Digital transformation: Ten years ago businesses like Banks, Media companies and Hotels had their peers in the same industry as their major competitors; today fintechs, social media and private house owners respectively have become major competitors as they provide alternatives to customers.
This places the burden of finding new ways to retain their customers and businesses from these uncommon competitors. Hence businesses must rethink how they provide value leveraging technology, people and processes in line with the changing lifestyle and expectations of customers.
If your business model is still the same as it was ten years ago, the question is not if you will run out of business but how soon you will run out of business. Value propositions that thrilled customers years back may be totally unappealing to the same customers today. In 1996 Kodak made 16 billion USD, but by 2012 it was bankrupted, their product – photographic films which was once a necessity for every photographer no longer had value in the face of digital photography.
Most organizations are responding by acquiring the latest digital devices and equipment, adopting cloud and mobile, creating websites, online stores and social media handles. All these can be part of the digital initiatives to drive transformation, but these alone cannot lead to digital transformation.
“Digital transformation marks a radical rethinking of how an organization uses technology, people and processes to radically change business performance” – George Westerman, MIT Sloan
“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.” – Satya Nadella CEO Microsoft.
“Business success today requires a customer-focused digital transformation. It starts with prioritizing a superior and relevant customer experience and aligning the organization, processes and technology to power it” – Accenture
“Digital transformation is about changing the way processes, people and technology work to create efficiencies, new sources of innovation, and new insight that was not readily available previously. More importantly, digital transformation is most effective when putting the customer at the center of the digital ground swell”. – 9sense
It is about how you deliver value in the market place leveraging digital technology to understand the customer, and deliver what the customer needs, the way the customer wants it.
It involves enabling business outcome using technology and data to get closer to the customer. It requires building a systems of people, products and processes to create business values in new ways.
Digital transformation is essentially not about deploying the latest technology, it’s about creating an ecosystem where people connect, interact with products and services to create value and derive value. Technology comes in and is vital, because today, digital technology provides the bolts and nuts to hold this ecosystem together.
To stay competitive and profitable in today’s digital economy, rethinking the business model is not an option but a necessity. Businesses need to reinvent themselves in pursuit of new business models and revenue streams in line with customers changing expectation on products and services.