How do we better capture and utilise our data? How do we attract customers across omni-channels? How do we keep ahead of our competitors? Jonathan Lemer discusses tactics for keeping abreast of evolving techniques and technology.
Everybody knows the world is changing and no business is immune. The forces of technology and the inevitability of Moore’s Law are fundamentally altering the environment all companies are operating in. The pace of change is such that the nearest parallel, the industrial revolution, was positively glacial in comparison, at least ten times slower by most estimates. Technology is advancing exponentially and in the landscape of the 21st century, business has taken on a dramatically different look and feel.
Business leaders are hearing the term ‘digital transformation’ with increasing frequency. But, for all but the most dynamic start-ups, is there a more disconcerting term in today’s corporate lexicon? For all organisations, the stakes are massive. Disruptive technologies and business models are transforming entire industries, placing most companies, the traditional and the innovative in equal measure, in a constant state of disquiet.
The travel industry has been up-ended by digital transformation as travellers have learned how to plan the perfect DIY journey via the internet instead of the high street travel agency.
The travel industry, for example, is unrecognisable from its state at the turn of the millennium. Traditional travel distribution in which high street travel agencies played a dominant role was revolutionised with online travel agencies and direct distribution through airlines and hotels’ websites acquiring a key role. Those high street travel agents who did not react quickly enough often went out of business, while at the same time new opportunities and models arose – Airbnb being a notable example – to cater for a generation of DIY travellers who plan, manage and book travel online.
Airbnb takes travellers on a different voyage of discovery.
Most leaders understand roughly what digital transformation pertains to. How do we better capture and utilise our data? How do we attract customers across omni-channels? How do we mitigate against the threats of new players in the market, who possess leaner, pioneering business models? Companies are acutely aware that over the course of the next decade it will probably not be enough to just be engaging with digital, they will have to become digital enterprises.
The issues for many businesses lies in the difficulty of understanding what practical steps they can actually take to leverage all that this brave new world has to offer and not be left behind. Part of the malaise felt by leaders, especially those who know wholesale change is required, is simply that it can be difficult to figure out where to begin. There is such a large proliferation of technologies, software tools and concepts – not to mention the fact that these developments touch so many parts of a company’s operations – that all too often paralysis can set in.
The first step for organisations both small and large is to attempt to demystify what is going on and bring structure to their thinking. It is important to work out precisely what areas in the universe of tech present threats and where the good opportunities exist. For SMEs, this may be as simple as understanding how they can utilise SaaS tools to power their digital marketing. For larger corporates, it becomes as critical as thinking through how they need to upend fundamental elements of their business.
The three main areas that business leaders need to be considering are customer experience, operational processes and business models. Technology is revolutionising how businesses understand their customers and the potential for engagement across customer touchpoints. Digitisation and automation can transform operations, allowing companies to spend more time on strategic tasks which themselves can be radically optimised by tech. Digital can mean redefining the core value drivers as well as how functions work and interact.
There are a number of guiding principles that companies wishing to embrace the digital transformation should take into consideration:
1 Be informed at all times
It is important to constantly stay vigilant and alert to developments in the market. Specifically, businesses should review the new frontiers where change is brewing, examine how this could affect elements of their own business and maintain an information flow so they can respond positively. Companies need to cast a wide net and look far beyond their own industry or sector: digital disruption does not respect boundaries.
2 The Periphery is as important as the Core
In an environment of near-constant flux where the churn rate of skills is so fast, it is critical for companies to access external expertise to catalyse new ideas and challenge existing paradigms. For some businesses, it can even be advisable to maintain a core team, but have the majority of staff in the ‘periphery’ in an on-demand capacity rather than as traditional employees. This approach can provide remarkable agility as well as cost-savings and ensure that complex digital tasks are undertaken by specialists rather than employees who may not possess the targeted skillsets required in a specific situation. The structure can be complemented by a disciplined ‘test and learn’ approach and the utilisation of cross-functional teams when figuring out customer strategy, optimal internal process and value propositions. At Brainbroker, we regularly help businesses access external freelance ‘experts’. Marketing, which is increasingly technology-led, is one such area where businesses can derive an enormous amount of value by using freelance specialists to stay ahead of the game in areas such as SEO and Mobile.
3 Customer journey is king
All companies know that customers hold the key to success and, while it may be a truism, customers can act as a really valuable focus point in which to anchor decisions on tech and transformation. Companies should review their decisions and actions against data from across the customer journey – including cohort analysis, conversion patterns and customer engagement levels – as well as the broader competitive environment. Given that the average brand sees upwards of 80 per cent of its revenue come from 15 to 20 per cent of its customers, few insights effectively drive success like simply identifying a brand’s best customers. While most businesses can name their best-performing product or store, few can identify their best customers. This insight delivers deep understanding of customer behaviour and preferences, allowing the brand to personalise engagements, enhance experiences and shape marketing strategy.
4 Leverage tools
Digital advances are no more apparent than in the myriad tools and SaaS products that combine big data, analytics and elements of machine learning. These can range from tools that help companies understand and track their customers at scale, to those that help them use data to drive strategic ‘blue sky’ decisions. To give a simple example, one of the most popular tools that we recommend to our clients is a content automation tool called Passle, which helps business leaders create content and share to the right audience, all in a couple of minutes. After integrating Passle into their marketing efforts, companies quickly see tangible impact in terms of SEO improvements and website hits and a far better ROI than if they were to spend hours crafting content and share it arbitrarily. In general, the right product can be transformative to the efforts of small businesses and corporates alike and the benefits felt in both hard cash savings and revenue growth. It is early days and the majority of business leaders simply cannot comprehend how far-reaching and advantageous these tools can prove to their bottom line.
Research by Capgemini reveals that companies that have kept abreast of technology are more profitable than their competitors.
Change is upon us and digital transformation is ultimately the only game in town for organisations that wish to stay competitive. Typically, those companies that are more ‘digitally mature’ end up out-performing those that are not. According to a recent study by Capgemini, companies which are more mature in their digital transformation are on average 26% more profitable than their industry competitors. They generate nine per cent more revenue through their employees and physical assets and and they create more value, generating 12% higher market valuation ratios.
Overall, it is important that companies look for the opportunities inherent in digital and there are opportunities a-plenty. Organisations that stay focused, open-minded, curious and embracive of tech will likely swing the odds of disruption in their favour.
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