According to Gartner’s 2021 CEO Survey, one in five CEOs dwelt upon ‘digital’ when speaking about strategic business priorities for the coming years. In any case, while the future landscape is still a topic of debate, reimagining business models by building transformative capabilities is no more a sure-fire way to success. Instead, digital transformation leaders must adopt an incremental and sustainable approach and focus on key themes that are connected to quantifiable business outcomes.
In a 2020 BCG survey, business leaders across industries observed that digital transformation is no more about cost-cutting but has far more potential of moving the performance needle. CEOs are increasingly embedding digital transformation decisions in the core of their business to drive resilience and value.
Let us have a look at the top seven trends that are dominating the current digital ecosystem and have been instrumental in changing the rules of the game:
1. Superior data management
In its recently concluded Data and Analytics Summit, Gartner noted that organisations are increasingly realising the importance of creating a data-driven culture to carry out successful enterprise-wide digital transformation initiatives. This reinforces the fact that digital transformation today is not about technology alone – it is equally about visualisation and quantitative decision-making. At the heart of all this lies data that needs to be securely and easily accessible by everybody in the organisation. However, challenges around data accuracy, governance, and regulatory obligations prevent business leaders from leveraging the right data at the right time to drive business growth and deliver exceptional experiences. Here lies the importance of data management by finding, sorting, merging, and using optimised data for business objectives. Whether tracking accurate product information or driving personalized customer experience (CX), advanced data management is the cornerstone of successful enterprise digital transformation as it helps identify relationship patterns across various use cases.
2. Insights-driven decision-making
In the past decade, there has been an unprecedented expansion in data volume and complexity. At the same time, there has been a growing demand to glean an extensive variety of data from different sources to influence strategic decision-making. In a knowledge-based economy, this is critical for gaining a competitive advantage. Staying ahead of the curve depends heavily on the organisation’s ability to make insights-driven decisions rather than relying on business intuitions and past experiences. As most businesses have to deal with a number of variables, organisations realize the inherent value of strategic decision-making based on data-led insights. Business leaders are using the power of data to drive speed and accuracy for decisions and are capitalising on the collective power of business intelligence and data analytics to gain valuable insights that can fuel competitive intelligence. As more organisations rely on insights-driven decision-making, securing data and developing a strategic framework for analytics become more important for realising long-term value.
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3. Rethinking customer experience
Digital transformation essentially boils down to unlocking value for customers. McKinsey estimates that digital transformation initiatives that focus on customer-centricity increase customer satisfaction by 20-30% and economic gains by 20-50%. Organisations investing in digital transformation are looking to deliver innovative and seamless customer experiences in real-time. There is a greater focus on customer lifetime value (CLV) and the role of innovative customer experiences on long-term customer value. In a continuously evolving digital ecosystem, with no dearth of choice and convenience, customer behaviours are rapidly changing. In such a world, businesses need a holistic view of the entire customer lifecycle to go beyond transactional interactions and establish trust. Organisations are connecting each step in the customer journey to interact and understand prominent needs and gain an exceptional number of improvement opportunities. This is possible by implementing an automated data collection process and creating a universally available data repository for accurate, traceable, and updated information. Organisations are rethinking customer experience by mapping different ways of connecting with customers – from engaging early to providing seamless and consistent experience across all customer touchpoints.
4. Operational efficiency
One of the primary reasons behind all digital transformation initiatives is changing the way an organisation operates. Digital is all about optimisation of resources and the modus operandi to execute. Companies driving successful digital transformations achieve operational efficiencies through infrastructure modernisation, data-driven performance enhancements, digitisation-led process improvements, and workforce empowerment. New technologies and interactive tools allow businesses to modify their standard operating procedures and modernise legacy applications. Apart from improving customer experience, businesses are leveraging data to streamline operations and drive innovation at speed. By investing in digital technologies, businesses benefit through better data quality, streamlined business processes, and improved operational efficiency. Also, it allows complete visibility into end-to-end processes and helps automate workflows by eliminating manual, repetitive tasks. Effective data management minimises friction in the organisation, enhances operations, improves productivity, and lowers risk. By integrating digital technologies into core business functions, organisations are reinventing business processes to meet the demands of a hyper-competitive economy.
5. Collaborative culture
A BCG study revealed that culture-focused companies are five times more likely to achieve breakthrough performance than companies that ignored the culture factor during digital transformation initiatives. A customer-centric and outcome-focused digital transformation initiative entails embracing a culture of change, collaboration, learning, and improvement. Furthermore, as organisations embark on journeys of transformation, digital needs to touch the grass-root levels of the structure. Ever since an accelerated adoption of digital mediums is ushered by sudden necessity, everyone from the front-line workers to the C-suite executives need to be virtually present and well-versed with platforms of remote collaboration, communication, and connectivity. When senior business leaders promote a strong digital culture across the organisation, it can generate a lot of enthusiasm among employees and inspire them to experiment with innovation. Clear communication about aligning digital transformation goals with organisation’s core values helps in improving employee morale, retaining talent, and unlocking greater business value.
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6. Omnichannel engagement
With digital technologies proliferating, both at the customer’s and the company’s side of the spectrum, engagement channels are undergoing a huge metamorphosis. Digital transformation is revolutionising value chains and creating new business opportunities. Enterprises that are quick to appreciate this trend are leveraging data management tools to access customer information across multiple touchpoints. Having a holistic picture of customer likes and dislikes allows organisations to manage customer expectations better across multiple channels of engagement. Omnichannel compatibility is a precondition of successful digital transformation across industries today. Businesses with effective omnichannel strategies can easily track customer interactions across web, mobile, social, marketplace, and apps. As omnichannel customers spend more online than single-channel customers, omnichannel enablement is destined to generate additional revenues.
7. Improved integration and management
One key by-product of the “digital culture” is the usage of different tools, applications, aggregators, and other solutions. Siloed, legacy systems are a thing of the past. This is the age of Everything-as-a-Service (XaaS), outsourcing, cloud migrations, and rigorous API management. It involves re-engineering set processes, redesigning existing business models, and redefining approved business strategies. This can neither be addressed by adopting certain methodologies nor by investing in technology alone. It demands a complete understanding of the organisational systems and their correlation in the context of a larger ecosystem. Businesses that are successful in their digital transformation endeavours get these systems to talk to each other. This is possible through a complete integration and optimisation of organisational systems that help achieve specific business outcomes. McKinsey believes that ‘integrators’ – people responsible for integrating new digital processes into legacy systems and operations – play a crucial role in connecting the old systems with the new digital applications. With well-integrated and well-managed organisational systems, businesses can manage customer expectations, build automation, improve performance, and drive resilience.
These trends show that digital transformation is not just about technology; neither is it only about people. It is about managing changes caused by technology in the lives of people (employees and customers), and how it affects organisations as a whole. It is about transforming the way an organisation does business and interacts with customers. But above all, it is about redefining an organisation’s culture and the mindset of its people. Good communication, along with good leadership, has always played a decisive role in traditional change management efforts, and it is no less important in digital transformation initiatives. Organisations which have senior managers leading from the front, encouraging juniors to challenge old ways of working and experiment with new ideas, can surely boast of successful digital transformation programs.