Whether it’s the internet of things, the connected home, connected cars or mobile-first, an increasing number of industries are making “the leap” -- being reborn through digital transformation. In fact, with technology in the home and the continued evolution and ubiquity of smartphones, many traditional companies, some more than 100 years old, are transforming through technology.
The trend continues in 2019, and the way I see it, it is crucial for business survival. Underlining this, CIO reports that the International Data Corporation (IDC) has predicted that “40% of all technology spending will go toward digital transformations, with enterprises spending in excess of $2 trillion by 2019.”
A caveat: While digital transformation is changing our world, there is widespread overuse of the term, pushing it into the realm of meaningless “buzzwords.” Often, rather than transformation, companies are engaging in “optimization.” Digital optimization, or using technology to improve existing operating processes, can refer to employing a new customer relationship manager (CRM), a new website or a simple mobile app. These optimizations may use technology to improve a business, but they don’t fundamentally change the core focus as does a digital transformation.
This being said, there are many businesses facing the inevitability of figuring out how to create a meaningful digital transformation. Without a plan today, they risk being the victim of an Uber or Netflix that can disrupt their entire industry seemingly overnight.
At Metova, we specialize in helping businesses navigate the digital transformation process, and I find that the narrative is common: A business with a proven track record of decades or longer is faced with transforming. The majority of the DNA of the organization makes it operate as it always has, but there are threats on the horizon, and rather than get disrupted, businesses have made it their mission to be the disruptor.
A digital transformation plan is critical. But what are the core elements of a successful leap to digital disruption?
1. Hire Fresh Eyes
Hire a senior visionary with a deep understanding of emerging technologies, or bring in a partner who specializes in shepherding businesses through digital disruption. Structurally, most employees are busy performing their regular tasks, so they may not have the bandwidth or perhaps the perspective to address the challenge of true digital transformation.
When working with your “fresh eyes,” if you find yourself saying, “I didn’t know we could do that,” this is a sign you have the right team in place to lead you through digital transformation. To add, if you attempt digital transformation using your existing knowledge, chances are you’re not transforming, but rather optimizing existing procedures.
2. Understand Available And Emerging Technologies
We live in a constant flow of emerging technologies, and it’s important to carefully select tech that addresses your specific challenge -- not just the newest “buzzwordy” tech trend. From LoRaWan to 5G, and even artificial intelligence and augmented reality, there is an abundance of new technologies with unique capabilities and limitations.
Your internal or external tech expert can determine if these technologies are the right fit for your company’s unique needs. It’s critical to choose the technological path that solves your problems while creating real value for your company and your customers.
3. Understand Your Customer
Your customers are often more tech-savvy and comfortable using emerging technologies than you may think. Consider focus groups, customer surveys or larger surveys of the general population. Ask your target market about their tech and company interaction ideas and expectations. How do they want to do business with you? What are they missing from you today?
4. Know Your Competition
If your direct competitors are making the leap or a viable new disruptive business model is emerging, it’s not too late -- but it dramatically hastens your timeline. Use noncompetitive industries that have been digitally disrupted for inspiration. It doesn’t take a new tech startup to disrupt an industry, but oftentimes, those are the ones taking a fresh, novel approach to the problems being solved.
5. Understand Friction
As ironic as it may seem, often what internally is viewed as a differentiator, such as hands-on customer service or “real live” tech support, is a source of friction for the end customer. Take a look at all business stages and processes, and ask if any could be replaced, streamlined or reinvented through technology. You don’t want to give up on things your customers truly care about, but you don’t want to hang on to things they’ve already moved on from either.
6. Develop A Plan
When batting around transformative ideas, if your team says, “We hadn’t thought of that” or “Is that even possible?” then you’re probably on the right track. Take stock of all necessary components. Have experts in place, and create a timeline for implementation. Build a complete road map, and review it to ensure it meets the needs of your customers, solves your problems and is achievable.
7. Execute On Your Plan
You’ve done your homework. You understand the challenges and have put together a team. Now comes the easy part, right? Nope. It’s just beginning. Understand that there will be a substantial cost, a real business impact and that this will take time and resources. Prepare employees and stakeholders, and make this leap a priority to ensure you don’t stall out before you even get started.
Many businesses will be completely different in a year, and this will likely involve a technology pivot that their industries do not possess today. Coming to this realization and making the decision to leap before it’s required for survival is essential. Being the disruptor is the best way to avoid being disrupted.
After making the decision, the next step is to figure out whether to bring in outside transformation experts or navigate the process internally. Regardless of how you tackle this challenge, know this: If it isn’t already happening in your company, someone else is potentially building a game-changing, disruptive solution in your industry -- and there’s a good chance you don’t even know who they are.
