FUTURE FOCUS - Get digital to be digital
This is a question we pose in Beyond 2020: Helping you embrace transformation.
to be digital:
How immersing yourself and your organisation in technology is key to
creating an agile business
Where is tech
This is a question we pose in Beyond 2020: Helping you embrace transformation.
In this fourth part of our Beyond 2020 series, we explore business leaders’ approaches to, and understanding of, technology – and how building a culture of curiosity and disruption is the key to business success.
Customer experiences today are shaped by technology. We’ve seen that digital advancements have created an empowered consumer who expects more than ever in terms of products, services and experiences.
Yet despite technology’s ubiquity, using it effectively is becoming an increasing challenge to business leaders.
This statistic indicates that the industry is still looking at digital as an add-on rather than the backbone of everything we do.
It’s time for us to ditch the word and focus on the experience that technology today can deliver.
The playing field will be defined and dominated not by organisation size or capacity for IT investment, but ‒ much as in the natural world ‒ by the ability to adapt.
Research shows that in less than a year the number of senior leaders who say they’re not confident in their own digital skills has risen from 28 percent to 37 percent 1.
New models, new challenges
The last two decades or so have seen a dramatic shift in the marketplace. Technology has enabled forward-thinking companies to diversify with ease, and the likes of Amazon and Alibaba have upped the ante for everyone.
Indeed who would have predicted that an online bookseller and modest B2B platform would become the world’s largest e-commerce businesses in the world – Amazon dominating North America and Europe, and Alibaba holding the China market – and together commanding $1.1 trillion in market capitalisation?2
The opportunities technology brings mean it’s difficult to know who the new market entrants will be and how they will transform existing processes or experiences.
Your next big competitor is just as likely to be a company or person you’ve never heard of as an established big player, and the best indicator will be how they use technology.
The frictionless experience
Tech-driven companies have revolutionised the nature of customer interactions, and that means customers have realised exactly what a good experience looks like.
To stay with the e-commerce example, the large majority of us use Amazon.
They have our address and credit card details, and within a couple of clicks we can order something that’s delivered within 24 hours to our home or work address, or even to a friend or family member complete with an optional note and gift wrapping.
The process is fluid no matter what device you’re using, working in the same way across your mobile phone, iPad or laptop. Plus, our preferences are stored and we get suggestions that are relevant and that we might not otherwise have considered.
It’s actually just too easy not to use. And that becomes particularly apparent when you try to use an alternative that doesn’t quite hit the mark.
Personal details and preferences aren’t stored, payment card details have to be entered multiple times, delivery delays and excuses, inaccessible user interfaces.
It’s frustrating – and this is friction first-hand. When contrasted to the easy, personalised, value-added Amazon-esque experiences, it is obvious which will make customers return again and again.
Simple, good interactions build loyalty, and loyalty drives revenue.
This is why technology has to be front and centre – not an add-on to business strategy.
Amazon and Alibaba together command $1.1 trillion in market capitalisation 2
To “get” digital, you need to “be” digital
If you want to get your head around what Blockchain can mean for your business, what do you do? Go and read about it online, maybe talk to your tech team? Or sign up with a service provider to play, test, even break some basic services?
It’s actually this latter approach that is the key. You need to live and breathe what you’re doing.
You can’t just read about it: you have to actually experience it. And the evolving DevOps culture not only facilitates this, but it is also teaching us that fail fast is the quickest, most effective way to innovate.
Testing, falling down and starting all over again is an integral part of the language of the agile business.
Using technology uninhibited – without fearing failure – is the only way to understand how it works and therefore what its potential could be within your organisation.
The most important thing here is that this isn’t just the role of the IT team.
Every department, team and function has to “get digital” in order to create an innovation culture – and it needs to be driven from the top.
This is why digital diversity is an essential quality to have on any board, helping to develop a company-wide culture that values curiosity, questioning, learning and disruption of the status quo.
A digitally diverse board should include the more traditional, established C-suite who have business, operational, and financial know-know, as well as the younger generation of digital natives, who more naturally see the world through a digital lens.
Being digital at the core delivers competitive advantage beyond better services for consumers and increased revenues – it also gives your organisation the ability to attract the best talent.
In the scrabble to get digital, we’re seeing FTSE 100 companies throw money at the problem, with estimates that enterprises spent $3.5 million on average in 2018 on cloud apps, platforms and services 3.
Building your agile, competitive new business
Realising your company’s digital transformation doesn’t mean abandoning legacy infrastructure. Unless you’re a startup, it’s unlikely you can build your infrastructure from scratch.
On the other hand, rip and replace isn’t an option budget-wise for any but the biggest spenders, and, more importantly, it isn’t a wise option.
In the scrabble to get digital, we’re seeing FTSE 100 companies throw money at the problem, with estimates that enterprises spent $3.5 million on average in 2018 on cloud apps, platforms and services.
But this expenditure isn’t necessarily being made with a deep understanding of the technology or what it can do for their businesses.
Technology is changing quickly. It is the companies that learn to adapt the infrastructures they already have that will thrive, not the ones that tear down and rebuild every time a new wave of technology surfaces.
Making investments that count requires complementing existing infrastructures with emerging technologies – whether that’s AI to improve customer service or data analysis tools for personalised experiences.
We’ve already identified that new service-based models allow rapid testing of new solutions, backing up a fail-fast, fail-often culture without massive spend or complete infrastructure overhaul.
The real challenge in the evolving digital landscape will be systems integration: understanding how to make emerging technology work efficiently with traditional infrastructure.
3) IDG’s 2018 Cloud Computing Research
IT is fundamental to delivering a frictionless experience, one that will see your customers coming back time and again. That is why IT is everyone’s concern.
Business leaders need to immerse themselves and their entire workforce's in digital if they are to make the right technology decisions and create the frictionless experiences that attract customers and drive revenues.
In 2018, enterprises spent $3.5 million on average on cloud apps, platforms and services 4
Directives from the top, however, are of limited value unless your people are encouraged – through having the time and tools – to get to grips with new technology and how it can help them do their jobs more effectively while adding value to the organisation.
Agile, as-a-service IT is the key to delivering the experiences that consumers demand, and it also shows current and prospective employees that yours is a forward-thinking and doing company.
The upshot is, if you don’t have a strategy that embraces digital, you don’t have a strategy. Now, it’s time to drop the word “digital” and just get on with business.
Key actions for business leaders
- Think startup.
The major players today started as individuals or small teams of people with a simple consumer-focused idea and the enthusiasm to explore new technologies to realise their goals.
They continue to thrive because they have the same approach, learning continuously and always looking for new ways to deliver better services to customers.
Outcome: By adopting an agile approach, you can adapt more readily to market changes and deliver the products and services your customers expect.
- Don’t think start up!
Success is about integrating your existing technology with new – not about rip and replace. With the current pace of change, no business can afford to throw out the old every time technology evolves.
Outcome: Making the most of your existing technology and all the knowledge and expertise that surround it will mean you benefit from the best of both worlds.
- Try the tech.
What do your customers rate as an awesome experience? What does that mean for your company’s future? Where do you want your business to be in five years’ time?
How do you propose to take it there? What and where are the changes in processes and policies that will have the most impact on customer experience?
Outcome: Approach digital as a new language to be learnt. It’s a common misconception that technology is hard – the reality is it’s easier than ever to pick up and try technologies, whether that’s programming languages or big data analytics tools.
Embrace and propagate the mindset that testing, failing and repeating is the backbone of the agile business.
- Build diversity in management.
A board made up of millennials isn’t the answer. Neither is a room full of established C-suiters who remember a time before apps and self-service IT.
Understanding the impact of decisions requires combining knowledge from all experts across your business, and seeing your organisation through a digital lens.
Outcome: The breadth and depth of expertise you have to call on will translate into smarter decision-making and a bigger competitive advantage.
Invest and support your people.
A recent survey found that employees rated the use of the latest digital tools (80 percent), an innovative culture (72 percent) and a company’s reputation as a digital leader (62 percent) as three of the top factors that would influence their decision to join a firm.
You should aim to hit the mark in all three.
Outcome: Prioritising training and digital literacy will reduce your attrition and attract the high-potential employees, which provides you with an edge over your competitors.
4) IDG’s 2018 Cloud Computing Research