Digital Transformation: the costs of falling behind
The discussion about digital transformation has reached its peak this year, and not embracing it is not an option anymore for companies who want to stay relevant. The biggest challenge to overcome is the need to rethink your business and adapt your processes to try and stay ahead of the curve. Hence, you need to weigh the consequences of falling behind.
Will you be able to keep your business running in a digital world and meet customer needs without providing them with a digital experience? This is a question every company has to ask themselves, no matter what sector they belong to. From service providers to merchants, every business is facing similar challenges.
Most of companies understand that customer experience is the key to differentiation and customers want digital experience. Let’s acknowledge that technology has brought us to the point where we control our life from the palm of our hand, all we need is a device connected to the internet. There’s no way to turn your back on this. The more you delay this process the more you'll fall behind on your competitors, who are certainly putting in place their digital transformation plan as we speak.
McKinsey researchers determined last year, that companies that embrace digital transformation and strategically implement it will outperform and, overall, do well. On the other hand, those who choose the “wait-and-see” strategy may suffer a downturn in their performance as a result.
The costs of falling behind
What do Amazon and Uber have in common? They’ve been taking market share because the existing industries aren’t adapting their business models (fast enough).
For instance, e-commerce has exponentially grown worldwide in the past few years, yet many companies have shut down because they didn’t implement an online store on their website or didn’t manage to offer quality sales services (delivery, product change or return policies, etc).
A recent example of this is what happened to Toys'R'Us, the dominant American toy store founded in the 50’s, that filed for bankruptcy protection last September. This giant failed to keep up with the shift to an online business model and lost to its new competitors, like Amazon amongst others, who are the face of digital transformation. Many more traditional retailers have lost their market position due to the rising popularity of e-commerce and mobile commerce.
On another spectrum we have companies like Uber that are delivering an incredible digital experience to customers. You can easily download the app, register and request a service, knowing exactly which type of car you’ll be travelling in, how long the ride will take, what the route will be and approximately how much you’ll pay. Is there anything more you can ask of this type of service? Unbelievably, the taxi industry is putting all its efforts in fighting off disruptive companies like Uber, failing to see the big picture. A massive change is needed in that sector and there’s a lot to be learned from Uber's business model and processes. But this isn’t recognized by the traditional taxi community and very little is being done to adapt and embrace digital transformation.
Focusing on the advantages rather than the challenges
According to research done by Accenture Strategy, “savvy organizations are realising that new digital technologies can propel their use of more advanced integrated services to support unconventional areas, better focus on the external customer - and supplier relationships, and enhance their competitiveness”.
This means that digital transformation benefits your company in many aspects: it increases productivity, efficiently engages with customers and enables growth. Overall, it is all about transforming and creating new business models, processes and culture using digital technologies. The use of technology is actually the key to improve employees, customers, partners and stakeholders experience. It allows your company to align people, data and processes to create value for your customers and maintain a competitive edge.
Since we’re preparing to enter 2018, take note of the importance of designing and implementing your digital transformation strategy. Also keep in mind, that this is a continuous process that you’ll have to constantly adapt in order to keep up with technological disruption.
Thanks for reading and see you next time!
Your team here at skeeled