Digital Transformation. Everyone seems to be pursuing it, buzzing about it, and yet its significance is not inherently understood. The multitude of definitions is rather confusing, but arguably the most straightforward one is, ’‘the realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle” (The 2014 State of Digital Transformation, July 21, 2014, Altimeter’s group.)
To simplify further, digital transformation closes the gap between the customer demands and the business delivery in the context of a digital business. You may think it is all about the changing technology, but this is only partially true. In actuality, the main driving force behind the digital world is the consumer.
Digital transformation is primarily about meeting volatile demands and catching up with the perpetual market motion.
The “Age of the Customer”, wherein consumers control their interactions with businesses, is characterized by eluding customer satisfaction and frequent shifts in demand. In order to attract, win, and retain customers, businesses need to first understand their expectations and behavior; Following, they have to quickly adapt. It’s vital for every business. But in cloud-based, subscription businesses, it is a matter of life or death.
Hence, digital transformation revolutionizes the way businesses operate, communicate and sell. Businesses must formulate the entire organizational, operational and technological processes as well as deliverables. They need to address constant evolution as well as cross-functional collaboration that cover the entire customer journey. It is an ongoing task that requires a continuous effort across the organization- keeping up with progressing technology, shortening the product lifecycle, improving cross organizational work processes and innovating on business models to speed up time-to-market and profitability. All in pursuit of the Holy Grail of digital: a more satisfying and profitable customer experience.
Businesses must react fast in order to stay relevant to their customers. But in order to do so, they must first understand where the problem. Is the customer using the product? Is s/he happy? Is s/he profitable? Is he about to churn? The only way to answer these questions is by collecting real time data about the service and the customer, who is using the service. In the case of industrial IOT applications, there is another important variable. Businesses must relentlessly measure every aspect of their business model, derive insights and make informed decisions that are critical to smart scaling and thriving in the digital world.
Digital transformation may be painful, but it’s a necessity. According to Gartner, “By 2017, digital business transformation programs with demonstrated faster payback will compress the cycle time of insight to innovation from days to minutes” (Make Business Operations More Agile With Intelligent Business Processes That Reshape Themselves as They Run”, November 3, 2015, Gartner). Adapting to ongoing changes requires agility. Flexible and iterative business operations that allow for a quick turnaround of build-measure-adapt, help businesses to continuously shift with product, customer & market demands. Keeping it simple, speedy and measurable is pivotal to managing the financial risk and growth.
Can your digital business keep up?