Centres of excellence and shared service teams are nothing new. Its a concept that Technology Management teams have been wrestling with for years, if not decades in an effort to streamline underlying technical architecture and simplify application landscapes. In the digital world, its a less well established approach, but one that is gaining momentum as an emerging set of best practices forms around how to organize and manage a global digital strategy.
Pete Blackshaw has led the charge over the last couple of years at Nestle, establishing a widely publicised Digital Acceleration Team. The team focuses on “listening, engaging, inspiring and transforming” across Nestle’s disparate and diverse markets and brands. Its not just an operational centre of excellence, it walks a fine line between dictating to local teams and being a paper tiger with no real influence. And it does so very effectively.
But why “acceleration team” and not “centre of excellence”.
I believe that the language is important. For a local team, the idea that a global “centre of excellence” is going to roll up and tell them what to do can be a very negative experience. Do the global team understand the nuances of my market? Will migrating our lean, agile eCommerce platform onto the behemoth enterprise platform slow us down?
“Acceleration” helps create a more positive and collaborative approach.
Depending on the viewpoint of your favorite economist, the recession may be over. But retail growth is far from buoyant in many markets. The UK retail sector shows healthy signs of recovery, while US consumers seem be less confident. There are numerable success stories; John Lewis passed the £1bn online revenue mark this year, while Macys is in its fifth year of double-digit online growth, in spite of a slightly shaky offline performance. But as an eBusiness leader, no matter what your local market conditions, I’m willing to bet one thing.
Your growth targets haven’t gone down.
For many years, growing online revenues has been a core strategy for most B2C firms, and many B2B firms are also riding the eCommerce wave. But as markets become crowded and competition becomes tighter, globalization is an increasingly attractive option for eBusiness professionals. With southern European markets seeing online growth rates in the high teens and even bigger opportunities like Russia and China on the global horizon, it’s no surprise that an international strategy is high on the agenda for many eBusiness leaders.
I’m returning from three days at Forrester’s Technology Management Forum in London. The theme was “Unleash Your Digital Business”, and a very public event on the first day hammered home the timeliness and relevance of the story.
Parliament passed the “Ordinance for the Regulation of Hackney-Coachmen”in 1654. London at that time would have been unrecognizable to the modern city-dweller. Over a decade before the Great Fire destroyed swathes of the medieval city. Almost 200 years before Charles Dickens immortalized the orphans, beggars and thieves of the smog-shrouded slums of the industrial revolution. But in essence, the act of hailing a taxi remained unchanged since that day.
You stand on a street, wave at a driver and take your chances.
And Hailo, and a number of other clones, but Uber is the main bone of contention here. Uber represents the future. It empowers consumers to make a choice, placing power in their hands, and removing it from the service provider. It’s a poster-child for the Age of the Customer. And London’s taxi drivers aren’t happy about it. I will stop short of debating the politics or legislative aspects here – suffice to say that London’s taxi drivers are so unhappy that an estimated 12,000 of them took to the streets on Wednesday to protest. It was messy. And tragically misguided.
The following day, three interesting things happened.
It’s a very enlightening way of seeing digital disruption in action. When my wife and I bought our current house over a decade ago, we found it on a property website, but that’s where the digital engagement ended. We physically went to the estate agent to book a viewing. We were given a printed brochure about the house. Our mortgage application was done in person. We took photos of the house, printed them at the local Boots and stuck them in an album. When we moved we had to call our friends and tell them we’d moved.
I’m writing this on the train. On my iPad. Connected to the internet (albeit intermittently, thanks to the occasional tunnel) while trundling through the British countryside. I booked my ticket online with Expedia. I used the Trainline app to check the most up to date timetable info just before I left the office. Digital is enhancing my journey. Making it easier.
Every single one of my fellow travelers, with the exception of the sleeping Hipster opposite me, has immersed themselves in their own digital worlds. They tap the screens of smartphones. They watch movies on their tablets. They type meeting notes on their laptops.
The world has gone digital.
But that’s not a surprise, right? Digital is a boardroom topic these days. C-level executives who barely had the faintest notion of what “digital” was a few years ago are waking up the threat that digital disruption poses to their business. Spurred on by apocryphal tales of iconic brands who flushed their futures down the digital toilet, they are facing the reality that their businesses need to take digital seriously.
But here’s the kicker. While senior executives in many firms may now understand the importance of digital for their firm’s survival, few know what to do about it.
At Forrester, we recently ran one of our largest ever global executive surveys in partnership with Russell Reynolds. We asked firms about their digital strategies. Here’s what we found:
Seventy three percent of firms that think they have a digital strategy. If this sounds high, that’s because many of these firms are mistaking the fact that they have a website, or a mobile app, as having a digital strategy.
In the age of the customer, firms that assume that what made them successful in the past will continue to drive competitive advantage in the future are doomed to failure. But as a counterpoint, those firms that embrace the opportunity digital technologies bring to get closer to their customers by creating contextually relevant, personalized customer experiences will thrive. That’s the theory, but what does it look like in practice?
This week, two major UK grocery firms paint opposite ends of the digital spectrum.
Globally, executives acknowledge the disruptive influence that digital technologies have on their businesses. In fact, in a recent Forrester survey fielded in conjunction with Russell Reynolds, 41% of business and IT executives believed that their industry had already been moderately or massively disrupted and over half expected to see more disruption over the next 12 months.
You don’t have to look far to find evidence to back this belief up. In fact, you don’t even have to look globally — digital disruption is happening right in your back yard. Just take the UK as an example:
The UK government is transforming its public services to deliver “digital services so good that people prefer to use them.”
Retailer John Lewis is offering a £50,000 cash investment to the winner of its tech incubator “JLab.”
British Airways is driving for operational excellence in baggage handling by RFID tagging luggage.
Movie streaming service Blinkbox, owned by retailer Tesco, is expanding into music.
PruHealth is partnering with wearable technology firm Fitbug to offer rewards for active health insurance customers.
The fact that the world is becoming digital is no longer really newsworthy. It’s a boardroom topic for most firms. As it should be. You only have to open your eyes to see the impact that digital touchpoints have on business. As I sit here writing this blog, I am in the departure lounge of Brussels Airport en route to Stockholm for the last leg of a presentation roadshow. I’m surrounded by travelers on smartphones, tablets, and a few laptops. Almost everyone (with the exception of a sole individual filling in a crossword) is using a digital device.
Firms are beginning to acknowledge this digital-first culture. We’ve been presenting to audiences in cities all around Europe, talking about Transforming Into A Digital Business In The Face Of Disruption. The overwhelming feedback from these presentations has been that firms are beginning to realize that digital is critical to their future success (and in some cases, their very survival). This spans B2C and B2B. But in many cases, the executives we speak to say their firms don’t have a digital strategy, and even if they do, they doubt their capability to deliver it.
It’s clear — companies need help to make sense of what digital means to them.
It’s only crumbling, archaic companies that have to worry about digital disruption, right? Companies that cling to out-moded ways of operating, where out-of-touch, besuited executives languish in mahogany-paneled boardrooms pondering strategy over cigars and brandy.
Oh no. Digital disruption impacts every business and every company.
No matter how “born digital” you may think your firm is, there’s always room to get leaner, meaner and closer to your customers. Take this as an example.
You might think that Satya Nadella, recently appointed Chief Exec of software powerhouse Microsoft, has nothing to worry about. While Microsoft wasn’t strictly “born digital”, it isn’t far off. It boasts an impressive array of digital services in its suite of products – Hotmail, Xbox Live and MSN to name just a few. But Nadella is only too aware that what’s made Microsoft successful in the past will not continue to differentiate it in this uncertain future.
In a recent New York Times interview Nadella was asked about how he wanted to change the culture of Microsoft. He succinctly sums up exactly why every firm must become a digital business:
It's hardly a secret that consumers are rapidly adopting new touchpoints to help them shop.
But the killer question that every eBusiness executive must be able to answer is, how quickly are consumers adopting any given touchpoint and how influential are they in the overall shopping experience?
Touchpoint adoption varies significantly around the globe. For consumers, cost, availability, trust in new technology and convenience are primary drivers of how quickly they embrace new technologies into the shopping journey. But adoption isn't all about consumers. Retailer enablement is also a key factor in the adoption curve. If retailers provide touchpoint optimized, rich, convenient experiences that exploit the best features of each new touchpoint while still supporting the overall brand experience, they are more likely to drive consumer adoption.
There are some great examples around the world for firms embracing new technology to make the shopping experience as simple, easy and friction-free as possible for their shoppers, no matter which touchpoint they chose to use. For instance:
Blue Tomato gives shoppers freedom of choice. German action sports retailer Blue Tomato leverages responsive design to give multi-touchpoint shoppers freedom to pick whatever device they want. The upside - a seamless and consistent customer experience coupled with a lower cost of ownership for a single code base. The downside - more complex code and more testing when they make changes.