It’s that time of the year again. As we approach the month of June, Forrester brings its annual flagship India event Digital Transformation Mumbai 2016 to the country’s most senior business leaders.
As Indian businesses become increasingly familiar with the importance of digital to their success, they often ask “Where do we start, and how can we navigate the choppy waters of transformation?” We are now in the age of the customer, and its singular focus on customers is what will make or break any digital transformation. Our seminal research on digital maturity, customer experience, and business technology has helped our customers across the globe become successful in their digital initiatives. This event is about providing you a first-hand glimpse of our latest research.
Our main goal for this event is to help you understand where to start on your digital transformation journey. We will bring to you the theme of the customer-obsessed operating model, which provides a blueprint for your digital transformation. We have carefully curated a team of Forrester and industry experts to talk about how the four dimensions of this operating model help organizations in their digital transformation.
We will highlight the imperative for organizations to:
Become customer-led than simply being aware of customer needs.
Be able to drive actions from insights than simply being data-rich.
Be fast — because being perfect but slow doesn’t cut it anymore.
Get rid of internal siloes and derive power from being connected.
The pace of business – heck, the pace of life, gets faster and faster. Faster processing, faster delivery, faster innovation – and faster adoption and abandonment of that innovation -- is the reality we all live in today.
Leaders run fast businesses to win and to stay apace or in front of dynamic customers and disruptive competitive forces. They can’t out-slow the competition. Speed is the only option.
I had the pleasure of participating in a webinar panel to discuss what it means to work at one speed (fast) versus at two speeds as bimodal IT advocates. We discussed why businesses are forced to go fast, the reality and downside of a bimodal IT strategy, and the strategies and approaches to winning based on speed. Here is a quick view of the ground we covered.
The first part of our discussion focused on the factors that are making companies operate at fast speeds. Broadly, it comes down to three factors:
Hyper-adoption and hyper-abandonment: Customers are willing to rapidly try, use, and then possibly discard content, apps, and services in a world of seemingly infinite choices and extremely low cost to entry and exit. This dynamic fundamentally changes – speeds up – what it means to “have” a customer.
Faced with increasingly empowered customers, together with mounting pressure from existing and potential digital disruptors in the financial services sector (such as Alipay in China and Codapay in Southeast Asia), many banks across Asia Pacific have launched mobile banking apps to enable customers to make mobile transactions. Initally, these mobile banking apps suffered from abysmally low customer adoption and delivered poor customer experience. However, mobile banking apps have come a long way over the past five years, going from little more than an extension of online banking to what one digital banking executive calls “the most important part of my job.”
Through conversations with our FSI clients, we have observed a positive transformation in how eBusiness executives think about and execute on their mobile strategy, which contributed to rising adoption levels and better customer experience. The most notable shift that eBusiness executives have made is to perceive mobile as a crucial part of their organization’s broader business transformation imperative linked to specific business objectives and outcomes — this is fundamentally different from the early days when some eBusiness executives equated a mobile app to a mobile strategy.
Our exclusive FSI summit in Singapore on Friday, April 15 will bring together an intimate group of senior executives from banks, insurance companies, and selected fintech firms. At the event, my colleagues and I will share Forrester’s FSI digital business research, and facilitate discussions with industry leaders.
My presentation, “Who Does Mobile Banking Well In Asia Pacific?”, will explore:
Businesses must focus on those activities that they can transform into digital business models. Not every industrial activity can become a digital business, but it will be impossible to succeed in digital transformation by developing a digital business and an industrial business and then operating them side by side indefinitely. GE sold 40% of its business activities because it felt that it could not transform them into digital businesses. For those industrial activities that can become digital businesses, executives need to be aware that:
Every industrial worker has to develop digital DNA. Industrial workers and mechanical engineers have to be comfortable interacting with digital systems. At GE, mechanical engineers have to design a locomotive in such a way that they can place a local data center inside it. Every industrial worker will have to have analytics skills, whether that’s the ability to create sensible and reliable data sets or to analyze and interpret these data sets.
From discussions with our clients in the financial services industry (FSI) in Asia Pacific, we’ve noticed that their digital agenda has changed dramatically over the past 18 months, shifting from a consideration of acquisitions and distribution channels to a broader business transformation imperative.
In fact, leaders at banks and insurance firms are increasingly realizing that:
Customer experience is fast becoming the only competitive differentiator.
Banks and insurance have to accelerate their ability to innovate and deliver new sources of value to customers faster.
CEOs and their leadership teams are at a crossroads as technology underpins virtually all customers’ expectations and unlocks new sources of customer value. The choice is rather straightforward: invest heavily in business technology (BT) to win, serve, and retain customers, or flounder under the weight of legacy IT.
This is no time to hedge. Strategies like bimodal IT that advocate for silos and two operating speeds may appeal to risk-averse leaders, but bimodal won’t get the job done. In fact, it works directly against the key operating principles of customer-obsessed firms in B2B and B2C industries like General Electric, Netflix, and USAA. These firms and other leaders use the customer as the central design point for their business technology strategy and strive to be:
“The industrial companies that can bring together cloud, open source, and real-time process management with industrial product cycles will be the ones that will win in the digital transformation process.”
William Ruh, CEO for GE Digital
At Mobile World Congress 2016, GE outlined some fundamental insights about the digital transformation efforts of industrial businesses. William Ruh, CEO for GE Digital, a US$6 billion business of General Electric, shared valuable insights about the digital transformation process that industrial businesses need to tackle.
Digital Transformation Is Happening And Offers New Opportunities
Companies that fail to embrace digitization won’t be able to compete in the next decade. William Ruh stressed that while the past decade was primarily about the consumer Internet, the next decade will be about the industrial Internet. Digitization offers one of the biggest opportunities in many decades to companies that are willing to change:
Your customers' digital experiences with other suppliers already shape their perceptions of value. Today, your customer assess the value of your services based in part on your ability to integrate into their digital world. The future belongs to companies able to harness digital to create new sources of customer value - these companies are destined to become digital predators, swallowing up lesser digital prey.
As a business leader, do you get the feeling that you're no longer playing the same game that you once were? It's not you; the world has changed. The things that used to set companies apart — such as economies of scale, distribution strength, and brand — are far less potent than they used to be. Why? Because digital technology has fundamentally changed two things: the dynamics of the markets in which you operate and the speed needed to remain competitive.
The latest report in our series on digital business – Unleash Your Digital Predator – updates our thinking on digital transformation and includes analysis of data from our latest executive research study on digital, conducted in partnership with executive search firm Odgers Berndtson.
Many firms proudly point to their mobile app and proclaim "Hey, we're digital!" While they may be driving incremental revenue, all they have done is bolt another digital touchpoint onto the existing business. Digital transformation goes much further, fundamentally reshaping the way you create value for your customers and drive revenue growth. Achieving this requires that firms approach digital business from the outside in, pursuing two dimensions of digital in parallel: digital customer experience(DCX) and digital operational excellence (DOX).
It turns out executives are hugely optimistic about how digital will change their business. Forty-six percent of executives surveyed believe that in less than five years digital will have an impact on more than half their sales. This suggests not only huge awareness of the potential for digital to change today's business but also an expectation that their company will be successful in making the transformation needed to bring this expectation to fruition. And it's in the biggest companies, where change is hardest, that executives expect the greatest change.
In B2B industries like consumer packaged goods (CPG), wholesale sales, and professional services, the shift is expected to be dramatic — Forrester estimates that the US B2B eCommerce market will be $1.13 trillion by 2020.
CPG execs expect digital to have an impact on almost half their sales. Even though the percentage predicted by 2020 is still less than 50%, if CPG companies were to generate anything close to 45% of their sales through digitally enhanced products and services or through online sales by 2020, it signals a dramatic shift in the CPG landscape. The ripple effects of the digitization of more and more CPG will be felt through wholesale and retail channels.
We’ve been telling you that you need to transition from strictly managing an IT Agenda to owning a BT Agenda, too. 2016 is the year that needs to happen: your CEO will be looking for you to drive digital in your company — and increasingly digital is becoming your business.
Winners in the age of the customer will embed digital into all parts of the business, harmonize virtual and in-store experiences, and be able to rapidly shift to meet the hyperadoption/hyperabandonment behavior of customers.
The scary news? Only a quarter of businesses have a coherent digital strategy to create customer value as a digital business. The onus is on you to deliver that strategy. As CIO, you need to offer a holistic view on the digital transformation that encompasses not just how your firm can harness emerging technology to create customer value, but how your team can help drive synergies across the customer experience ecosystem. We believe the only way to achieve this is a customer-obsessed operating model that will permeate throughout your business and focus on six elements: structure, talent, culture, metrics, processes, and technology.
Here are three things you can do in 2016 to win at driving digital: