Having an effective digital strategy can bring bottom line benefits and productivity impacts in a world where competition is rife. According to a survey by specialist research company Altimeter Group’s, The 2014 State of Digital Transformation, performance benefits include higher traffic on digital channels; a boost in customer engagement; and increased business opportunities, lead generation and conversion rates. Organisations that transformed themselves digitally saw greater returns and market share. Companies need to make deliberate decisions around digital and what it means to their strategy. This means giving consideration to how the digital world impacts their business and the extent of its participation in the digital economy.
The opportunity for differentiation is knowing your customer better and creating a seamless, personalised customer experience to keep them coming back or grow profitable customer relationships. Consumers will seek out organisations that meet their needs in a way that they prefer via the channel of their choice, whether it is by mobile device, web or the call centre. Technology provides the mechanism to question and change the status quo, the way the organisation engages customers, and reviews operational efficiencies and effectiveness. Digital programmes or the initial groundwork may prove to be too costly an investment for most organisations and it is put off for a later date or time which never arrives. The payoff for digital is sometimes a long-term one which means direct investment by the business is not an easy sell.
The digital capabilities of an organisation are mostly dependent on its existing IT infrastructure. The cost of replacing legacy infrastructure or capabilities can at times be detrimental to digital initiatives due to the sheer investment required or integration concerns of adopting new digital technologies. There can be hesitation due to the investment already made in the current infrastructure regardless of the fact that the organisation lacks the agility of its competitors or the synergy of its technology with its business operations. Many organisations focus more on risk aversion resulting in missed opportunities, using governance as a reason to not proceed. The benefits are not clearly understood by the decision makers and are often overshadowed by the perceived risks involved, and, therefore, they miss the opportunities that exist for their business.
1. Enhance and integrate existing processes
Adopting a digital mindset is no easy task considering that most traditional corporate cultures are quite rigid, the proper expertise is not always available and innovation comes at a cost that cannot always be justified in the short term. The organisation should have a clear vision and digital strategy to complement its offline offering. The purpose is not to compete with its traditional business, but to integrate and enhance existing business processes.
2. Know where you are going
“What does digital success look like?” Be clear on what you want to achieve. Organisations should have a clear vision for the future and a picture of where they want to go. Digital should form an integral part of the overall business strategy.
3. Executive buy-in is crucial
Success cannot be achieved without support from the top, and committed, visible digital leadership capabilities to champion the cause. Key stakeholders need to participate in digital initiatives as it may require change or a cultural shift in the organisation to deliver true business value.
4. Know your customer
Identify customer touch points and key drop-off points to understand customer intent, and provide appropriate contextual experiences. Engage employees for customer experience insights as they are often closest to the customer. Map the digital journey to align key customer touch points and engagement with the company offerings.
5. Invest in capabilities
Coordinate technology spending and invest in digital capabilities that improve operational efficiency, the customer experience and enable agility to drive the organisation forward. Identify deficiencies and build the digital channel in a cost-effective manner with a focus on business value.
6. Measure the value of your investments
Organisations need to have the appropriate metrics in place to better measure the impact of digital initiatives and better understand their customers. Ensure that suitable mechanisms are in place as digital investments are not always accurately measured using traditional methods. Customer experience and website metrics do not always align.
7. Find the experts and leverage existing strategic partnerships
It is not always easy for an organisation to maintain or build the necessary expertise. Companies should make use of existing vendors and form strategic partnerships in the areas where capabilities are stretched or lacking.
8. Build a dedicated digital transformation team
A strong, cohesive team from all areas of the business to champion the digital transition can make a significant difference. Transforming an organisation digitally takes more than technological capabilities. It requires a clear focus on the strategic goals, commitment, collaboration across the business and alignment in the organisation. It may be easy to generate momentum initially. However, the challenges of transforming a set way of working may prove overwhelming as obstacles come to the fore.
Digital is an important consideration within the overall business strategy. Customers are leaning toward brands that can provide them with what they need when they need it. A digital strategy can significantly reduce the barriers to change and presents an opportunity to engage more efficiently with existing customers and prospects.
This is the second part of a Blog published on the 2nd November 2015 titled ‘The need for a digital strategy.'