Corporate Risk aversion can be the largest impediment to initiating digital transformation and today’s rapidly changing environment makes this a strongly counter-productive force.
Digital transformation is growing across all industries, but the rate of its growth has not been steady. The speed of technological change is constantly and explosively accelerating, with new capabilities being rolled out faster every year. Previously, businesses had time to track trends, watch the success of new applications in various settings build over time and evaluate whether or not to adopt them. (A continuing example is the turnaround window for 3D printing to develop from a superfluous novelty into countless, now-essential applications.)
Now, however, new capabilities and technological mashups pop up almost every week, and companies find themselves at decisions on whether to invest in a solution that didn’t exist a year or even six months ago. As technology makes its ever-quicker way from idea to mainstream application, it’s important to ask how digital transformation consulting can help businesses respond to a firehose of options.
Measuring the “Steepening Trajectory”
A Harvard Business Review (HBR) Analytic Services global survey characterizes the pace of digital change as a “steepening trajectory,” and notes a “tightening digital race across all industries” as businesses increasingly view the digital ecosystem as the prevailing field of competition. Every year, more companies predict sizable increases in performance due to integrating new digital technologies. In two years, according to the survey’s forecast, 65 percent of business leaders will expect to see substantial impact from their digital technologies, while as of November 2016, only 21 percent made that statement. The nature of the impacts that these business leaders expect include revenue and profit increases as well as improved customer satisfaction and loyalty.
New Forms of Measurement
As the science of digital analytics matures — or at least emerges from its infancy — more areas that were previously qualitative are yielding to automated measurement. Even content can now be scored algorithmically against competitors, revealing gaps and opportunities in content that a company posts online. One example of this type of service is provided by 8 Point Arc, which provides software to analyze, measure and score the value of a company’s content. Comparative measurement tools speed up the vector of change, as actionable feedback can happen nearly instantaneously, instead of relying on the slow aggregation of feedback drawn from customer responses.
New Mandate for Talent
While HR processes are becoming increasingly automated, the surge in technology has paradoxically resulted in a growing need for employees with non-tech-centered skills. The HBR researchers note that “businesses are focusing on strategic and cultural abilities such as customer problem-solving skills, change management, and the ability to communicate and collaborate.” As digital becomes the context within which the entire company operates, fewer people with dedicated technological skills are needed. This evolution in skill-sets underlines the fact that digital transformation is not reducible to mere technology.
A Confluence of Factors
Struggling visibly within this phenomenon of shifting specialization are legacy retailers, who are exposed to tougher challenges than ever before in their history, with many falling by the wayside. Mainstream chatter would suggest that this slippage is due solely to ecommerce, but the real answer is far more complex. Ecommerce has actually been around for some time, but these classic stores didn’t really begin to go underwater until they were affected by a confluence of digital capabilities.
As the very atmosphere surrounding shopping has changed to become more personal, legacy retailers are having trouble trying to play catch up. Customers increasingly expect a highly personalized, immersive shopping experience, and this is a far easier achievement for new brands than for those with legacy protocols for evaluating innovations. Doing business in the new digital ecosystem requires more than a simple technology patch or an isolated update. It demands a recognition that the whole background context of the marketplace has been transformed. This cultural change to can be a huge challenge: Where companies once might have taken a cautious wait-and-see approach, they are now forced to match the accelerating rate of digital change, or risk being washed away by the next wave of technology as it comes crashing in.
Using Technology to Balance Risk Aversion
Risk aversion can be the largest impediment to initiating digital innovation, and today’s changing environment makes this a strongly counter-productive force. This mindset can be especially characteristic of the financial industry, which is one reason that the field has been so fertile for fintech startups. Fortunately, the concerns of risk managers and finance officers can be alleviated by what they have the greatest faith in, numerical data. Quantitative benchmarking and real-time feedback are highly effective at countering traditional impediments to agility, and leaders at financial institutions can gain confidence from the measurability offered by digital strategy consulting.
Contextualizing the Process
The sustainable way forward requires alignment across all six layers of digital: people, process, platform, product, channel, and experience. Habits formed during earlier stages in digital evolution can cause older brands to overlook one or another aspect of their business functioning, and even one part overlooked means that an entire digital innovation can fail. A company may install a great customer experience; it may integrate a flagship native app as well as awesome “mini-apps” (as leading enterprises are now doing); it may have great products, fantastic marketing, and build it all on an excellent platform; but if the process is broken then their strategy won’t be successful. Likewise, if all factors except for the people are aligned, the company culture may resist the new strategy and doom it to failure. By aligning all six factors, Centric Digital helps to quickly orient companies to the full matrix of what’s needed in order to achieve sustainability in the digital ecosystem.
Rapid Customer Insights
While a change in ecosystem will be felt throughout all facets of a company, the element of customer experience is always front-and-center. Increasingly, apps figure prominently in that customer experience mix. Processes for receiving and analyzing mobile customer data are speeding up, in order to supply insights for this key channel. One interesting set of data points comes from measuring how many customers keep the apps they download. In general, users download large numbers of apps, but delete most of them. The reason for these deletions is that the app doesn’t deliver the seamless customer experience that the person was hoping for, or it doesn’t help them do what they wanted. eMarketer notes that 70 to 75 percent of downloaded apps are retained for less than one day, while at the end of 30 days only 3 percent of apps on average were still being used.
Another interesting app statistic is that apps installed for organic reasons are 156 percent more likely to be retained after 30 days than apps that are downloaded by clicking on paid ads. The mention of organic reasons suggests an omnichannel customer experience, in which the customer has heard about the app because they are already a customer of the business, or because they have an existing interest in that brand.
Technology is the Impetus and also the Solution
Technology is driving the growing rate of change, but it also provides the core of a solution to the question of how companies can stay (or become) agile. Software for benchmarking and scoring means that evaluating a company’s current status with respect to its competitors and its own capability can be completed in a matter of mere days, rather than the long-term evaluation that used to characterize such reorganizations. With this in mind, Centric Digital is uniquely leveraged to be able to assist in these scenarios, as it provides a rapid data-driven benchmarking process that takes a full snapshot of an entire business without requiring the amount of time that a classic hand-done analog analysis would require. We evaluate the entire digital ecosystem to provide businesses with the full suite of organic reflexes they need to pivot and move gracefully in today’s fast-changing digital environment and in this way, we help businesses understand where they are and where they should be investing in digital.