While the impact of digital is monumental, the path to digital success is not simple. To realize the full potential of digital, organizations must create a clear, holistic digital strategy that takes into account not just the short term priorities, but the long-term opportunities as well
From large multinational companies to local baniyas, every single entity is gearing up to enter ‘the digital age.’ Technologies like big data,analytics, social media, and mobile are fast emerging as the new tools of engagement and causing digital disruption across many industries. Digital,today, has become so synonymous with business that it is embedded in every function—be it hiring, sourcing, marketing or finance.
Digital has become so pervasive that organizations can no longer afford to ignore it. For example, 465 new companies moved out of the Forbes 2000 list between 2011 and 2013 and another 550 companies will move out the list between 2013 and 2015 because of disruption from the digital age.
Almost 50% of the companies in the Forbes 2000 list will experience churn from the list because of the impact of the digital era, believes Zinnov. Therefore, it has become essential for business leaders to integrate digital initiatives across sales, customer service, marketing and human resources, and supply chain departments.
DIGITAL LEADERS ENJOY SIGNIFICANT LEVERAGE
According to a research by Capgemini Consulting,more than 400 large mainstream companies around the globe who have a significant digital strategy enjoy a major advantage. It has been observed that these companies are 26% more profitable than their average industry competitors and enjoy a 12% higher market valuation. They also generate 9% more revenue with their existing physical capacity and drive more efficiency in their existing products and processes.
Agrees Anees Merchant, Senior Vice-President, Digital, Blueocean Market Intelligence, “The digital initiatives over the last two years have definitely helped us transform our brand objectives and have made a significant impact on our sales initiatives. Collectively across our sales team, there is a great interest to further drive the digital effort as we continue to drive top line impact. We are getting good inbound traction which is a result of our continued focus on digital efforts.”
Companies at the forefront of using digital tools also have a significant advantage over their competitors. As per McKinsey, the companies with greater digital capabilities were able to
convert sales at a rate 2.5 times greater than companies at the lower level did. These figures clearly show that being digitally ahead adds more advantage than being a laggard digitally.
The Journey to the Digital Enterprise
To be digitally relevant, organizations have to seamlessly integrate three important aspects: People, process, and technology. Depending on the maturity of the organization and the business need, organizations can choose the relevant technology platform.
One has to also understand that digitization is much beyond SMAC. ‘’The truly digital enterprise needs to focus on other aspects also like search marketing and optimization, real-time marketing, multi-channel delivery, big data, digital media and marketing, content management system, email marketing, digital strategy, responsive user interface design, e-business, videos, content marketing etc,” asserts Ajay Chhabra, Founder & Chief Digital Officer, A3R Digital.
For their digital growth, organizations are more prone towards investing in customer-facing solutions.The core is to build a strong foundation for back office function that can help drive operational efficiencies. It is important to understand the need to minimize cost of operations, keeping the organization’s business objective intact in addition to finding new revenue streams.
“It is important to understand that digital does not function in isolation but needs to be used in a manner that it penetrates different levels and areas of a business, making execution and delivery simpler. We have, therefore, adopted a horizontal approach for digital initiatives, which connects across our businesses. To sum it up, our focus is to resolve issues, deliver innovative and hassle-free solutions, and achieve more using the digital medium,” says Deepak Sharma, Executive Vice President – Digital Initiatives, Kotak Mahindra Bank.
Business leaders should hence groom their team members with appropriate skills required to cope up with changing technologies. They should be aware of what their competitor is doing, what technologies are being used actively in the marketplace, and what is the best way to reach their target audience.
Accordingly, technologies and related content has to be customized according to the industry. “The perceived notion about insurance sector being ‘boring’ and ‘dry’ is to be tactfully changed amongst the potential online consumer base. The content has to be made more fresh, interesting, and relative to the consumer with a mix of insurance as a lateral subject. The messaging cannot always be about insurance or technical in nature or else we run the risk of boring the customers.
The challenge is to maintain a fine balance between being interesting and being technical so as to generate interest in insurance and the necessity to invest in the same,” says a spokesperson from Star Health Insurance.
Data analytics has brought with it a larger area of analysis to streamline business decisions. “The tangibility spectrum that a digital medium provides goes beyond analytics and allows for direct actionable insights. When a trailer or a song or any other audio-video asset is released, the number of views and comments on the asset for instance serves as a direct benchmark to gauge popularity, reactions,and reception of the content served. This sort of rich data helps us not only in tweaking our strategies and marketing approaches but also steers us in taking important business decisions,” states Anand Gurnani, Vice President- Digital, Yash Raj Films.
In other words, digitization has become a vital part of every organization irrespective of its size.Organizations that have always enjoyed success using a physical presence must replicate the same experience online. According to McKinsey, customers expect the same friction-less experience in a retail store as they do when shopping online, and vice versa. Moreover, they are less accepting of bad experiences; one survey found that 89% of consumers began doing business with a competitor following a poor customer experience.
On the flip side, 86% said they were willing to pay more for a better customer experience. To succeed, organizations need to prioritize the core reasons to take the digital transformation journey and therefore should identify their real business issues. For example, an organization may have the need to focus more on a sales function over operational issues. It may also be the combination of multiple such factors.
So the key is to prioritize. Last but not least, it is extremely important to ensure that the end customer gets a much better experience in the overall transformation. Hence, all set of functions need to work together to achieve the same.
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