Digital transformation - way forward

With massive investments in the last couple of years, the coming decade will see some of the most exciting, disruptive, and innovative possibilities. That’s the kind of headlines you read everywhere. No doubt Business leaders are under pressure to embrace, explore, invest in the digital space. The reality is some sectors have seen higher investment, better adaptability and faster transformation than others. Therefore, in specific sectors, digital transformation is not a choice, but critical to keep the organization relevant, adaptable and competitive amidst a shifting landscape.

Digital technologies are transformation and reshaping industries. The scale and curve of change have varied between industries and within industries between companies. New emerging trends in technology and digital innovation is changing the business at its very core. It's enabling new products and reinvention of service and experience. The ripple effect is already seen in retail, telecommunication, media, life sciences, banking, and many other sectors. Not just these, every industry is either at or near an inflection point for digital transformation. Depending on the industry and the size of the company, some businesses are still experimenting while others are building to scale. Many in the Small and Medium Enterprises (SME) segment are waiting and watching.

The benefits of digital transformation can be both reinforcing and lucrative, Transformative efforts can redefine a business’s approach to customer strategy, consolidate operations, improve agility and streamline the enterprise’s products and services. With so much of investments going into digital space, leadership is challenged to gauge if they are ahead of the curve or behind it. They have to invest to be relevant and yet unsure of the outcome they will achieve. Therefore, organizations have to learn to set long term goals, be agile in their approach, be ready to fail and be ready to experiment. There have been high-flyers who had experienced setbacks in the digital journey but then there are some great success stories to be inspired from.

Success Stories

As digital technologies reshape industry after industry, many companies are pursuing large investments efforts to capture the benefits of these trends. While a large section of these efforts has not succeeded, there have been some great success stories. There are many traditionally based businesses--companies that have embraced a digital transformation with open arms. These companies have incorporated omnichannel shopping experiences, investing in IoT sensors, leveraged data analyzation, and more. Their leadership is not afraid to shake up the status quo while keeping a keen eye on future technologies and trends. These companies have found a way to beat the competition and continue to delight their customers. Let’s look at some of the companies to understand what’s worked for them.

Disney Parks earmarked on a digital journey in 2015 and investment of $1 billion in IoT sensors to be used throughout their parks. Getting the technology into play, Disney created a MagicBand that guests would wear in the wristband. MagicBand wristband uses RFID technology, these bands act in multi-dimensional ways - as payment, hotel room keys, and ride tickets. Disney collects the data that helps the company find more ways to improve the user experience, to make their time in the park seem even more magical. Disney's strategy to drive technology to enhance the customer experience has been successful.

Domino focused on technology, transforming it from a fast-food business to create a digital platform to enhance its sales channel. Today four-fifths of Domino’s sales come from digital channels. The company changed the company’s entire ethos, investing in technology to drive change. With a focus on digital, the company changed its focus on sales and advertising and supported this by realigning its corporate structure. Embracing digital permitted, creating a customer feedback loop, Domino’s has moved to become the largest pizza company in the world. Customers can now order from whatever channel they choose (Slack, Facebook Messenger, the Company’s mobile app, on Twitter with the use of emojis, Google Assistant & Alexa, Smart TVs). These practices help to make the user experience more fun and less frictionless.

Walmart is building a fast-growing e-commerce business and also leads to digital innovations when compared to other brick-and-mortar retailers." Walmart has become customer-friendly, changing some of its policies, changing its online return policies, offering the lowest prices and promoting the fact that you don't need a membership to order online. Walmart has also diversified its offerings--buying up online brand names. Also, the Walmart mobile app continues to improve the customer experience. Once a customer gets to the store, they can interact with the app's "store assistant" to guide them to items on their list via a map. Online sales have seen year on year increase in the last 2 years.

What’s working

While each of the above companies uses different strategies when it comes to digital transformation there is one common denominator across the board: a better experience for the customer. These digital transformations are influenced by three factors – Customer behavior and demand, Technology innovation and external environment factors. The likelihood of companies succeeding in the digital journey is when the objectives are clearly defined, the customer is at the center of everything they plan and then develop operational capabilities around it. No matter how technology continues to evolve, organizations that focus on the customer will know the best ways to transform moving forward. My conclusion based on researching companies who have been successful in their digital transformation journey is that organizations have focussed on one or more of the following objectives.

·        Enhancing end-user experience to improve engagement, revenues, productivity, value and retention

·        Augmenting infrastructure and operations to improve responsiveness, flexibility, and cost-effectiveness

·        Streamlining process, reduce complexity, solve issues before they occur, gain visibility and control over assets

·        Deriving insights from analytics to make better decisions, improve efficiencies and gain competitive advantage

Steps involved in digital transformation

For many organizations investing in digital technology has become a two-edged sword. With low success rates, organizations need to understand that the amount spends on digital transformation may end up being sunk cost. Each industry is placed in different cycles in terms of digital transformation. Some industries have invested heavily in mobility, digital talent, internet of things and data and analytics while other industries are trying to catch up. The management has a critical point to answer – Where are they in the digital journey and if they are looking at investing, how do you start your digital journey. With a good amount of investment required and low success rates coupled with the financial crunch in the market, it's critical how the resources are identified and invested. For SME and many organizations, to begin their journey in digital space, it makes sense to partner with companies who have invested in digital assets. Reach out to companies with digital solutions, I call them the digital enablers. There are some smart solutions. One good way to kick start your journey would be to incorporate these solutions in a particular process, learn from it and then explore further.

For many business leaders, the question remains – with so much to cover, where do you start your digital journey? It’s critical to focus on what needs to be achieved, identify and allocate resources and have a defined roadmap. When the organizations are commencing their digital journey, they need to have the site of how the digital journey will change the product offering, the organization's impact and therefore very important to have the right team to execute the journey. Once you achieve your initial target, organizations can expand the cycle, set new targets, higher ambitious goals and realign the organization. So follow the six steps to have an impactful journey.

1) Identify Business Opportunities

2) Evaluate enablers - Resources and technology

3) Create Roadmap

4) Communicate the plan

5) Identify core team and execute

6) Expand the cycle

There are significant areas where technology and data could bring impact. It's critical what the organization wants to achieve and what direction they would want the digital strategy to move. We have also seen the digital transformation journey may not necessarily give the first-mover advantage. What’s critical is to get the right ingredients. So, look at what’s working for organizations, what’s not succeeded, the trends and how you can influence the outcome. It’s time leaders review, read, discuss and plan their digital journey.