So today, I wanted to talk to you all about digital transformation. The reason I’ve chosen this subject is because quite a few of our large clients are actually going through digital transformation at the moment, and we’ve started to get involved in their planning and the activities around it.
What I want to talk to you about today is what actually is digital transformation? Why has it become such a buzzword in the industry? What are the approaches that you can take; the typical ways that you can make it successful? I also want to talk about who’s done it well in the industry and then some of the common pitfalls that clients can come under and how to avoid them.
What is digital transformation?
First of all, what is digital transformation? This is the official description of digital transformation. The realignment of or new investment in technology, business models and processes to more effectively compete in an ever-changing digital economy. But what does that actually mean?
Well, for me, it’s really turning the whole of the big organisations on their head and actually making them have digital at the core of their processes. Whereas before, digital campaigns used to come at the end of people’s thinking and how they were going to drive products to the market, actually now we need to think about digital at the very heart. And that means a complete shift in the way big companies are thinking.
The future of digital transformation
Just to make it clear, in terms of how much of an emphasis there’s going to be in 2017, Forester predicts that it is going to top the billion-dollar bar in terms of the amount of budget that’s actually going to go into digital transformation this year. And 67% of CEOs say that it’s going to be a core part of the business strategy for 2017. It’s really being taken seriously within the market.
Why the sudden urgency? Well, customers are going through a hyper-adoption stage at the moment. Customers actually know more about products than large clients do. This means that they really are going to be taking on new products before companies have even started thinking about how they’re going to market through those products, so they need to be aware of it.
It’s also through the digital-led companies that have recently come through in the last few years. They have started taking opportunities that more traditional clients are losing. If you think about Amazon within the retail space, Airbnb within the hotel and accommodation space, and Uber within the travel space and the taxi area, they’ve actually started taking revenue from people that aren’t taking digital seriously within the client space. It drives results. The people in the companies that have actually taken digital transformation seriously over the last two to three years, they’ve already started seeing an uplift in engagement, conversion and, ultimately, in revenue for their products.
Approaching digital transformation
How do you approach it? Well, these are my key components for good digital transformation to happen. At the very top end, you’ve got the overall digital transformation strategy, and the clear driver behind this is very senior leadership. This isn’t something that can be driven by bottom-down within client organisations. This has to be senior led and it has to have the engagement behind it.
Then I’ve put together my three key pillars that I think are important for success. They’re driven around customer focus, operational excellence, and an updated business model. Then, underneath all of that and driving it through, is digital capability across the organisation.
Three key pillars to success
Within customer focus, first of all, this is all around having that data to inform digital customer journey mapped out. I think where clients have gone wrong before is they’ve thought about their old analogue style ways, in which clients will find their products. Actually, they’ve got to think about the future and what products are coming out into the market. And predictive marketing, as well, with all of the data out there, we really need to start thinking about how predictively to think about how a customer’s going to find the products.
Then operational excellence. This is really around the infrastructure of a client. The amount of clients that I’ve spoken to where they want innovation and they want to be thinking digitally, but actually they haven’t got Wi-Fi across their organisation, or they’ve got a firewall, which means that some of their teams can’t even access their own website. They need to start thinking about this in terms of their infrastructure and how it’s going to drive teams to make changes.
The main thing for me is not to underestimate the culture change that’s needed within an organisation. So, there’s going to be teams that are very experienced and they understand all of the products and they’ve worked in the company for quite a few years, but actually are they digitally savvy? Do they know how those products are going to react in a digital world? Also, agile approach and connected teams. Thinking about that release-fast-and-learn-quickly approach so they can make the most out of new product innovation.
Then, an updated business model. Thinking about what digital products look like in the new world. Enterprise integration. So how integrated is your CRM system to all of the other customer platforms? And shared digital services. How much your team is interconnected on a daily basis. Then digital capability, which is all about training and education.
This is the set process that I would put in place. The first step that you should take for digital transformation is leadership and education. Digital maturity model, this is where you can start thinking about the “as-is” and thinking about where your company sits on the digital landscape. Thinking about where you are now and where you want to be.
The next stage you can move into is customer and product visioning. This is the exciting stage where you think: “Where are people going to find our products in the future?” Then it goes into planning and organisation. One of the key things for this is, once you start planning and organising for digital transformation, it doesn’t just stop there. This is actually a change ongoing. This isn’t just a project and a one-stop shop.
Understanding the pillars better
Now, I just want to talk about some of the areas and some of the questions that clients can think about when they start to think about those different pillars.
Customer focus, first of all. Think about actually, who is your customer? It might not be the same customer that you’ve had in an analogue world. Who is your customer in a digital world? Also, think about how existing and potential customers are finding your product. One of the most important things you can do, from a digital transformation point of view, is actually map your customer journey and make sure that you all become involved in that customer mapping process. Think about all the digital touch points that customer will have with your product. It’s not just a case of them coming online to your website. They’re actually going to be talking to their friends about the products. Think about all the different areas they’re going to be finding out and potentially buying.
Operational excellence. Some of the key areas that you can think about here is, what percentage of your operational process is digitised at the moment? Then, even further than that, what percent of your customer facing processes are digitised and available online? Then, how far does that extend along your supply chain? Think about the answer to all of those questions so that you have the base for where you are now and where you need to move to in the future.
Then, an updated business model. After you’ve done that customer journey mapping and you’ve thought: “Right, where are we digitally as an organization?” think about your product. Do you need to change your product plan based on the needs of your customers? Does it reflect the right pricing approach? Actually, will subscriptions work in a different way for you? And will it disrupt the market and take opportunity from your competitors?
Then, just thinking about digital capability, how digitally savvy are your teams at the moment? And don’t just think about your digital marketing team, think about all of the teams within your industry. There will potentially be some junior people that are more digitally savvy than the people in your marketing team. So, have a think about that and what opportunities that gives you.
Think about the analytics that you’ve got in place and are they used for actionable insights? It’s very easy to create more and more business information, but actually are you using it to your advantage as a company? And how integrated are your business and IT solutions?
Then, these are just some of the common mistakes that I’ve seen from digital transformation. Don’t assume where the knowledge it. As I’ve said before, some of your more junior members of staff could actually be more digital-savvy than some of your experienced members. There’s a real opportunity here to have connected clusters of teams and actually put those together so you create more opportunity.
Also, don’t follow the usual competition. It’s really important with digital to make sure that you’re innovating and actually your usual competitors might not even be in the digital landscape at all. What you’ve got to think about is the aspirational people, like Apple, like Google, like Amazon. Think about what they’re doing in digital and think about whether some of the tactics could actually work for you.
Don’t treat it as a one-off project. This is actually a constant change. Digital is now the world that we’re in, and it’s not something that just happens in a project and then it’s just left.
Examples of success
Who’s done it well? These are my top three. Lego, first of all. By 2004, I think it was, Lego was on a decline in terms of revenue. They weren’t doing that well as a company at all and, actually, the sales were going down. They started digital transformation from 2004 and they’ve been doing amazing work ever since. Anyone that’s got kids, they’ve even merged digital with their actual in-store experience. They’ve done it in a brilliant way. They’ve also looked at the way customers are actually interacting with their product, and that’s where their film strategy, etc., has come out. They’ve done it really well.
Burberry. They started a few years ago, in terms of digital first as a strategy, and they’ve completely revolutionised the way that their digital is working and they’re now a digitally-focused company.
Then, the last one is Starbucks, who, rather than just creating a customer app, actually turned an app idea into customer loyalty process and transformed from the point of view of a customer going into store. They actually had an app where you could order online. Through that it meant that the person got great customer service, but it also meant that they were gathering a great amount of data so they could do that test and release and make their products better for the future.
Then, I just wanted to leave on our role as an agency within this, because I know that it can seem like it’s something that clients will do, and we don’t get that involved, but actually, training and education, first of all. This is where we’ve really got to help support our clients. It’s not just going to be the digital and the marketing teams that are potentially going through this, so we need to make sure that we’re there to support for all groups and think about where we can help in terms of bringing their skills and training up to speed.
Then also, just stay connected and develop campaign strategies that are in-line with our overall business strategy. When we’re there talking with the clients and they’ve got this overall strategy of where they’re going to get to, we need to make sure that our campaigns are in-line with that and they’re really going to compliment the overall business transformation.