The evolving concept of digital transformation in the age of the customer

Going digital is the need of the hour, that cannot and should not be ignored by organisations. This digital transformation, as technology and market research company Forrester defines, is the process that businesses need to go through, at the end of which they are able to exploit digital technologies to create new sources of value for customers, as well as increase operational agility in service of customers. Essentially, digital transformation is a journey and not a destination. Organisations are at various stages in the journey, some near their destination and some just barely starting off. Even within a single organisation, there are inconsistencies and each silo seems to have a mind of its own when it comes to being digital. This is where the CEO steps in, and leads the transformation expedition. Unlike previous transformations, this time it is not about improving the efficiencies or reducing the costs which can be effectively led by functional heads, this wave of transformation involves being customer-obsessed. Of course the CMO and CIO also play a significant role here. The CMO is the de-facto champion of the customers for a long time and CIOs can elevate themselves to introduce the digital technology. They need to collaborate as one. One successful practice followed by some companies is to form a cross-functional digital acceleration team. This team has the mandate to propagate digital thinking within the organisation. Speaking to Tech2 about the concept of the evolving concept of ‘going digital’ in the age of the customer, Ashutosh Sharma, VP and research director at Forrester, explains that every business’ success is predicated around - a. having a product or service to sell, b. having a sustainable market for those product or service and c. having a value proposition differentiated enough to command prices that allow meeting or exceeding margin expectations of the stakeholders. Historically, enterprises focused on improving operational efficiencies through technology while using marketing to create awareness and gaining mindshare. “However, in the age of customer, almost every aspect of this simplistic model is undergoing changes. It is much easier for new businesses to form and launch new products or services. The marketplace where customers discover, explore or buy products is undergoing changes. Traditional marketing practices are not as effective. Digital in the age of the customer is about doing almost all the business activities differently with keeping customer at the center,” Sharma points out. Such is the customers’ influence, they are practically leading digital transformation within the enterprise. “As enterprises track and follow customers with evolving digital behaviour, they realise the need to transform into digital businesses. Being a digital business may require changing the products or services to align with the digital expectations for the customers or changing the business model itself. Empowered with information on price, products and competitors, customers today are also adopting new behaviours at a rapid pace which Forrester calls hyperadoption,” says Sharma. He adds that enterprises’ attempt to respond to this changing reality is what makes the digital transformation of today. To meet heightened customer expectation with digital transformation, enterprises need to undergo a digital transformation which allows them to logically respond to the changing reality. Sharma explains that as their customers evolve rapidly, at times without really knowing what do they need in their digital context, while being eager to adopt newer offerings - enterprises need to be adept at understanding these customers better, at responding to changes really fast, at reading the signs of upcoming changes and at aligning the whole organizations towards the common goal of customer obsession. Forrester calls this the customer obsessed operating model for digital transformation. And with the tech-adept customer of today, comes in this wave of Big Data and mobile. Talking about this disruption, Sharma says, “Companies are absolutely aware of the mobile mind shift that has started to take place with the advent and proliferation of smartphones. Their customers expect to get what they want in their immediate context and moments of need. Digital leaders are leveraging the mobile platform for engaging with the customers and not just that they’re using a combination of heuristic models and insights from data available to them to enrich their customers’ experience. Mobile is a powerful channel which, due to its omnipresence, has become very important.” Enterprises, however, need not be bogged down with the responsibility to go digital. While the increasing influence of technology from the customers’ end may seem like a threat for enterprises, digital leaders know that technologies such as big data, IoT and cloud are among a host of tools that are available to them and these need to be exploited to create new sources of value to the customer or increase operational agility in service of the customer.