6 Reasons Why Digital Transformation Is Essential 2020

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There is a lot of hype around ‘digital transformation’, it’s the next best thing, the problem is, there is also a lot of confusion surrounding digital transformation. We will be addressing those misconceptions. We will look into why they come up and how they can be corrected.

The forces of change are here – the fourth industrial revolution, or Big Shift has fundamentally transformed business, economy and society. Organisations face a radically shifting context in – workforce, workplace and the ways it serves it’s customers.

In this post, we are going to:

  • Clear up the ‘what is digital transformation’ misconception,
  • The drivers of those changes, how is the workforce, workplace and customer needs changing, and
  • What you need to not just survive, but strive in 2020.

Misconception #1

But first, let’s discuss the first misconception.

Digital transformation involves a Business that is using or adopting new technology or digital technologies, to change the way the Business operates.

To be explicitly clear – it isn’t ‘digital’ a.k.a digital technologies that are transforming.

Instead, ‘business’ transforms through the use of digital technologies.

We’ve given an example of digital transformation in our previous blog post here.

But first, let’s discuss the first misconception.

Digital transformation involves a Business that is using or adopting new/echnology or digital technologies, to change the way the Business operates.

Misconception #2

A lot of businesses think digital transformation is the next big thing.

But there’s a problem, and the problem with digital transformation is two-fold:

    1. ‘Digital’ is the only focus by those in charge, or those leading the change.

It’s perceived that ‘because ‘digital’ is ‘transforming’ it creates a sense of urgency or panic.

Take for instance the infamous Y2K hysteria in the 1990s.

The Year 2000 bug or Millennium Bug as it was called then led to an emphasis in immediate and radical change because a lot of digital products would cease to function.

We all know how the story ended.

Although the armageddon didn’t materialise, it did instil a culture or phantom known as the ‘burning platform’ phase, which lingered around like a bad smell for the next decade or two.

People were constantly reminded that technology is our friend, but if not watched closely, it could also become a foe, which means everyone is focusing on it.

While focusing on digital isn’t a bad thing, there are some aspects of the Business’ transformation that you might ignore with an overemphasis on ‘digital’.

This leads me to my second point.

  1. If you focus too much on the ‘digital’, what is it you are not focusing on?

A data-driven organization is perceived as the next big thing.

Yet the Harvard Business Review found that there are critical challenges that companies must overcome before they can reap the benefits of digital transformation.

In fact:

An eye-opening 77% of executives reported that business adoption of Big Data or AI initiatives remained to be a major challenge.

An eye-opening 77% of executives reported that business adoption of Big Data or AI initiatives remained to be a major challenge.

Additionally, only 7% of these executives cite technology as the challenge to adoption to digital transformation. Instead, 93% of respondents identify people and process as the key challenges.

Clearly, people and process are the biggest enablers of change – but 40.3% identify lack of organization alignment and 24% cite cultural resistance as the leading factors that contribute to the failure of digital transformation.

Drivers for Change

As mentioned, there are a number of drivers at play that are causing the Big Shift. These include technology (it’s everywhere, and soon to be clothes and shoes), AI, cognitively, robotics, automation & impact on jobs; the tsunami of data; diversity & generational change; change in the nature of a career; and explosion of contingent work.

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Not only the rate of amount of change, but the rate of change has increased. Moore’s Law proposes that computer power doubles in capacity every 18 to 24 months, not only should they get faster; we should pay less for them.

Drivers for Change

In recent research, Accenture stated that 31% of companies have invested in AI in an effort to get ahead of the competition.

If you’re a Business Owner, Business Leader or Business Consultant, that should be a cause for a concern (or opportunity, whichever way you look at it).

What has that brought is changes in the workplace, workforce and customer demands.

Changes in the workforce, workplace and customer demands.

These are the changes this 4th industrial revolution is bringing now:

  1. Worker centric approach to the workforce
  2. Customers want multiple channels to interact
  3. Customers want to self-serve
  4. User experience is positive, intuitive and consistent
  5. Technology is up to date, secure and underpinned by robust data

We will discuss each of these below:

  1. Worker centric approach to the workforce

This is a business-driven culture that has embedded into the workplace the fair treatment of staff. With this approach, you can improve workforce performance level in the area of design thinking, inside-out and outside-in perspective, and essentially, welfare.

Employees will switch employer, process or system that no longer focuses primarily on paying attention to employee’s engagement, but rather supports the total employee experience.

In terms of Employee experience, this is the BIG BOOM! A great employee experience, like a great customer experience make employees stick around for a very long time. It saves the company time and money in turnover and rehiring and training costs and builds up the company and tacit knowledge.

  1. Customers want multiple channels to interact

To satisfy your customers, make things easy for them. Customers are after quality, comfort, and value, and a great percentage have migrated from an outdated to the digital smart life.

Customers are tired of the old, they want to break out of the norm, and they are looking leaders who are shaking up the status quo. Look what Revolut is doing to the UK banking market with Open Banking, nicknamed a Challenger Bank for taking on (and winning) against the incumbent High Street Banks that refused to adopt to growing customer need for new and integrated technology.

The traditional way of communication might be holding you back, you need to up your game to regain business stature. The smart phones does the magic, a communication system built around email or app or chat bot can make all the difference.

TechCrunch, reported one-third of all purchases during the 2018 holiday shopping season were made on smartphones. That means, if you aren’t on mobile, or your products and services aren’t accessible by or on mobile, they’d better be!

Just as Customers are building expectations and they don’t just want their problem solved, they want the best experience, so are Employees, looking for not just companies that stay up to date, but are leaders in their markets.

  1. Customers want to self-serve
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The self-service option has become the preference of today’s customers. They would rather help themselves with their own hands than pick up their phone to call for support. That old model is dying fast. Previously it took too long to solve the problem having to wait on a phone queue or a receive an reply to a support for a query.

It’s actually easier to get more customers to self-serve than to get more customers you can serve. To do this though, you need to understand your target market, then choose the right channel to launch out your service deliveries. An (Interactive Voice Response) IVR tool is the commonly used tool for self-service, but with too much background noise or strong accents, they become more painful than useful so if you us IVR, it needs to be good, or you risk receiving more complaints about your IVR on top of complaints or queries about your products and services.

If you want to scale, you need to set a self-service plan. And this plan must be built with everybody in mind, for audiences that can access support in any location, and on any device from desktop, mobile or tablet.

Depending on the size of your business, you can set up self-service from suppliers from IBM, SAP to Infusionsoft, fully automating your front and back offer services, from payments, receipts, to account opening, including integrating your support Chatbot to automated email responses.

  1. User experience is positive, intuitive and consistent

User experience is the overall experience your customer (and employee) has with your organisation, including using your products and services. That experience has to be positive, intuitive and consistent.

In the era of ‘digital’ and ‘instant gratification’ Consumers want everything now, and they don’t want to think too hard about it. Sometimes, they don’t even want to think?!

What this means for Business Design, and product and service design for that matter, is User experience should be designed in a way that people from every department or walks of life (including people with disabilities) can gain access to your service, find it easily and the experience is consistent whether they were speaking with people in different departments, within the same department, or via different challenges (e.g. website, or telephone). How many times have you spoken to different people in the same department and got different answers to the same problem? This doesn’t just instil lack of trust in your company but potentially loses the customer.

The key to a good Customer experience is to:

  • Removed waste from your processes and systems (TIM WOOD – Time, Inventory, Motion, Waiting, Overproduction, Over processing and Defects, the LEAN acronym for the 7 Wastes)
  • Remove handoffs between staff members in the same and different departments (i.e. solve the question or issue at the first point of contact)
  • Provide enough information (i.e. the minimum) at each steps of the process for the customer to make a decision to proceed to the next step (i.e. it adds value) to allow the User to progress on their own, and not raise any unnecessary queries.

These tips can set the pace for designing ground-breaking plans that will reform your Organisation.

Use User experience design to enable your Organisation to become intuitive, swift and effective, and organise itself in a way that users don’t have to think, they only have to touch, read, scroll and interact.

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Old Business Transformation Methods Don’t Fix Today’s Problems

Use User experience design to enable your Organisation to become intuitive, swift and effective, and organise itself in a way that users don’t have to think, they only have to touch, read, scroll and interact.

  1. Technology is up to date, secure and underpinned by robust data.

Customers and Employees want modern, up to date technology. But here’s the news flash – Your Customers they don’t care if it’s based on a relational database, AI, SOA (Service Orientated Architecture) or SaaS (Software as a service).

[That last point is a lie – if you are still asking your Users to download and install an application on their desktop, you better look for a new supplier, or team of IT developers, or your competition will!].

What they want is a fast, reliable service and when they need to -only have to do that one process they do one hundred times a day, or once a year, to be easy, in one place, usually the same place, and if they forget their passport, make it easy to create and re-generate a new one.

They will get annoyed if the instructions or guidance are hard to follow, require resetting the pin or password each time, or need to download an app to their desktop each and every time they access or use your systems.

Customers know one part of the Business holds their details (i.e. banking), they don’t want to tell your Credit Card staff the same information, you already hold. They expect your Technology to be connected, securely accessing and updating a single source across all your business lines.

The key to good connected technology that only you (not your customer) cares about:

  • Technology should be designed with the User (both Customer and Employee) experience principles in mind, and with a digital mind-set.
  • Solution and growth designs focus should be seton robust, business-defined needs, and
  • Adopt an agile-mindset, practices and ways of working to be constantly scanning the horizon for disruption and disruptors and testing new ideas and tech on customers, services and products to stay ahead of your competition!

AI is set to feature extensively in the coming years in every CIO agenda, with its current up take in its infancy. Gartner Interestingly reported15% of all customer service interactions will be handled solely by AI in 2021, a 400% increase from 2017.

Gartner Interestingly reported 15% of all customer service interactions will be handled solely by AI in 2021, a 400% increase from 2017.

With the right design, process and systems, you will give you’re a streamlined, seamless and consistent customer experience, with customized services that is never limited by location.

Remember – A happy customer, is usually a repeat customer (same applies to Employees – they’re happy, they stay, better yet, they drive more business to you)!

Thank you for reading this, hope you found a lot of value in it!

Sincerely,

Heath Gascoigne

P.S. If you want to join our Business Transformator community of like-minded Business Transformators, join the community on the Business Transformator Facebook Group here.

P.P.S. If you want to learn more about business transformation, check out The Business Transformation Playbook here.

For more information, visit https://www.hoba.tech

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Heath Gascoigne

Heath Gascoigne

Hi, I'm Heath, the founder of HOBA TECH and host of The Business Transformation Podcast. I help Business Owners, Leaders and Consultants transform their business and join the 30% club that succeed. Join me on this journey.

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