Gaining competitive advantage from technology requires a proactive holistic approach …
In 2020, digital transformation undoubtedly is on the front burner for most businesses. The question is no longer whether to undertake digital transform, the question is how to get it right. The pace of change in the business environment is on the increase, customers’ expectations are changing and market dynamics is radically changing; hence businesses must respond timely and adequately to remain competitive in the emerging digital world.
Most businesses have embarked on some form of digital transformation efforts, unfortunately many are not getting the desired result. According to a McKinsey Global survey, less than 30% of digital transformation projects succeed.
Ayoks Digital Wheel is a framework to guide successful digital transformation of businesses. It recommends a holistic and coordinated program of change. It presents four elements as the core drivers of digital transformation, which must be strategically coordinated to achieve successful digital transformation.
It infers that successful digital transformations are centered around inspiring business vision, nurtured by the right organizational culture, follow iterative processes and are powered by one or more digital technologies. These are captured as different layers of the Ayoks digital wheel.
At the center of every successful digital transformation project is an inspiring vision. Read more.
This transformation project must be supported by the right organisational culture. Read more
Digital transformation is a journey and consists of several iterative processes. Read more
Digital technologies provide the platform to enhance operational efficiency and fulfill customers’ needs. Read more
Digital transformation of your business is a journey that consists of several iterative processes.
Minimum Viable Product (MVP) is your value proposition (i.e the problem you solve) packaged as a product for the market in its basic form. It is important you define this with a focus on the real value that your customers get and what they are willing to pay for.
An understanding of the value you offer is important to transforming your business, as it enables you to rethink your products while improving on the value. Value is not disrupted, it is products that are disrupted.
You need to redesign your business model to leverage digital capabilities. Your business model refers to how your business operates, creates and captures value for stakeholders in a competitive marketplace. It involves how you structure your cost and revenue streams.
Some business models you may use (modify) are; market place, freemium, subscription, lease, auction, pay-as-you-go, franchise, affiliate, razor blade etc. Read more
Designing your ‘Digital Awesome Product’ (DAP) is important for digital transformation of your business. This involves making your customers journey seamless and giving them great experience consuming your product. You can achieve this by imbedding digital values into your minimum viable product (MVP) and address pain points on your customers journey.
Implement your digital awesome product (DAP) preferably using agile methodology. It affords you the opportunity to deploy in phases and going through rapid iterations based on customer feedback. The principle here is to deploy, fail fast, learn and improve. Continue until you achieve that product that gives customers a ‘wow!’ experience.
“Digital transformation isn’t just about procuring a CRM, ERP, or office automation system. It requires building out what we refer to as systems of intelligence — digital feedback loops that help you better engage with your customers, empower your employees, optimize your operations, and reinvent products and business models”
“In Today’s era of volatility, there is no other way but to re-invent. the only sustainable advantage you can have over others is agility, that’s it. Because nothing else is sustainable, everything else you create, somebody else will replicate.”— Jeff Bezos, Amazon Founder
“When digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.” – George Westerman, MIT Sloan.
“At least 40% of all businesses will die in the next 10 years… if they don’t figure out how to change their entire company to accommodate new technologies” – John Chambers, Executive Chairman, Cisco System
Digital transformation marks a radical rethinking of how an organization uses technology, people and processes to radically change business performance.
“90% of CEOs believe the digital economy will impact their industry, but less than 15% are executing on a digital strategy.”— MIT SLOAN AND CAPGEMINI.
““The last ten years of IT have been about changing the way people work. The next ten years of IT will be about transforming your business.”— Aaron Levie, CEO of BOX.
“We’re only at the very, very beginning of this next generation of computing and I think that every industry leader will be the ones that transforms first. I don’t care what industry you’re talking about.”—
Kim Stevenson, CIO, Intel
The pace of change in the business environment is increasing courtesy of advances in digital technology. The expectations of customers are fast changing, products and services that thrilled customers yesterday may not get their attention today.
Maintaining the status qua is a road map to exit from business, following the trend makes you a laggard; to be a leader, you need to lead the digital trend in your domain and gain competitive advantage.
Succeeding today, requires transforming your business by radically rethinking how you deploy technology, people and processes to create value in more effective ways.
It may involve pursuing new business models and revenue streams inline with customers changing expectations. It involves adopting a culture of creativity where an organisation continuously seeks for new frontiers of competitive advantage leveraging advances in technology.
It requires business leaders who can proactively apply new technologies to their business model before their businesses are disrupted by these new technologies.
According to John Chambers, Cisco’s CEO “By the time it’s obvious you need to change, it’s usually too late,” hence business executives need to understand the digital trend especially as it affects the industry where the play.
76% of companies are investing in emerging technology. – Accenture
85% of enterprise decision-makers say they have a time frame of two years to make significant inroads into digital transformation or they will fall behind their competitors and suffer financially – IDC
At the center of every successful digital transformation is a clear and compelling vision.
Technology is an enabler. It gives you power but it does not tell you what to do with the power. Your vision tells you what to do with the power.
Create an inspiring and compelling vision to drive your digital transformation journey. This will determine your goals, your decisions and your actions.
Your vision must address the essence of your business.
“To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” – Amazon
“To connect the world’s professionals to make them more productive and successful.” – LinkedIn
“To give people the power to share and make the world more open and connected.” –Facebook
“To enable people and businesses throughout the world to realize their full potential.” – Microsoft
“To organize the world’s information and make it universally accessible and useful.” – Google
“To refresh the world…To inspire moments of optimism and happiness…To create value and make a difference.” – Coco cola
According to McKinsey & Co. Research, culture is one of the main barriers that hinder organizations’ digital transformations. In a Gartner’s press release, it stated that 46 percent of CIOs identify culture as the largest barrier to realizing the promise of digital business.
Developing the right organizational culture therefore is critical in achieving digital transformation of your business. Organizational culture includes an organization’s beliefs, expectations, philosophy and values that guide interactions within the organization and with the outside world. The right organizational culture in today’s digital world will as a necessity include the following;
Customer centricity – This means making excellent customer experience the focus of all decisions and actions. It involves having a feedback mechanism that ensures customer needs are always captured and addressed. This also means that an organization focuses on what the customer wants or needs instead of what the company offers.
Cross-functional collaboration – This is the practice of having effective collaboration across different teams as against a situation where different teams work in silos . This involves creating an atmosphere that encourages sharing of knowledge and insights, it’s an atmosphere that encourages team achievements above ‘keyman’ syndrome.
Informed and empowered workforce – This implies employees are regularly informed and engaged about what the organization is doing and the employees are also empowered to contribute the what the organizations doing. Letting your people know what digital transformation means for the organization and how it will impact the workforce will encourage employees embrace it. This is a system that empowers employees with the right, information, skills and insights.
Reasonable risk appetite – This is a culture where people are comfortable trying new things; where employees can take calculated risks and are not punished for adverse outcomes.
An agile and innovative culture – This is a system that allows people to think out-of-box, think big, fail fast, learn and improve. It’s a system that rewards success and also encourages creative failures.
Digital technologies provide the power that drives digital transformation of businesses. These emerging digital technologies include; social, mobile, cloud, artificial intelligence, internet of things, data analytics, robotics, augmented reality etc. Businesses need to determine how one or more of these technologies bring values and capabilities that enable them to deliver to the customer what the customer wants the way the customer wants it.
Social Media – There has been an increase in social media platforms like Facebook, Twitter, Instagram, LinkedIn etc. These platforms dedicated to community based input, collaboration and content sharing have provided businesses new opportunities to engage their existing customers, prospect and acquire new ones.
Mobile – Mobile technologies used in smartphones and wearable have significantly changed how people communicate, shop, work and do business. The adoption of mobile is on the increase, according to Statista, in 2018 over 50 percent of internet traffic came from mobile devices. This is of great importance to business – hence smart businesses are now using a mobile-first approach in their digital transformation projects.
Data Analytics – This enables businesses to understand customer experience of their products and services, it gives business insights to how, when and where their products and services are consumed. This is of great importance in understanding what the customers want. This is a major driver for digital transformation of businesses.
Cloud – Cloud computing offers businesses on-demand availability of computing resources to implement their transformation initiatives. This enables businesses to respond quickly to changing market conditions and demands. It catalyzes innovation as businesses are able to quickly test their products or services, this reduces time to market and capital investment required to deploy solutions.
Internet of Things (IoT) – This emerging technology creates a system where internet connectivity is extended to everyday objects like electronic devices, mechanical devices, people and animal. IoT is set to provide a turning point in the world of business. As the number of IoT devices continue to increase globally, businesses can take advantage of this in the transformation of their businesses.
Below are some areas you can gain digital advantage in your business.
Using digital platforms like internet, social media etc. to gain increased visibility and to engage your customers.
Gain business advantage by using digital channels like mobile, social, internet to acquire, onboard and service Customers
Gain advantage in productivity by effectively using digital technologies like AI, robotics, automation etc in your operations.
Gain market advantage by leveraging digital technologies to disrupt the market. This may involve creatively creating customer values and benefits that previously didn’t exist and then monetizing them.
Obviously the future of business is digital, and digital transformation holds the key to surviving and succeeding in today’s rapidly changing and challenging business environment. Advances in technology have changed the way business is conducted, impacting various aspects of business from production to operations to marketing to customer services. The wave of change continues and more businesses and industries are bound to be disrupted. There is no business that can actually claim immunity from disruption, it is either you are disrupting or you are being disrupted.
In today’s world of business which is technologically driven, business owners and executives must transform their businesses in line with the digital realities, those who do so successfully will gain business advantage and become victors, those who fail to do so will have their businesses suffer and become victims of digital disruption. “To win in this new world, e-Business leaders must reinvent their businesses as fundamentally digital. Do this, and you can become a digital predator; fail, and your business will become digital prey” Says Forester’s Martin Gill.