post sale service
With a strategy that clearly articulates a vision and clear perspective of how to achieve it -and remember it's not just tech; people and process will need to change too - a business must execute with continual learning and optimisation. Avoid large, long running change programmes at all cost, they must be banished to the past; instead think 'incremental projects', that deliver value at every stage, that are measurable and visible in equal quantity.
Finally, remember this strategy is not a one-off process. 3-year plans in modern business are out of date usually within 6 months. To remain ahead, your strategy must remain a living vision that continually monitors the need, progress and outcome.
By taking this advice and approach, hopefully more CEOs will be taking digital past the Customer Experience agenda and into the core of their business model.