Digital transformation is the process through which companies can take a new look at their existing processes and remake them with the help of new technologies and new ways of thinking.
The aim might be to cut costs, understand customers better, or create new revenue streams. It's a relatively simple concept but hard to put into practice; here we look at some of the issues involved in such a project.
Marketing: How to create a digital-first attitude
Customer experience (CX) is the big priority for marketing professionals through 2017, says Jim Clark, research director at Econsultancy. He draws on evidence from the research firm's recently released Digital Trends 2017 report, which surveyed over 14,000 marketing professionals globally. Almost a quarter (22 per cent) of marketeers say CX is their key concern this year.
Clark, however, issues a word of warning and suggests great experiences are by no means a given: executives must focus on techniques that help their business exploit data in an integrated manner. "CX is in itself important, but marketing professionals must think now about how they implement experience as a strategy," said Clark, speaking at Adobe's recent Digital Trends Forum in London.
The good news is that almost half (46 per cent) of firms believe that digital now permeates their marketing efforts. Clark says easy access to the cloud and software-as-a-service is helping marketeers to harness digital technology quickly in their attempts to change business processes and customer experiences for the better.
There is interest in technology to spread insights, too. Almost half (49 per cent) of marketing professionals intend to increase their investment in analytics this year. However, the research suggests that digital transformation is a far from straightforward process. Just 14 percent of marketing chiefs described their business as a digital-first organisation in 2015; today, that figure is even lower at 11 per cent.
"The reality of the situation is that implementing digital transformation is tough," says Clark. "Some boards might not be as fully behind change as others. Having the right skills in place is key to engendering full cultural change, both in terms of understanding the customer and linking those trends back to the business."
Clarke points to best-practice examples in strategy. He says smart companies are findings ways to converge sales and marketing teams, ensuring customer data is pooled across the business, rather than being held in isolated and unconnected stove pipes.
Leadership matters, too. More than three quarters (77 percent) of blue-chip firms now have a chief customer officer or equivalent, according to analyst Gartner. These C-suite executives are focused on building and pushing the focus on customer experience across the business' various operational activities.
"Data-driven marketing technology is now a lot more accessible but there needs to be an awareness in terms of engaging audiences," says Clark. "Your business needs to fully understand the key trends to engage with customers personally. As new technologies like VR roll out, that focus on personalisation becomes even more critical."
All firms, he says, must look to continually surprise and delight their customers. "It can be difficult to engender digital-led change, particularly in a sector like finance," says Clark. "One way is to start small on key projects, and to hope these examples pick up traction and that the benefits permeate across the rest of the organisation."
Building a digital foundation in financial services
Chris Worle, digital strategy director at Hargreaves Lansdown, is one executive driving transformation in a finance firm. Worle manages digital-led change at the FTSE 100 business, which manages £70 billion of assets on behalf of its 876,000 clients. Worle and his team run a website that receives more than 100 million visits a year.
"We're seeing huge growth in mobile, both in terms of the use of our apps and direct visits to the website," he says. "The number of trades via mobile is up 200 per cent year-on-year. This has consequences in terms of the experiences we provide, because we pride ourselves on a high quality of service."
Worle recognises the number of channels to market has grown rapidly since the firm started its transformation journey in 2008, as has the number of products offered to clients. The digital team started sifting through huge volumes of data to keep a tight grip on customer experiences, but found itself swamped with information.
"We took a breath and decided to start small instead," he says, looking back on the digital change process. "We then took a strategic approach to testing and optimisation. Rather than focusing on the entire website, we focused on quick wins connected to high-volume web pages. We used that insight to drive improvements."
Worle and his team honed website content and launched the firm's first app in 2011. Yet transformation in the mobile age remains a work in progress. "We find ourselves today in a constant cycle of measure, understand and improve," he says.
The modern digital challenges facing Hargreaves can be summed up by three key terms, says Worle: complexity, speed and expectations. "There's a requirement to create a consistent experience across multiple channels and that's incredibly difficult," he says, referring to the issue of complexity. "We're actively working on cracking that approach."
When it comes to speed, Worle says his organisation feels the pressure to innovate and deliver solutions increasingly quickly. "Technology is moving faster than ever before," he says. "People will drop off, and you will lose their business, if they have to wait even just a few seconds for a web page to load."
The final challenge is around expectations and the ever-demanding nature of modern customers. "Your business will be judged against the digital experiences that people get everywhere else, be that from technology companies like Google or via online retailers," says Worle. "Customers don't care that you're a regulated finance firm -- they just expect the same high quality of service, regardless of sector."
The good news is Worle continues to deliver great customer experiences. The key lesson for other CXOs is to recognise the importance of mobility. "Most of our clients use mobile as their main communication channel of choice," he says. "The business needs to focus on the fact that mobile is more than just another channel -- and that's a constant battle."