Digital Transformation: Hype or Core Business value?
John Chambers, Executive Chairman of Cisco Systems, stated in 2015, “40% of all business will die in the next 10 years if they don’t figure out how to change their entire company to accommodate new technology.” Despite his warning, several businesses will die within 10 years because navigating the jungle of business and technology is challenging, which requires knowledge and a little bit of luck.
To survive, businesses must respond to market requests faster than competitors, deliver better services, and exceed customer expectations, which nowadays are extremely high. The solution lies in transforming the way companies operate by integrating technologies and new models of operation and collaboration across all areas of a company. And the key to understanding such fundamental changes is in education and guidance from experts. That is why XM^ONLINE CEO Victor Kmita, participated in a digital transformation workshop organized by Edinburgh Business School for leading Ukrainian business journalists.
“In XM we truly believe that business needs to understand how digital transformation can benefit, which stages a company goes through on this way and why proper business automation is so vital for enterprise just right now. Innovation always comes with an idea, the last one is created by people. So the most important change should be in our minds.” Victor Kmita, CEO XM^ONLINE
To clarify the future of digital transformation from a business perspective, Victor explained to journalists and media managers why businesses need innovations, the starting points and organizational ways to implement changes, and how to measure digital success.
What business questions can digital technology solve?
Technology can address a broad range of problems, from understanding what's going on in the world with the Large Hadron Collider, to making space travel more affordable with SpaceX's self-landing rocket. However, there are strategic questions businesses must answer to go to the next level:
What services or products we can also offer our customers? Product concept, client’s loyalty, perceived quality.
How do we become a one-stop-shop and retain clients?
To whom and how can we sell our products? Which cross-domain offerings can we deliver?
How to minimize the overhead costs of company growth and customer acquisition?
The measurement of project efficiency includes identifying:
What operational tasks require too much time, money, and resources?
Which technologies provide a 10X boost to operational efficiency?
Digital transformation can help with these issues. But how? You start with analysis - the core of consumer-focused transformation.
One of the digital transformation issues needing to be answered is defining what technologies are in-demand. To be sure that the product will meet customer needs you must:
Know what technologies your target audience already uses (omnichannel, AI, Blockchain, etc.)
Measure the efficiency of current activities
Find a new service approach and business model
Business analysis of the market will answer these questions and prodive valuable insight into idea developments, which path is the best option to take.
Moreover, it’ll help to forecast the cost of this process, because business innovation demands great knowledge as well as money. So, where do you get valuable resources and inspiration? Ask professionals.
Organizational structures for innovation departments
Several companies reduce technology integration complexity and foster idea development by utilizing funding opportunities.
Independent Innovation Division (DTEK Innovations, Modus)
To cooperate with any of the above sources, requires first having a clear strategy of what you'll do to bring your idea to life. But if innovation is a unique thing, the mechanism of its realization is not.
Today’s blue ocean of innovations
Building a strategy to transform a business to digital should be guided by the following steps:
Big Data is a source of consumer insights regarding banks, retail, and telecommunications activity.
Industry 4.0 — industrial digitization, service models for device use, big data in the industry.
Mathematical models of the industries' processes.
Aggregation of competitors' data, conclusions for the benefit of the industry.
You can combine them or choose the one you find most profitable for your business. To ensure that you're on the right way, every decision should be analyzed to understand the results.
Measuring the efficiency of business innovation
One of the essential parts of technology integration is the analysis of its performance in action. To understand was it successful or not a business should monitor:
The innovation process:
Projects’ number and cost.
The number of ideas and involved staff.
The innovations result:
NPS/Customer Effort Score.
Metrics of the key company areas performance.
However, innovation is a never-ending race. So, keep an eye on the market because it's a great source of inspiration.