DIGITAL TRANSFORMATION FOR BUSINESSES
DIGITAL TRANSFORMATION FOR BUSINESSES
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As organizations navigate towards newer and better ways of working, the focus is going to be on following a few pointers for a more sustainable future.
>>Moving Toward Customer Centricity
As consumers inherit digital into every thread of their lives, businesses are focused on creating not only newer digital business models and revenue streams, but also next-generation operating models that will be able to support a seamless digital customer experience. When you come to think about it, products are not necessarily the main differentiators anymore, rather the differentiator is platform-based business models with digital channels and a complete focus on customer centricity that actually are offering competitive advantages.
“LEARNING AND innovation go HAND in hand. The Arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” – William Pollard
The future success of companies across sectors will be defined by their ability to provide customers with a contextual based and personalized experience at each and every stage of the customer journey. The ones who make quality user experiences and brighten the cornerstone of their strategy, decisions and culture are expected to emerge as winners.
Noting about being customer centric, digital transformation of McDonalds is one to watch. They are using Al powered tech in their drive thru machines in order to customize menus in real time according to the customer preferences. In subsequent chapters, we will delve deeper into classic case study of McDonalds and its digital transformation.
Strengthening the Operational Backbone with Help of Automation
Intelligent automation is increasingly considered as an important factor that helps gain inertia in enabling a shift towards ‘smarter’ organizations that are ready and equipped to operate from a remote environment. Intelligent automation is currently disrupting the old traditional ways of improving operational efficiency, cost cutting and enhancing overall customer satisfaction across the value chain.
“Surprise drives progress because innovation depends on the sort of knowledge no one can gather in a central place.” – Virginia Postrel
Today smart home security systems, smart TV’s, smart speakers, smart watches like FITBIT etc. have become part of our lives. That is the internet of things – that is interrelated devices with an ability to transfer data over the network without any human contact.
Implementation of such pat-on-the-back technology like IoT, automation, intuitive learning etc are some of the interventions that are being deployed to make organizations resilient in recent times. In today’s world, technology can be defined as executing tasks based on data and learning, allowing humans to focus more of their attention and effort on growth, creativity and innovation.
With 5G around the corner, organizations are also rechecking network use cases that can support smart campuses, smart offices, smart cities and smart factories. 5G is estimated to unlock USD4300 billion in new market opportunities across all industry sectors and concerned verticals.
Redesigning the Core Organization Structure to See the Impact of Changed working models
In the post pandemic, we have lived through different experiences. There is a brand new focus on performance, productivity and efficiency. Organizations need to consider rebooting their people strategy, focusing on core elements such as future workforce landscaping allowing for gig, neo gig and liquid working models to survive.
The post-effects of the pandemic also saw an abundance of skills emerge as essential for business continuity from a user’s perspective, especially the digital skills. Reskilling and creating a future-ready workforce is at the foremost task of human resource (HR) strategies. While tasks are being automated with greater digitalization, roles and processes must be redesigned in addition to realize its potential in regards to transformational productivity.
A very simple example would help. There was a student who liked Math way too much. He often used to do the right calculations using pen and paper. His teacher had arranged a competition which tested their solving ability and speed. The student sure did get the right answers but since he did it manually he lagged behind.
“Ideas are like rabbits. You get a couple AND LEARN HOW TO HANDLE THEM, AND pretty soon you have a dozen.” – John Steinbeck
The other student solved the answers using a calculator. In today’s world it is about using a calculator and getting work done with efficiency and using your saved energy in other tasks. (calculator being a metaphor for going digital).
Cost Management
Now the companies are focused on building organizational structures that are leaner and as a consequence, all discretionary spending is being rechecked. The expenses of marketing and advertising, which have historically shown a direct correlation to gross domestic product (GDP) growth, have been hugely cut, in addition to other areas of indirect spending.
In a nutshell, while market dynamics are seen to be shifting continuously and the future remains uncertain highlights, companies that manage mitigating short-term challenges as well as planning for a more sustainable recovery will emerge in the best place. The organizations will need a coordinated strategy to make their businesses future-proof, sturdy and resilient.
The highlights from the study of Deloitte will help to understand more on how digitally mature organizations don’t just innovate more, they innovate in a different way by leveraging business ecosystems and cross functional teams that play important roles.
Many businesses investigated digital maturity, keeping their prime focus on organizational aspects of digital disruption instead of the technological ones. They checked about companies at the early, developing, and maturing stages of digital transformation and have seen increasing signs of divide between more and less mature organizations. The research of 2020 highlights how the gaps can often be explained by a company’s approach to innovation: The companies that are digitally mature not only innovate more, they innovate differently.
This innovation is driven in large part by establishing teams and undergoing collaborations established externally by digital ecosystems and internally by cross-functional teams. Ecosystems and cross-functional teams both increase agility in organizations. The risk of this increased agility, is that it can lead a company’s innovation efforts to outrun its governance policies. It is important, then, that these kinds of organizations have strong policies in place regarding the rules and ethics of digital business.
“InnovATIon IS TAKING TWO THINGS tHAT exist AND putting them together in A new way.” – Tom Freston
Their study of digital business is based on a global survey of more than 4,500 managers, executives, and analysts and 14 interviews with executives and thought leaders. The report presents the following findings:
Digitally Maturing Companies Innovate At Far Higher Rates Than Their Less Mature Peers
Eighty-one percent of respondents from these companies think innovation as a strength of the organization, compared with only 10% from early- stage companies. Notably, innovation happens throughout digitally maturing businesses; it isn’t trapped in labs or Research and Development departments. Digitally maturing companies usually like to participate in digital ecosystems, and employees are often organized in teams which are cross functional in nature.
Employees of Digitally Maturing Organizations Have More Scope to Bring Innovation in Their Jobs, Irrespective of What Those Jobs May Be
Maturing companies as from early-stage companies report that their organizations provide them sufficient resources to innovate. A strong relationship between a company’s rate of innovation and its personnel confidence tells that the organization will be stronger in the time to come ahead, big shout out to digital trends.
Nestle, an FMCG brand is known for its DAT – Digital Acceleration Team which was created to shift the focus of the brand to digital. DAT’s job was to train employees in the digital field of the business.
Digitally Maturing Companies Are Far More Likely Than Their Less Mature Counterparts to Collaborate with External Partners
About 80% of organizations foster partnerships with other organizations to maintain digital innovation, only one-third of early-stage companies do the same. The nature of collaboration also differs with respect to maturity level. Digitally maturing organizations tend to form alliances which involve less formal, more controlled relationships, hence they rely more on relational governance and less on detailed contracts. Formal partnerships can still serve a necessary role in collaboration and often exist as part of bigger business ecosystems.
Cross-Functional Team is an Important Parameter of Digital Innovation
Their members are often evaluated as one group. Participants on these cross functional teams are also more likely to say that their cross-functional work is supported by senior management. For more fast forward companies, the principle of organization behind cross-functional teams is moving from projects and going toward products.
Digitally Maturing Companies Are More Agile and Innovation Oriented, But Because of This They Require Greater Governance
When Asked to Predict What Will Be the Position of Their Company – Stronger or Weaker as They Move Forward, Respondents from Digitally Maturing and Early-Stage Companies Show Strikingly Different Responses
The stronger ones believe that their organizations have the power to adapt to changes brought by digital disruption and expand their abilities, while the weaker ones see disruption as a result of market forces they cannot seem to control.
How Can Innovation Help Accelerate the Digital Ecosystem?
For instance, choosing a health plan can be difficult, especially if you are one of the nearly 60 million seniors receiving Medicare benefits. With thousands of privates’ insurance companies coming forward to administer Medicare plans to people older than age 65, many seniors have problems identifying a suitable plan, one that optimizes the right mix of costs, medical access, and health coverage.
To help solve such a problem, a startup named Enroll Hero came up for Medicare. Their online tool compares medical health insurance plans and posts that offer customized recommendations to its users. They promote themselves to reach a greater audience. The promotion reached hundreds of thousands of MetLife customers but did not recommend even a single MetLife health plan kit. The reason for that being MetLife doesn’t offer a Medicare health plan, and even if it would have, Enroll Hero’s mission is to be an unbiased platform. It wouldn’t suggest a plan unless it were the right one for a particular customer.
“WHAT IS THE CALCULUS OF innovATIon? The calculus of innovation is really quite simple: Knowledge drives innovation, innovation drives productivity, productivity drives economic growth.” – William Brody
What is the use, then? For Enroll Hero, the partnership was an amazing opportunity to expand the service and reach, develop its product, and grow its business. For MetLife’s section, by analyzing customer response rates, it learned more about the interests of one of its most valuable customer segments, the ones who may be receiving benefits of retirement via MetLife.
This unusual collaboration between Enroll Hero and MetLife sprung up from a larger effort within MetLife to fuel innovation in its Fortune 50 business.
The result being, Enroll Hero was one of 10 companies that were chosen to participate in the accelerator’s inaugural program, officially dubbed the MetLife Digital Accelerator powered by Techstars. The program was a platform that connected digital insurance-related startups with experts and leaders from MetLife and mentors from Techstars. Once they got connected with experts they were able to create and run a working pilot program, something they had previously expected would take at least a year.
It has also come to notice that digitally maturing companies are far more likely to encourage and empower digital innovation throughout their businesses. However, it isn’t just that there is more to these companies who do more innovation, and also innovate differently from other companies. Digitally maturing organizations are more inclined to depend upon external partnerships for innovation. While organizations at various maturity levels report these partnerships to be crucially vital, those developed by digitally maturing companies are usually organic and fluid rather than carefully formed and structured.
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| MR. PRAKASH ARYA |
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