05 May, 2014
Digital solutions have being growing at a great pace. E-commerce is growing at space than other areas United States, European countries, India, and China. Recently 2 e-commerce sites in India have been acquired at huge amounts. People are taking to e-commerce sites for buying, comparing products and pricing. Businesses need to take advantage of this momentum, and should not wait and experiment but rather transform themselves into digital businesses. Most the companies are still trying to experiment and slowing the process. Six months ago I was asked to help to build a growth strategy for a local very successful gift store.
As I was crating their strategy together I built a very strong case that their unique value need to be capitalized and e-commerce is the best solution than opening multiple stores across the region. Now they have built e-commerce as its own business and ready to launch in few weeks. But that was not easy to get the management on board for this transformation. The reason is that this transformation is totally a new business model and the digital transformation is uniquely challenging, as it touches every function of business unit and requires rapid development of new skills, logistics, and investments that are very different from existing business.
To succeed this e-commerce strategy management need focus on how to reorganize their existing structures, processes, systems, and incentives.
This does not mean that this is going to be successful but you can see that there are plenty of successful business with insights, approaches and actions on their success.
Here are some things that need to be thought through when you are taking your business through digital transformation.
Create digital business that creates value and not just another channel to drive more activity. In order to do that the thought process should be totally different from running a regular everyday business. So the management need to be prepared and aim for that transformation and not settle for anything less. Companies need to set digital goals such as creating a market share, digital market growth which are downstream activities. Also the goals can be upstream activities such as automation, cost reeducation, stream line processes. If you not doing any of these you are not really creating a digital business.
Digital transformation requires new skills and capabilities that may not exist within the business. Management must do a realistic check on their existing workforce. A person’s digital skills and understanding of the digital solutions is very important than having domain knowledge or experience in that business industry when starting a digital business. The best people in digital product management or user-experience design may not work in your industry. Hire them to execute your digital strategy and to create a new culture in the company.
Customers expect seamless experience across the brand channels. Build a seamless integration of systems, processes, and customer service across digital and analog channels. You might not this right away but should be what you are working towards.
It is very difficult for an existing business to challenge the existing services, products, and process. The management need must aggressively challenge the status quo rather than accepting historical norms. The new entrants are constantly trying to find a better solution, service or product than what you provide and bring in a digital disruption in your business area. So do not assume anything and start asking “why” on everything you do.
Digital leaders examine all aspects of their business—both customer-facing and back-office systems and processes, up and down the supply chain—for digitally driven innovation.
Management need to see how to build partnerships to deliver new value-added experiences and services instead of building everything ground up.
Rapid decision making is critical in a dynamic digital environment. Create a cycle of continuous delivery and improvement, adopting methods such as agile development or Lean Methodology and “live beta,” supported by lean data analytics, to increase the pace of innovation. Continuous improvement requires continuous experimentation with right metrics, along with a process for quickly responding to bits of information. If you are not changing behavior according to the data than that metric is not what you want. You need to find the right metrics for each goal.
Create dashboards for each area of organization by integrating all the data sources which can be accessible to everyone in organization. This data will provide their own performance, so those areas can change their behavior right away. This will increase the speed and make the company more innovative than coming up with monthly/quarterly reports.
Many businesses focus their digital investments on customer-facing solutions (downstream activities). Bur businesses need to focus as much if not more in back end business functions that drive operational efficiencies (upstream activities). A digital transformation is more than just finding new revenue streams; it’s also about creating value by reducing the costs of doing business. This can be in form of automation, integrating various systems in house and with 3rd party solutions. Often, great value is found in optimizing upstream activities.
Rising customer expectations continue to push businesses to improve the customer experience across all channels. Excellence in one channel is no longer sufficient; customers expect the same seamless experience in a retail store as they do when shopping online, and vice versa.Management need to go through the customer journey and customer touch points and identify the pain points and gaps in performance and build a right process throughout the customer journey that is seamless to customer. Create processes that enable businesses to capture and learn from every customer interaction—positive or negative—help them to regularly test assumptions about how customers are using digital and constantly fine-tune the customer experience. Customer experience is the foundation of any digital transformation.
These strategies if done well will transform your digital business into a profit powerhouse.
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