Digital transformation is not a technology issue..
Digital customers and the connected world
We live in exciting times! As a lot of things are changing and changing dramatically! We live in a digital context which we as a consumer, company and society can no longer avoid. New technologies such as mobile, social cloud computing, sensors, virtual reality and 3D-printing are being introduced at an ever increasing rate and are unleashing a real revolution in our way of living and working. This digital context puts traditional organizations under pressure, results in new organizational forms (e.g. the Uber-type models such as AirBnB, Netflix, Spotify, Alibaba, etc.) and in this way forms a new society.
In this new society or connected world customers increasingly expect consistent personalized experiences through every service and communication channel. Organizations cannot afford to be left behind and must become mathematical champions that by the use of analytics (or to use a buzz word, big data) build clever algorithms to provide better or completely new customer experiences. This transition is not only vital to remain successful in the digital era, but also necessary to fulfill the expectations of the youngest generation (younger than 17 years of age), the customers of tomorrow. The customers of tomorrow or “network natives” live mainly in a virtual and global world. They are masters in the use of social media, spend a lot of time on their tablet or pc and make maximum use of all the online channels available to them. They are growing up with concepts such as crowdfunding and crowd sharing. In short, they consume differently.
Digital transformation is not a technology issue, but is primarily about reformulating your organizational model customized to the (digital) customer and the customer of tomorrow!
Organizations that answer the digital challenges by (purely) purchasing more technology without taking a good look at their organizational model will gradually get left far behind. They run the risk of being disrupted by new organizational forms. Just take the example here of the Uber-type models that use clever algorithms to connect customers, partners, employees and even products. Their organizational model is based on simply dealing in information without dealing in assets.
Uber: the world’s biggest taxi company does not have any cars; Facebook: the world’s most popular media company does not create any content itself; Alibaba: the world’s largest retailer has no stock, and AirBnB has no property. These companies make clever use of technology, but are above all highly connective, communicative and creative in their relationships. They make very sophisticated apps to connect in time and place with their customers. Via online communication, online diaries, social listening, public datasets, APIs, etc., they create added value for any interested party.
And above all the success of these companies is based on their flat organizational structure with short decision lines and high degree of autonomy (or self-control). They cultivate a climate of entrepreneurship and innovation and attach a great deal of value to the person behind every employee. Digital transformation is not a technology issue! Technology is only a means to reformulate and strengthen your organizational model to give your customers what they want. Digital technology enables you to act as a network rather than a hierarchy, to process masses of data continuously, to use organizational resources cheaply and on a global scale, to deal with uncertainties more effectively (by improved forecasting), to respond more quickly and more flexibly, etc.
It is high time to take a look at your organizational model too! How do you put your customers central? How do you connect with your network on a continuous basis? How do you use clever algorithms to improve customer experience end-to-end and/or overhaul it thoroughly? What actions are you taking today that will make you more resilient? How do you stimulate and reward innovation and entrepreneurship?
Becoming a digital company equals becoming a connected company, a customer company. It’s a journey: you need to start as early as possible, and there is no finish line. After all, when it comes to technology, the only constant is change.
Karl-Heinz Streibich, The Digital Enterprise