How many organisational leaders truly understand what digital transformation entails? And how are they responding to the increasingly urgent need to develop a digital-first model, often fundamentally different to the way their organisation has grown up?
According to Econsultancy’s executive vice president for digital transformation Peter Abraham, in order to be a truly digital-first organisation, digital must not be considered as a channel or a secondary bolt-on, but should be internally front and centre and embedded into any customer or audience-centric initiative.
Sounds great, but the mammoth task of undertaking digital transformation can be overwhelming. After all, digital transformation can’t be considered as a one-off phase. In an environment where technology and customer expectations are constantly evolving, businesses will increasingly find they need to be able to pivot in different ways, time and again.
With the infrastructure of cloud and mobile now in place, it’s easier for smaller more agile businesses to create a niche profitable business from a slice of a larger business. Airbnb and Uber are just the start. Customers have almost unlimited choice, are constantly connected and have the power to bury a business with social media. The need to create an evolving, agile business model has never been more urgent.
In many ways, the principles of digital transformation allow businesses to step back and ask fundamental questions about their customers and the product or service they are delivering. As Mr Abraham points out: “For the businesses we work with, digital is absolutely front and centre, your business strategy has to be ‘digital-first’.
For a business to be truly innovative, they must have the wherewithal to disrupt their own business
“Look at what’s happening around you, understand where you need to be, with input from everyone in the business, with the customer at the centre and digital as the driver for the ultimate customer experience. This needs to be iterative, it’s not like anything we’ve seen before, you can’t do it once and say ‘that’s that done then’, that will leave you open to disruption and disintermediation.”
This concept of “disruption” is fundamental to the digital transformation narrative and the need for innovation in order to compete with the Airbnbs and Ubers. Econsultancy sees many businesses that are still product centric or where their business models result in them leaning back to product. Therefore, for a business to be truly innovative, they must have the wherewithal to disrupt their own business.
Innovation needs to come with the customer at the centre, having a customer-centric culture, and an internal structure with transparency and openness to ideas that benefit the customer. Smaller team structures with key resources coming together for specific tasks makes them more agile to enable smaller more quantifiable changes.
Mr Abraham says: “We’re seeing everything from incubators, labs, reverse-mentoring and acquisition of startups. Using data and customer insight to test hypotheses is better than fostering a culture of failure. Terms like ‘fail fast’ can easily be taken out of context. Everything can and should be measured in an iterative cycle.”
It’s clear that technology has played a central role in driving digital transformation, but Econsultancy is circumspect about the way it should be perceived by business leaders. While it provides automation and efficiency, ensures we are always connected – not just individuals, but the devices we use being connected to alert – and, in some cases, is changing industries, such as insurance and automotive, thanks to telematics, it’s important to define it as just one component of true digital transformation.
As Mr Abraham points out: “Don’t confuse technology-led as ‘technology-first’, that’s a very different thing.”
Econsultancy has been helping organisations and individuals to succeed online since 1999. Its digital transformation programme helps companies identify the gaps between where they are and where they need to be, then closes them, by addressing strategy, people, processes and technology.
To learn more about Econsultancy’s digital transformation services, visit econsultancy.com/training/digital-transformation/
