Adapt or die: Why it’s time to rethink your digital transformation strategy
We should all have been surprised to read that a third of all organisations based in the UK have no digital transformation strategy whatsoever. We weren’t, of course, and not only because a further 21% of respondents said they were ‘just getting started’ with their own strategy and another 24% said their strategy was, if you’ll allow me to paraphrase, a little threadbare. We weren’t surprised because the failure of companies to adapt to the demands of digital is perceptible. And then, there’s the fact that at the mere mention of the phrase ‘digital transformation strategy’ you can almost hear the collective groan.
The research in question, which came courtesy of Computing, involved over 100 IT leaders at medium to large UK-based organisations. A larger sample size would probably have yielded even gloomier results. Though there’s nothing new about the need for a digital transformation strategy––the alarm began to sound years ago––the reality is that outside of the tech, media and retail industries, where the challenges of the changing marketplace were more perceptible, there are a large number of business owners who are not only slow to adapt but unwilling to do so at all.
This is especially true of long-standing industries, and the irony is that those brands who have wholeheartedly pursued digital innovation are now returning to more established industries and disrupting those too. Take all-conquering Amazon, for instance, who began as a digital business and last year launched Go, a real-world supermarket with a fully digitalised checkout process. In other words, the question of digital transformation is now one about danger as well as advantage. In January this year, the Boston Consulting Group, which counts among its alumni eBay director Bob Kagle, Pepsi CEO Indra Nooyi and former Republican presidential hopeful Mitt Romney, released an e-book in which they urged ‘traditional’ industries to commit to ‘fast, “always on” digital transformation’, citing not only the opportunities which come with that transformation but the grave risks of failing to do so.
The speed at which the needs of the consumer and the competitive field are evolving means, however, that developing a single, long-term strategy is no longer adequate. ‘Agile’ strategies involving a near-constant process of testing and refining are increasingly becoming the norm for leaders in the area. Renault, for example, is, if you’ll excuse the pun, racing to roll out a multichannel strategy, the goal of which is to digitise and develop a simpler and more personal relationship with their customers. In order to do this, they are simultaneously developing digital services to connect cars to Internet-powered navigation, entertainment and insurance services, testing new businesses and operating models, and adapting their marketing and sales processes. They’ve also built a customer database from customer journey information and identified what they call ‘moments of truth’: instants when Renault can intervene to influence a decision, convert customers to a sale or build loyalty. The Financial Times, meanwhile, has embraced a bold and successful paywall strategy that stands out among the other paywall strategies employed by its successors. Total paid selection has grown by 13% year-on-year, and digital-only subscribers account for more than three-quarters of this figure. Not at all bad in an industry that we’re constantly told is dying a fairly painful death.
The important thing to note here is that digitisation isn’t a separate branch or stream, or something you tack on to existing channels or products or services. Embracing digital technology is essential to staying profitable and relevant (and appearing to be relevant, which is almost as important). If you commit fully to digital technology, you can make use of it when you need it or reel it in as necessary. Adoption of new technology that is half-hearted and doesn’t underpin your company’s values or reason for being will be seen as such. The problems a lot of companies are facing come from the fact that they’ve pursued a policy of ‘best practice’ which does not relate to them specifically and practically guarantees mediocrity; if they had tailored their digital transformation to the needs and values of their company, they would have something more original, more suitable and more enduring. This far down the line, digitisation means identifying any structural obstructions and pursuing a policy of digital transformation without reservations. Companies who refuse to do this risk not only being surpassed in terms of revenue but being pushed out the marketplace completely by new and disruptive digital-first entrants.