Do you know where you stand against competitors by benchmarking your digital transformation?
We are in a digital age—you know it, we know it, and (more importantly) your competitors know it.
As a result, businesses are going through digital transformation across all industries. Companies are adapting and trying new things for better customer engagement, including:
- Monitoring health care and activities with wearables
- Using a smartphone to order a cup of coffee
- Reading an email on a smartwatch
- Having a doctor’s appointment via smartphone
However, research shows that only 5% of organizations feel they have mastered digital to a point of differentiation from their competitors. While businesses may plan to improve the online customer experience, there are few out there who are completely ready to execute digital strategies.
For those who are not on top of the digital trends and transformation, disruptions are inevitable—just take it from the transportation, financial services, or retail industries. Companies like Uber, Square, and Amazon are beating big-name companies with long-standing reputations simply by having a better digital strategy in place.
While there are many ways you can head off digital disruption, there is one particular strategy that will help you stay one step ahead: benchmarking.
What is a benchmark?
Many companies make the mistake of judging performance compared to other units or departments within the same company. This is similar to a runner trying to beat their own best time for a ten-meter dash. While this strategy is helpful, it’s also smart for the runner to try to beat the best time of their fiercest competitor as well.
In order to reduce complacency, companies should aim to meet and exceed the best industry practices and strategies—and use them to promote adoption within the organization.
That’s what a benchmark is—a side-by-side comparison of one company versus other companies that are competing in the same industry or space.
Comparisons across competitors can help identify positional gaps in your strategy. Measuring against benchmarks could reveal weaknesses in your website, mobile experience, social media, digital strategy—and the list goes on.
Gaining a level of insight that allows you to evolve your strategy based on your competitor’s external strategy will keep you one step ahead of them—and any disruptions they may cause.
How can benchmarking guide digital transformation?
The first thing you should benchmark is your digital strategy. If your competitors don’t have one, well that’s good news for you. If you don’t have one, you’ll need to get one in place.
Now, assuming you do have a digital strategy in place, imagine you’re the new Chief Digital Officer (CDO) of your company and you walk into the office. After your mandatory cup of coffee, results of your benchmark should be the first thing you see. Metrics and measurements of your company’s digital capabilities compared to your peers will give you guidelines as to where are your biggest gaps are so you can focus on those you deem most important.
As new digital trends come up, it is extremely important to understand the differences between what you and your peers are doing. This is vital for any level strategy.
Take the financial services industry for example. This entire industry is now realizing the traditional way of doing business is getting disrupted by a whole new class of competitors—digital companies. Businesses like Google and PayPal are giving the financial services industries a run for their money, and they’re doing their best to keep up. What these companies must now do is measure what their company is doing against the benchmarks of these new digital competitors.
Another aspect to benchmarking is weeding out practices that are unworthy of emulating. This is a task that the guidance of digital experts can help with. An expert can also help you uncover potential digital competitors you may not have even been aware of. This is why hiring an expert to benchmark your digital capabilities and focus your strategy accordingly can really help to streamline the process.