Business leaders and executives from global companies in all industries and regions are experimenting with – and benefiting from – Digital Transformation. They are digitally transforming three key areas of their enterprises:
- Customer Experience
- Operational Processes
- Business Models.
Transforming Customer Experience
The majority of customer interactions are becoming digital. Digital channels are gaining more and more importance for customer interactions. Email, social media and now messaging emerged as alternatives to phone calls. Customers are used to these channels to communicate within their private circle and expect to use the same with companies. More adapted to customers’ lifestyles, these channels allow them to contact brands on their own terms. While the phone is still used, there is a general decrease in its use.
The three major building blocks with which businesses are digitally transforming Customer Experience are Customer Understanding, Top-line Growth and Customer TouchPoints.
Customer Understanding
Customer understandings is all about learning everything you need to know about your customers, i.e., their needs, their pain points, the jobs they are trying to do, etc., and their current experiences in order to deliver the experience they expect. The possibility of customers being treated as unique individuals, and knowing their personal preferences and purchase history can only be possible through digital.
Some studies outline this evolution: by 2022, Gartner predicts that 72% of customer interactions will involve emerging technologies such as messaging, mobile applications and chatbots, up from 11 percent in 2017. They also expect that, by that time, phone conversations will make up merely 12% of customer service interactions – vs 41% in 2017.
Top line growth
With digitalization, the use of demographic and social data to make pricing decisions is now occurring on a massive scale. Companies are doing exactly what traders and salespeople have always done, but instead of making assessments based on look and feel, they’re using data in real time on a massive scale. As such, companies now have the power to implement far more tailored marketing and promotional activities. They are better able to understand customers’ willingness to pay through accurate customer segmentation, with differentiated packaging, price models and price levels to match.
Customer Touch Points
The growth of digital does not only require an adoption of new channels but also a completely new approach. The new challenge for companies is to go beyond Omni-channel to offer multi-experience.. This means being able to provide seamless and effortless experiences across all digital touchpoints. It becomes evident that customers are not thinking in terms of “channels” anymore: they naturally choose the contact method that is the most convenient to them.
To adapt to this evolution, brands must adopt an Omni-digital strategy, that allows you to centralize the management of channels. With this approach, silos disappear and agents manage any channel with a single tool.
Customer touch points are your brand’s points of customer contact, from start to finish. For example, customers may find your business online or in an ad, see ratings and reviews, visit your website, shop at your retail store, or contact your customer service. We don’t know what customers’ preferences will be tomorrow: by becoming channel-agnostic, brands gain the flexibility to easily deploy new touchpoints where and when customers expect them.
Transforming Operational Process
Digitization can enable companies to refocus their people on more strategic tasks. HR function can easily be centralised, allowing economies of scale through self-service while freeing HR people to focus on enlarging manager skills, rather than counting days off. R&D processes can be automated allowing researchers to focus on innovation and creativity rather than repetitive efforts.
Process Digitalisation, Worker Enablement and Performance Management: these are the 3 major building blocks with which businesses are digitally transforming Operational Processes.
Worker Enablement
Since the pandemic, we have seen individual-level work has, in essence, been virtualised separating the work process from the location of the work. Employees now work from home one or two days per week. Meanwhile, the company’s collaboration and networking tools allow employees to talk with anyone in the organization from wherever they are sitting. This is setting the stage for further changes related to globalization.
Virtual tools have not only been implemented for cost reasons; they have become powerful enablers for knowledge sharing. Employees are beginning to benefit from collaborative tools and increasingly gaining access to a single, global view of the company’s interactions with a customer.
Performance management
Executives are beginning to have deeper insights into products, regions and customers, allowing decisions to be made on real data and not on assumptions. The level of detail is also increasing, allowing managers to compare status across sites or reallocate product manufacturing capacity in ways they could not do before.
Beyond being better informed, digital transformation is actually changing the process of strategic decision-making.
Transforming Business Models
Companies are not only changing how their functions work, but also redefining how functions interact and even evolving the boundaries and activities of the firm.
The 3 building blocks of business model transformation are: Digital Modifications to the Business, New Digital Businesses and Digital Globalisation.
Digital Modifications to the Business
Digital transformation helps businesses stay competitive in this environment. Those that can transform effectively will survive, thrive, and succeed. Companies that are too slow to adapt will lose their edge in the marketplace. It’s not about changing the way we do technology but changing the way we do business.Today’s businesses are finding ways to augment physical with digital offerings and to use digital to share content across organisational silos.
Traditional businesses are using digital to transform a new growth business while e-commerce platforms are not only increasing the number of new customers significantly but also increasing traditional clients. Other businesses are building digital or service wrappers around traditional products; a business credit company is developing a digital business for some credit products that requires less involvement than their traditional high-touch offerings.
New Digital Businesses
Companies are also introducing digital products that complement traditional products. For example, a sports apparel manufacturer started selling GPS and other digital devices that can track and report on a customer’s workout. Other companies are changing business models by reshaping their boundaries through digital: a mortgage company is moving from being a link in the Value Chain to being a Global Assembler of investment products; an airport authority is aiming to become the owner of a traveler’s end-to-end process by providing an integrated multichannel experience, including information on airplane traffic and reservations, duty-free shopping promotions and other benefits.
Digital Globalisation
Companies are increasingly transforming from multinational to truly global operations. Digital technology coupled with integrated information is allowing businesses to gain global synergies while remaining locally responsive.
These companies benefit from global shared services for finance, HR and even core capabilities like manufacturing and design. Global shared services promote efficiency and reduce risk. They even promote global flexibility: one manufacturer can shift production around the globe with only a few days’ notice in response to interruptions or excess demand.
Conclusion
Digital Transformation requires a refined vision for the parts of the company you want to transform. Whether it is in the way individuals work and collaborate, the way business processes are executed within and across organizational boundaries, or in the way a company understands and serves customers, digital technology provides a wealth of opportunity. There is no company transforming all at once, but the best-managed firms are constantly identifying new ways to redefine the way they work in the new Digital Era.
