By now most businesses and organizations recognize the need to implement Digital Transformation as a way to enhance, grow, and stay relevant in today’s marketplace. They have begun to feel the pressures of consumer’s buying behaviours changing, and realize to maintain market share they need to change as well.
It goes without saying since a study by Gartner says 67% of companies implement Digital Transformation to grow revenues. Furthermore, a McKinsey study indicates Digital Transformation delivers 6-12% higher returns for shareholders.
Therefore, with the evidence and the facts to validate and cement the case of the need for Digital Transformation that is a debate we no longer need to have.
However, it’s one thing to see the signs of changing consumer behavior and technological advancements, but how do you really know if it’s time for your company to implement a Digital Transformation plan as a part of its growth strategy.
We have six (6) questions we typically ask our clients that you can use to evaluate your own business to see if it’s time to create your own plan.
6 Questions to Evaluate the Need for Digital Transformation
Question 1: Are you losing money due to inefficiency?
This is usually the easiest to identify as every CEO and business owner pays attention to how much money the company is making or losing. What may pose a challenge is identifying if this loss in revenue is due to inefficiencies within the company.
If you are losing money and you are unsure if it is due to inefficiencies, the best way is to test individual processes within your business. Select a process in your business, be it fulfilling a specific client need, your sales process, your supply chain process, etc. Next you want to test how long does it take a particular task(s) within that process to be completed.
Also, note what challenges arise that prevents each from being completed on time (and on budget), and are these delays due to a human element (staff member), or the process itself.
Question 2: Are you losing customers to more tech-savvy competitors
Have you recently heard a customer complaint that sounds like this, “…but at XYZ company I don’t have to come in to conduct business, so why do I need to come in here?”
If this sounds familiar to you then you’re potentially losing customers to your competitors who are beating you in the new digital era.
According to a study conducted by The Global Center for Digital Business Transformation (DBT Center), who surveyed 941 business leaders around the world in 12 industries, found that 4 out of the top 10 businesses in each industry will be displaced by digital disruption in the next five (5+) years.
What this means is companies that are unable to transform and advance through digital innovations will be displaced by their competitors who are more in-line with today’s tech-savvy consumers. Companies that can create less friction for their customers to do business with them are most likely to be around in the next 5 years.
Question 3: Are your systems operating in silo?
Here are a few questions to ask to see if you’re systems are operating in silo:
Can I log into a centralized network and access data for any department? (assuming you have access)
Are the systems in one department integrated with systems in another department allowing data to be passed seamlessly?
Does staff in one department readily have access to customer information created and stored by another department?
Do I find it difficult to share ideas and get things done with co-workers in other departments?
Think of systems operating in silo as several islands in the ocean 50 feet apart, but no one on either island can access the other island because there is no bridge that connects them.
Recently we met with a client that had been operating in silo, and mostly paper-based approaches to conducting business. The challenge they had was how their customer’s information was collected, processed, and stored.
If a customer needed to renew their insurance policy with the company, they had to come in wait on a customer service agent (CSA) for almost an hour, fill out a paper form, then that agent would enter the information in their system online.
It’s obvious how tedious this would already be for both the customer and CSA. But that’s not the worst part.
If someone from Claims needed to access said customer’s information, they would need to walk to the CSA department to obtain that information physically, and vice-versa.
Silos make readily accessing data and getting things done across an organization unnecessarily tedious and tiresome.
Question 4: Is your business mostly operating manually?
When we say operating manually what we mean is does your business rely on tasks being executed or actioned by a person rather than through an automated process.
Through several client interactions over the years we have found that companies tend to implement Digital Transformation within their business mostly due to realizing the need to transition from manual, legacy based ways of working, to a more automated and digitized approach.
An example of this would be processing customer information through paper-based methods being tedious and time-consuming. Another could be unnecessary delays and holdups due to resources not effectively being utilized.
If your daily operations tend to rely more on your staff’s physical presence, rather than a digitized and automated process that makes executing their tasks easier and almost effortless, then it may be time to consider Digital Transformation as a strategy.
Question 5: Are you limited in market development by geographical location
Market Development refers to being able to increase revenues by selling current products and services within a new market to new customers.
The reason why Amazon was able to generate 177.9 billion USD in revenue in 2017, and almost every other brick-n-mortar retail store is going out of business, is due to the fact Amazon isn’t limited to any specific physical location. They exist anywhere and everywhere in the world without the need for physical stores across the world.
E-commerce has disrupted several industries beyond retail since 1998. According to a PwC report 20% of CEO’s had said e-commerce has completely disrupted their industry, along with a further 59% saying that it has had a significant impact on their industry. That’s 79% of CEO’s believing that e-commerce has negatively affected their industry.
Question 6: Does your current systems collect and analyze customer data
A key part of implementing Digital Transformation is the collecting and mining of data for the purpose of businesses developing more strategic growth plans rather than relying on guess-work.
In today’s very digitally-focused business environment, understanding what your customer’s buying behaviours are in relation to their buyer’s journey is key to faster sales conversions, reduced customer acquisition costs, as well as increased customer retention.
All three factors lead to one thing: predictably increasing revenues over a 12-36 month period. Businesses who ignore this will very quickly be faced with losing customers to more customer-focused competitors.
If you are currently operating without any way of capturing customer data, whether online or offline, at every customer touch-point or engagement, you are missing out on key insights. This is a good indication that you should be considering implementing a Digital Transformation plan, even at a very basic level to collect customer data using tools such as Ingenuity Forms.
For Digital Transformation to work it often involves rethinking the scope of the company's activities as well as redefining people's roles and responsibilities. Furthermore, it requires something far more important that most companies never consider, a change in culture and a change in mindset.
If you are a business owner or head a department and are still operating in a manual analog world, then you should seriously consider Digital Transformation as the next important growth strategy for your business.
Companies who tend to wait to catch up once the world has moved ahead of them almost always tend to go out of business.
Take the time to assess your business so you won't make the same mistake many businesses have before of thinking they can survive with a "This is how we've always done things and it worked" mindset.
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