Organizations across all industries are undertaking "Digital Transformation" projects. But, what exactly is it? And, are they doing it right?
At its core, Digital Transformation is driven by the tangible shift in the role of technology within an organization. No longer as purely a support function that enables business processes, technology is now capable of much more. Technology now allows for new, innovative business models (e.g. XaaS), drives sales growth, and can even be a source of Competitive Advantage.
There are numerous emerging technology trends that drive Digital Transformation. Notable ones include Robotic Process Automation (RPA), Artificial Intelligence (namely Machine Learning), Mobile, Internet of Things (IoT), Cybersecurity, Big Data & Analytics, Cloud, Social Media, Blockchain, and so forth. The applicability of technology is largely dependent on the industry and organization.
With these technology trends, businesses are armed with the capability to fully digitize, transform, and grow their organizations. These technologies, in fact, mobilize 8 levers to Digital Transformation—spanning both Growth (business drivers) and Operational Improvement (business enablers). These 8 levers are listed and depicted below; and are at the core of Flevy's approach to Digital Transformation Strategy.
Let's take a deeper look into the 4 levers that drive growth for the organization.
Emerging technologies, particularly Social Media (and Social Media Marketing), are facilitating Demand Generation by building awareness and brand interest. With an increasing number of customer touch points and ability to collect and unify customer data across these various touch points, we are better able to understand our customers and their interests—leading towards customer "micro-segmentation."
Likewise, advertising platforms (as they, too, are collecting more and more customer data) also allow for more targeted ads. You can reach consumers by demographics, behavior, location, interests, and so forth.
Furthermore, ad platforms, such as Google and Meta, leverage Machine Learning algorithms to analyze large amounts of data about users and their behaviors. This allows the system to identify patterns and connections that can be used to target ads more effectively. For example, the system might use data on a user's previous searches, purchases, and other online activities to determine which ads are most likely to be relevant and engaging to that user. Typically, the more data the algorithm has been trained, the more accurate the results. By using Machine Learning to improve ad targeting, these advertising platforms help organizations reach the right audiences and maximize the effectiveness of their ad campaigns.
We can now be where customers can easily find us—and likewise, can easily find customers wherever they may be. This has been largely made possible through Mobile and Internet technologies.
This includes across channels (online and offline), across devices (e.g. PC, mobile), and across platforms (e.g. website, search, email, social). GPS and location-based services allow us to find customers based on where they are and where they have been.
Prior to the Internet era, customers had limited interactions with a company—e.g., retail salesman, telephone customer service. With emerging technologies—namely, Social Media, Mobility, Internet of Things—the number of customer touch points has increased dramatically. This is both an increase in number of ways for the customer to reach the company and an increase to the number of people within a company to reach the customer.
Companies now have the ability to constantly engage with the customer. In fact, this has become the customer's expectation—to be able to reach a business at all hours and receive a prompt response.
Thus, Customer Experience has grown in increasing importance. Immediate growth opportunities tends to come through Customer Experiences and relationships that adapt to their dynamics and demands.
In fact, of the growth drivers, Customer Experience (CX) is the most impactful and at the core of Digital Transformation-driven growth. Refer to these best practice frameworks on CX for more on the topic. Typically, Customer Experience Strategy is a focal point within any Digital Transformation Program.
Customer Experience has evolved from a traditional linear process (with few touch points) to a continuous, circular process (with constant touch points). This change in Customer Experience is so significant that many top management consulting firms have developed their own frameworks addressing this behavioral and operational change, such as McKinsey's Customer Decision Journey and Accenture's Nonstop Customer Experience Model.
Our complimentary primer to Digital Transformation Strategy provides an overview to the 8 levers to Digital Transformation. This presentation also touches on 6 technology trends driving Digital Transformation.
Today's Customer Journey and Purchase Process is dynamic, accessible, and continuous, because the digital touch points consumers are exposed to are always on and customers can constantly re-evaluate their purchase options. Enabled by technology, customers expect to easily control and vary their routes within and across channels to suit their needs at any given moment. Customers now expect their experiences to be continuous, constant, customized, and cross-channel.
The key, then, is for us to deliver a continuous Customer Experience via an integrated Omnichannel Strategy. Otherwise, in today’s "switching economy," a customer may quickly look for a different provider that does provide the continuous experience she desires.
As highlighted above, with the evolution of Customer Experience, so has the Customer Purchase Process evolved. Customers can now be reached via:
Likewise, existing channels, services, and products can also be improved and better leveraged.
As we can better target customers and tailor our offerings, customer profitability (or revenue per customer) is a metric that should see considerable improvement. Technology also shortens product development cycles and reduces the time to market for offerings.
For a more in-depth discussion on the 4 growth drivers to Digital Transformation, as well as the 4 levers to operational improvement, take a look at our Digital Transformation Strategy methodology document. In addition to discussing the levers to Digital Transformation Strategy, this document also provides a framework for Digital Transformation Execution. We lay out key phases and functional layers. Furthermore, we provide a framework for Digital Maturity—i.e. know where you stand and how to gradually improve/mature across the areas of Customer Experience, Operations, and Information/Technology.
If your organization already has a Digital Transformation Strategy underway, we also recommend you familiarize yourself with the 4 business ecosystems critical to a successful Digital Transformation Program. These ecosystems are:
The Customer Solutions Ecosystem includes distinctive products and services that companies can best offer to customers. It undertakes personalization, customization, enhanced features, improved logistics, creative revenue models, and innovative designs and applications.
This layer integrates external entities to create additional value. As a matter of fact, an established partner network is essential in building a cutting-edge Customer Solutions Ecosystem.
The Operations Ecosystem encompasses the physical activities and flows that supports the Customer Solutions Ecosystem.
This layer includes external partners in operations, such as:
The Technology Ecosystem drives and supports improvements and breakthroughs in the Customer Solutions, Operations, and People ecosystem.
This layer includes pivotal, emerging technologies for the Fourth Industrial Revolution (4IR) that embody the essence of Digital Transformation initiatives, such as:
We can say Digital Transformation is achieved when technologies are available to connect and collaborate along the end-to-end Digital Value Chain.
As it's true with all business initiatives objectives, especially those that are transformational, without the right people and talent in place, then we won't be able to successfully and effectively execute on our plans. Thus, the People Ecosystem is an enabling layer.
It is the domain of organizational competence and culture. This layer supports Digital Transformation initiatives.
Studies have shown organizations that have excelled in Digital Transformation (i.e. "Digital Leaders") distinguish themselves through their mastery of these 4 critical business ecosystems, characterized by:
Digital Leaders align their organizations around a clear and coherent overall strategy made up of a Value Proposition and distinctive capabilities. More information on the Digital Transformation: Integrated Business Ecosystems methodology can be found here.
The 3 documents below highlight the core concepts of Digital Transformation discussed in this article. In building your organization's Digital Transformation Strategy and Program, we recommend consulting these best practice reference guides.
Source: Digital Transformation Strategy [source material], Digital Transformation: Integrated Business Ecosystems [source material]
Digital Transformation Strategy
Digital Transformation is being embraced by companies across most industries, as the role of technology shifts from being a business enabler to a business driver. Beyond the topics mentioned above, additional concepts covered include Customer Experience Matrix, McKinsey's Customer Decision Journey, Accenture's Nonstop Customer Experience Model, Digital Maturity Assessment, Digital Maturity Model, 6 Layers of Successful Execution, Digital Operating Models, Customer Interaction Channel Map, among others. |
$89.00
| |||
|
Digital Transformation: Integrated Business Ecosystems
These Business Ecosystems are discussed in context to a 4-level Digital Maturity Model. By the way, only 10% of organizations mature to the highest level. This framework teaches you what is needed to reach that level of Digital Excellence through a 6-phase approach that ties implementation to the 4 ecosystems. Beyond the topics mentioned above, additional topics covered include Business Model Platforms, Supply & Demand Planning, Supply Chain Integration, Artificial Intelligence, Analog vs. Digital Culture, among others. |
$59.00
| |||
|
Customer Experience Strategy
It is critical that all businesses create a CX Strategy, an all encompassing view of how they will deliver superb experiences to their customers. Having such a strategy will increase customer satisfaction and loyalty, grow word of mouth referrals and significantly contribute to your bottom line. This framework introduces an easy to use 1-page template for capturing a CX strategy and provides a comprehensive guide to completing the template. |
$65.00
| |||
|
MORE DIGITAL TRANSFORMATION BEST PRACTICES
|
RELATED TOPICS
|
|
"As a consulting firm, we had been creating subject matter training materials for our people and found the excellent materials on Flevy, which saved us 100's of hours of re-creating what already exists on the Flevy materials we purchased."
– Michael Evans, Managing Director at Newport LLC
|
|
"My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success."
– Bill Branson, Founder at Strategic Business Architects
|
|
"[Flevy] produces some great work that has been/continues to be of immense help not only to myself, but as I seek to provide professional services to my clients, it give me a large "tool box" of resources that are critical to provide them with the quality of service and outcomes they are expecting."
– Royston Knowles, Executive with 50+ Years of Board Level Experience
|
|
"Flevy is now a part of my business routine. I visit Flevy at least 3 times each month.
Flevy has become my preferred learning source, because what it provides is practical, current, and useful in this era where the business world is being rewritten. In today's environment where there are so many challenges and there is the need to make the right decisions in a short time, with so much scattered information, we are fortunate to have Flevy. Flevy investigates, selects, and puts at our disposal the best of the best to help us be successful in our work." – Omar Hernán Montes Parra, CEO at Quantum SFE
|
|
"As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value."
– David Coloma, Consulting Area Manager at Cynertia Consulting
|
|
"As a consultant requiring up to date and professional material that will be of value and use to my clients, I find Flevy a very reliable resource.
The variety and quality of material available through Flevy offers a very useful and commanding source for information. Using Flevy saves me time, enhances my expertise and ends up being a good decision." – Dennis Gershowitz, Principal at DG Associates
|
|
"As an Independent Management Consultant, I find Flevy to add great value as a source of best practices, templates and information on new trends. Flevy has matured and the quality and quantity of the library is excellent. Lastly the price charged is reasonable, creating a win-win value for the customer, Flevy and the various authors. This is truly a service that benefits the consulting industry and associated clients. Thanks for providing this service. "
– Jim Schoen, Principal at FRC Group
|
|
"As a young consulting firm, requests for input from clients vary and it's sometimes impossible to provide expert solutions across a broad spectrum of requirements. That was before I discovered Flevy.com.
Through subscription to this invaluable site of a plethora of topics that are key and crucial to consulting, I have been able to exceed expectations and deliver quality advice and solutions to my clients. The quality and expertise of the authors are exemplary and gives me great confidence to use as part of my service offerings. I highly recommend this company for any consultant wanting to apply international best practice standards in their service offerings. " – Nishi Singh, Strategist and MD at NSP Consultants
|
![]() Do You Want to Get Lean?
We've assembled 40 Lean Six Sigma guides: Lean Management, Six Sigma, Strategy Planning, Process, and Change Management.
|
![]() Waste Too Much Time on PowerPoint?
Get our FREE PowerPoint Plugin (Flevy Tools) for creating common business diagrams, from Gantt Charts to Harvey Balls.
|
![]() Do You Run a Consulting Firm?
Learn how to level the playing field with global consulting firms, like McKinsey, BCG, Bain, E&Y, and Accenture.
|
![]() Need Help with PowerPoint or Excel?
Have our highly trained staff create the exact documents you need. We offer PowerPoint and Excel document creation services.
|
© 2012-2023 Copyright. Flevy LLC. All Rights Reserved.