The big picture of digital transformation (an introduction)

One of the very first questions I typically ask executives who are newly committed to start “digitally transforming” their business is to actually define “digital transformation.” While definitions vary, what really strikes me is that almost always, they tend to have a gross underappreciation of what this transformation entails.

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Executives typically align around one or possibly two of the following, but they fail to grasp that it takes all of them eventually changing (albeit these can be managed in phases or as multiple tracks of work):

1. Customer insights and analytics: Any and all good decision making begins with understanding your customer. Most firms are sorely lacking in their investment and usage of all means and mechanisms to gather that understanding. There are web and mobile analytics looking at customer usage and behaviors around research, shopping and buying behavior, post-purchase services experience, customer interest and satisfaction surveys, focus groups, usability labs, social listening, search term analysis, and so much more. The fundamental question is: Have you transformed and readied your capacity to gather, synthesize and act on all your understanding of your customers benefiting from both traditional means and the many new digital means?

2. Technology platform and capabilities: From your customer learnings, the next step is to identify, build and enable the right functional capabilities built upon a robust technology platform. To effectively conduct business, you need a digital commerce and content platform across all channels that is safe and secure, always on, fast and easy to use, and integrates various aspects of a customer or business experience (i.e., search, shopping, buying, payment email, workflow and pricing).

3. Experience: These capabilities need to be wrapped up in a relevant and engaging personalized experience across all channels. This experience needs to be easy to use, fast, interactive and consumerized. It’s important to recognize that customer expectations are becoming increasingly liquid, meaning they are set by your competitors, other businesses, organizations and institutions, and recognized game changers such as Amazon, Google, Uber and Facebook. Together with the digitization of everything, liquid expectations are driving a new breed of digital services that are self-learning and will wrap around individuals and their needs in real time wherever they are and whatever they are doing.

4. Demand generation: The next question is: Do you have the right people, programs and processes to drive traffic into your digital properties and convert that traffic ultimately into product and service sales? Whether demand originates offline or online, marketing, merchandising and campaign calendars should be aligned to maximize the possibility of getting prospective customers to your online stores and then leveraging relevant offers, pricing, assortment and availability to close the sale.

5. Organization, governance and people: While not necessarily “easy,” getting the technology right is still comparatively easier than the organizational change management. Changing a company’s culture, embracing digital as critical to longevity and growth, redefining policies and procedures, hiring the right talent, putting in place the right performance metrics and the governance to succeed both domestically and globally is the most difficult and takes the most time. Winners in the digital age know success hinges on people. Enterprises need to focus on enabling consumers and workers to accomplish more with digital technology.

I hope the above gives you a sense of the end-to-end scope one needs to undertake in a true and lasting digital transformation. My intent going forward is to tease out in greater detail each of these strategic categories and provide examples of successes and failures and, in particular, provide recommendations to help maximize your opportunity for success—the very first time. Stay tuned.