This article is published in collaboration with Tata Consultancy Services.
It’s 2015, and digital transformation is no longer a topic of discussion, it’s a clear imperative for CxOs and organizational leadership. In fact, most companies today are already running digital transformation programs. Many of those programs, however, are internally focused on improving processes in silo’d channels like website updates, mobile, and social platforms.
Digital transformation is often looked at as a technology change rather than a business change. And therein lies the challenge – technology programs alone will not help organizations adapt to the sweeping changes being brought about by the emerging digital society.
As consumer adoption of the digital lifestyle has gained momentum, it has disrupted established businesses. Kodak, for example, invented the digital camera, but it was so close to its successful film business that the entire digital generation passed them by. Kodak’s top management did not grasp how quickly the world around them was changing. They did not see and understand how digital photography was changing the way their customers took pictures, who took them, why and when. Digital cameras came to be seen, not just as photographic equipment, but as electronic gadgets, and that caused an enormous shift. Newcomers like Sony were able to bypass Kodak’s distribution networks and go right into electronic retail outlets, forcing Kodak to play on Sony’s and other entrants turf rather than its own.
Digitization has lowered entry barriers and brought in new competition across many other industries too. Netflix created entire new ecosystems in the entertainment industry. Blockbuster ignored the big changes in the way people viewed home entertainment and ended up being sold in a bankruptcy auction to Dish Network. Netflix, on the other hand, has continued to innovate and evolve, shifting their focus from movies-by-mail to a streaming model and launching their own programming. Other tech giant’s like Hulu, Amazon, YouTube and Apple also play in this arena of personal entertainment that encompasses mobile computing, wireless communications, human-computer interaction, intelligent systems and whatever comes next.
Organizations that have focused their business models around their customer’s digital lifestyle have been able to generate tremendous value from the digital wave. And it need not be only for the new age digital businesses. The promise equally applies to traditional organizations. Disney’s incredibly resilient business model has allowed them to deliver relevant, timeless and unmatched experiences that span many generations. Disney has used technology to improve the customer experience, incorporating wearable technology, fast passes and wait time indicators and Magic Bands that allow guests to buy food, merchandise, and unlock their hotel rooms, all in one device.
Proctor & Gamble is very successfully using a digital-first approach to emotionally connect with and deliver more value to its customers as can be seen in their Always Like Girl campaign. With up to half the world’s viewing time spent on digital, P&G embraces emerging technologies to shape its business model, expand its creativity, and further enhance its brand.
B2B value chains are impacted as well, the prime example being how Salesforce has completely disrupted the CRM software market by putting the sales person at their center of their focus.
Digital adoption by the broader society has leapfrogged organizations; digitally savvy consumers are creating their own ecosystems to meet their specific needs. Organizations that are leveraging digital technologies to reinvent their business models and processes to establish closer customer connection and drive innovation will be the winners. Digital technologies enable businesses to engage more deeply with customers in the context of who they are, what they prefer and what they need. Companies can use these insights to implement enterprise-wide changes that enable them to quickly and cost-effectively deliver more useful, meaningful experiences.
How is your organization leveraging digital technologies to drive innovation and closer customer connection? Is your company willing to rethink and disrupt itself in order to deliver improved experiences across the customer journey? Are you ready to disrupt, rather than be disrupted?
Publication does not imply endorsement of views by the World Economic Forum.
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Author: Suman Mahalanabis is the Director, Product Management at TCS Digital Software & Solutions Group and is passionate in bringing science to the art of business decisions through analytics and new age data infrastructure.
Image: Internet LAN cables are pictured in this photo illustration. REUTERS/Tim Wimborne.