Companies of all sizes are shifting their traditional business models in order to adapt to today’s rapidly changing business environment. When steering a large-scale enterprise through this shift, however, an organization faces a unique set of challenges and potential risks. It’s helpful to explore the question of why digital transformation is especially challenging for large companies, and to review some sample approaches through which forward-thinking enterprises have met those challenges.
Here are four issues that large organizations face:
1. Overlooking Customer Experience
Due to their size and complexity, larger enterprises have more inertia to overcome when it comes to initiating digital innovation. Their business models traditionally have been formulated through a lengthy process, and the entire corporation cannot simply change its nature overnight. Traditional business models are typically not customer-centered, and it is this failure to prioritize the customer experience that demonstrates that an enterprise is operating under a pre-digital set of mandates.
A Forrester research report referenced in Entrepreneur addresses this concern, reminding large organizations that they must “enhance the knowledge of and engagement with customers, and prioritize these over maintaining traditional competitive barriers.” Forrester even states that “it’s not enough to be customer-centric — in fact, companies should be customer-obsessed.” According to Newpath Web CEO Nathan Sinnott, companies that have adjusted their business model to deliver an improved customer experience are outperforming the Standard & Poor’s index over a six year period.
To witness effective digital transformation at the large enterprise level, we can look at the new experiences now available to Lowe’s customers. The home improvement chain is currently rolling out a new augmented reality app for Google’s 3-D smartphone platform Tango. The app will give Lowe’s remote customers a chance to visualize how potential furniture and appliance purchases will look in their home. It removes the chore of measuring space, since it allows the customer to map entire rooms of their homes through the AR lens of a smartphone equipped with two cameras. These accurate automatic data points mean the customer no longer has to go back and forth between tape measure and product descriptions. Furthermore, shoppers are able to see how an appliance or other item will look in its intended setting.
This AR app is only the beginning of Lowe’s daring foray into customer-centric technology, however. The retailer also recently announced a partnership with Microsoft Lens, allowing in-store customers at selected Lowe’s locations to design an entirely new kitchen and then walk through it in virtual reality, assisted by a headset. The customer can choose their own preferred appliance finishes, paint colors, and room configuration, and then “stand” in the room they create and see how they like it. These selections can all be altered in real time, while remote friends and relatives can follow along on their own mobile devices. This merging of remote and in-store experiences demonstrates that Lowe’s has a clear vision for utilizing the emerging digital ecosystem.
As an example of how a digital business model places customer convenience ahead of traditional boundaries and definitions, this home improvement store has begun to sell the Lenovo Phab 2 Pro phone (currently the only device that can run the Tango app). Lowe’s willingness to step beyond its normal inventory and sell the device its users need in order to take advantage of the AR capacity demonstrates a microcosm of the changes companies will need to make to remain competitive in today’s digital age.
2. Internal Resistance from the Workforce
Although a portion of the workforce will be open to new ways of doing things, change generally precipitates widespread anxiety, especially in an enterprise with codified procedures and processes. Neither employees or executives will necessarily embrace the prospect of stepping outside their established comfort zone, and various measures must be taken in order to quell the fears that may block innovation.
Centric Digital’s digital strategy framework incorporates “people” as one of its layers, because without full buy-in throughout your organization, even the most advanced technology will not bring about the necessary deep cultural change. At the executive level, Adobe strategist Scott Rigby points out, only 6 percent of companies surveyed said they could describe their board of directors as “highly digital.” Harvard Business Review offers some key insights that will likely ring true for you if you’re currently spearheading digital innovation in your company: “Digital tools free people throughout the organization to share information easily. Communication managers no longer have total control over message, target, and timing of news and announcements.” It’s clear how this disruption of established practices can be perceived by managers as an existential threat.
The HBR analysis goes on to list other power centers within an enterprise that can feel threatened during the transition to a digital business model: Enterprises frequently have their own in-house IT teams, and these experts may have doubts about tapping into subscription-based third-party solutions that work in the cloud instead of in the organization’s own computers.
As an outcome of her extensive survey on digital transformation challenges, HBR analyst Jane McConnell notes that “work cultures can either accentuate or alleviate these obstacles.” Her research finds that enterprises that are most successful exhibit at least one of the following traits:
- A strong sense of purpose shared by all employees.
- Freedom to experiment, regardless of the position held.
- Decision-making authority distributed throughout the organization, rather than restricted within a hierarchy.
- Openness to external input and a willingness to go beyond the interior information loop.
Looking at specifics, one outstanding solution that has won over reluctant workers in the healthcare industry is the growing popularity of video conferencing and telehealth. Cisco and other platforms offer networks that instantly connect doctors with their patients and other members of the hospital staff, providing extensive benefits to all concerned.
3. Unclear Vision for Meeting Customer Expectations
Within every industry, it’s essential that every company develop a clear and concise vision of how they will simplify and enhance the customer journey. Each “micro moment” or individual touchpoint of that journey can be examined for improvement opportunities. The benchmarking process should also analyze how effectively your competitors map out their own customer interactions. Does the competition prioritize and enhance customer experience?
After doing market research on competitors, the next big milestone in developing a digital roadmap should be identifying industry trends that influence customers’ expectations. The granular data generated by a full-scale benchmarking process is invaluable in providing clear-cut insights that can drive the innovations selected. Once innovations are initiated and set in place, further benefit will be extracted from the feedback of live testing. “Beta users” can generate data on user responses and emotions that will be extremely helpful in discerning which approaches work best.
Cultural transformation is possible, even within an institution as cumbersome and complex as the U.S. Government. The public sector traditionally has been last to adopt emerging tech trends, but that stereotype is no longer accurate. The U.S. Digital Service is rolling out a playbook to deliver policy and programs in an effective omnichannel manner. It wants to reach out to its constituents through websites, email and various mobile applications. In order to execute this plan, the Digital Service has turned to the example set by private industry, identifying 13 “plays” based on private sector best practices. These include such goals as making interactions simple and intuitive (not terms typically associated with government services), deriving value from being data-driven and building services in an agile, iterative way.
Another example of gaining insight through feedback from beta users can be seen in The Rubicon Project, which invites users into a beta version of a new intelligent platform for delivering customized advertising.
4. Ignoring the Mobile Imperative
The consumer base is connected to their smartphones more with every passing season, with over 80 percent of U.S. shoppers using multiple devices to go online, and spending over half their online time on smartphones. The imperative for every company is to get up to speed with this emerging technology, to stay connected with their core base. Despite the fact that more people access the internet from their phones than from computers, the conversion rate for eCommerce sites is still lower on smartphones than it is on laptops or desktops. This indicates that the mobile customer experience still needs improvement, to create a deeper sense of customer intimacy and new potential revenue streams.
With the eCommerce industry looking to bridge the gap between banks and their customers through Digital, Pitney Bowes recently debuted its app ‘EngageOne Digital Delivery,’ an integrated delivery platform that communicates with customers through their preferred channel. The platform drives engagement by ensuring that customers can ask questions, initiate transactions, and receive statements with equal ease through any digital device or traditional paper post.
To successfully reach digital maturity, regardless of size, companies must place customer experience at the center of digital strategy. Unprecedented quantities of specific customer data are available for the taking and when analyzed within consistent, quantitative metrics, are providing new and valuable insights that companies can use to delight customers. Transformation is possible, even for the largest legacy organization: examples abound of enterprises that have digested and understood the emerging message of the future, and transformed their process-bound hierarchies into agile digital cultures.