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Digital Transformation: The new reality born of necessity
29 Jul, 2020
“There is no alternative to digital transformation. Visionary companies will carve out new strategic options for themselves – those that don’t adapt, will fail.”
– Jeff Bezos, Amazon

Over the last several years, much has been said and written about the need for organisations to embrace digitalisation, but for many organisations this has been a “..we will get around to that later..” scenario.

Reasons differ across organisations, but for many it can largely be attributed to a combination of bureaucracy, organisational DNA and preference for the status quo with short-term benefits, versus being relevant over the long-term.

This posturing is now over.

With the advent of covid-19 pandemic, organisations are forced to act out of necessity.

Some thoughts and observations

Adoption of Digital: Consumers continue to adopt digital technologies faster than most organisations, resulting in a misalignment between consumer needs and service provider capabilities. Consumer behaviour has changed and consumers expect their service providers to embrace digital too – anytime, anywhere, and on any device.

Observation #1: Misalignment and ignoring changing consumer behaviour by larger organisations, is an opportunity for new savvy entrants to disrupt an industry and shift focus to delighting customer across the entire customer journey.

Offerings and Business Models: Many organisations continue to offer the same products, business models and are working through traditional analogue era channels. In some industries, the challenge is compounded by incumbents adhering to business models that are convenient for themselves, but to the detriment of the customer.

Observation #2: Organisations need to deliver new and differentiated offerings through new business models. Pay-as-you-go or as-you-use may work for disruptors but is difficult for many incumbents due to organisational structure, constraints and culture.

Personalisation: Many organisations typically have a one-size-fits-all approach to their offerings – marketing, sales and customer engagement – meaning that all customers are treated the same, irrespective of their needs or situation. A large number of organisations also still depend on “face-to-face interactions, even though most customers prefer doing everything on-line, at their convenience and through digital channels of their choice.

Observation #3: New entrants are data driven, 100% digital and have great insight into customer behaviour and needs, enabling a personalised customer experience at every touch point, and when required, are also adaptable based on real-time customer data.

Ecosystem: Some organisations are open to partnering with external entities but do so in a very prescriptive manner. In many situations, incumbents also prefer to develop their own products and services to expand into their existing markets.

Observation #4: Successful digital businesses leverage third party components, resources, networks and ecosystems to deliver new offerings through new business models. This is achieved through a combination of digital platforms, ecosystems (real-time marketplaces), ability to scale critical capabilities, dynamic product creation, allowing them to differentiate themselves from traditional businesses.

Fast go-to-market: With the focus on enhancing customer experience and quick delivery of new offerings through digital channels, IT must deliver new digital solutions but with the emphasis on agility, scalability, continuous change together with a fast to market approach. The challenge is that most IT organisations take months or years to deliver new solutions.

Observation #5: Digital era companies have fast go-to-market capabilities, enabled by cross-disciplinary collaboration between business, marketing, innovation, R&D and IT teams for building, evolving, operating and supporting rapidly changing resilient digital solutions.

Digital DNA: A significant challenge that results from organisations being slow to adopt digital technologies is they hinder their employees’ ability to engage with digital customers. Although some incumbents have digital as part of their strategy, it’s often a fragmented strategy, and one that is not pervasive across the organisation and core to their DNA.

Observation #6: Organisational culture is probably the single greatest challenge in executing a digital migration strategy. Digital migration is a collective and inclusive strategy requiring all levels and divisions to participate in achieving a clear end goal.

Successful digital businesses are wired to compete and win in a digital era. Their DNA is digital, with a digital-first mind-set, they employ digital savvy resources, ensure digital integration across all aspects of the business – and are focused on the customer experience as their key differentiator.

Closing thoughts

Great innovation thrives in difficult times

To compete, win and remain relevant in the new era,organisations need to be able to “successfully interact and transact with digital savvy users, and leverage the network effect to drive adoption” – A new challenge that requires a new approach.

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
– Buckminster Fuller

Written by Tony de Sousa

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