May 11, 2016 | Written by: Mark Dudgeon
Categorized: Thought Leadership
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The new digital landscape has arrived and organizations will either flourish or wither away in this new battleground. Digital reinvention means you need to reimagine business models and be proactive before new competitors enter the market.
What is Digital Reinvention
So what do we mean by digital reinvention? It means different things to different people:
• New technology
• A new way of engaging with customers
• A new way of doing business and defining new business models
We have a diverse range of perspectives from across and within organizations that ultimately leads to a lack of alignment and common vision about where the business needs to go. This often results in piecemeal initiatives or misguided efforts that lead to missed opportunities, false starts and regret costs.
CEOs know they can’t ignore this digital reinvention, and are asking three critical questions:
– Is my strategy ambitious enough?
– Is my execution fast enough?
– How do I transform my people and their capabilities?
Technology is a key enabler of digital reinvention
While digital reinvention means different things to different people, all agree that technology is the foundation. Organizations no longer view technology as a means to an end, but as an enabler to address business outcomes and vision.
CEOs first put technology at the top of the list back in 2012, and that view hasn’t changed. However, for the first time ever, the rest of the C-Suite also now sees technology as the main game-changer.
Image 1: External forces impacting the enterprise (in 3 to 5 years).
Source: 2016 IBM C-Suite Study
While each individual technology advance is expected to deliver significant benefits on its own, it is not the individual technologies that make the difference. It is the confluence of these different technologies that holds the greatest promise and delivers the biggest value across all industries.
Forward-thinking companies have always pushed the boundaries of technology, insights and design to reimagine the experiences they want customers to have. Today, we are crossing a new threshold as businesses from all types of industries adopt a host of digital technologies that are reinventing how they interact with customers across physical and digital environments. This is leading to innovative, often disruptive experiences that can quickly supplant incumbents and shift the competitive landscape.
Key insights from the IBM C-Suite Study include:
• While CxOs overwhelmingly agree on the importance of technology, they’re more uncertain about its impact.
• CxOs welcome the chance to develop better goods and services.
• CxOs are desperately trying to cope with a “technological onslaught.”
Ultimately, customer value needs to be centric and key. At the heart of this journey are three trends that are reshaping the customer experience:
Implementing an outcome-based approach.
Requires a deep change in the business model, new organizational capabilities and new business process capabilities.
Providing a differentiated customer journey and experience
Customers want to choose their own journey across multiple channels at their convenience. The pattern that emerges is not linear, as in the past. While 96% of unhappy customers don’t complain, 91% of those will simply leave and never come back. Digital isn’t about just working to deliver a one-off customer journey – it is about understanding and evolving based on inputs from the customer and fostering ongoing product or service loyalty.
Using Big Data and marketing in near real time
Allows organizations to sense and respond to customer needs in real time, predicting the next best step for engaging with them based on informed insight and use of cognitive enablement.
This requires making real-time decisions, based on intelligence, that deliver content and experiences that are personalized and relevant to the customer. Remembering customer preferences is a basic example of this capability, but it also extends to personalizing and optimizing the next step in the customer’s journey.
With opportunities come threats from unforeseen competitors. Organizations across multiple industries are feeling the heat from disruptors who are using digital to revolutionize how customers interact with brands. Armed with these new experiences, customers are becoming increasingly impatient with incumbents who don’t keep up. Helping customers easily find what they need, simplifying signup, driving personalization and streamlining access to support is now critical to retain customers.
This competition isn’t just coming from new permutations of old industries, though; it’s also coming from digital invaders with completely different business models. These organizations typically target a key part of the value chain, bypass the incumbents and seize control of the customer relationship, making other suppliers irrelevant.
Industry convergence redraws the rules of engagement and different tactics are required to thrive in the new competitive environment. Studies show that early adopters are winning, and they do this by embracing the digital world and executing on their digital strategy.
• The coming together of consumer electronics and healthcare with digital exercise tracker Fitbit
• The world’s largest taxi company, Uber, owns no vehicles
• The world’s most world’s most popular media company, Facebook, creates no content
• The world’s biggest retailer, AliBaba, has no inventory
• The world’s largest video conference company, Skype, has no telco infrastructure
• And the largest growing accommodation provider, AirBnB, owns no real estate.
Customers expect a frictionless experience where commerce is seamless, experiences are personalized across all channels and technology is invisible. This is accomplished through digital reinvention and the clock is ticking for an organization to begin its journey to fend off these digital invaders.
*Source: The Battle Is For the Customer Interface, Tom Goodwin, Havas Media, March 2015
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