Aren’t All Businesses “Digital”?
Which businesses are being impacted by the rise of cloud, social, mobile and big data? "That's easy," writes Ian Gotts, "ALL OF THEM". This is the first of his new column series on driving operational excellence in digital age. Here's what it means for you.
I can hear you say “Not another column on Digital _________” (fill in the blank: Transformation / Disruption / Business / Trends / Age / Mosaic). But this is going to be different in two important ways:
- More focused on what it means to the line manager and process professional
- Practical, actionable ideas rather than theory and conjecture
Am I at risk?
So let’s first cover off which industries or areas of business are being impacted by the combined disruptive effect of cloud, social, mobile, big data? That is easy. ALL OF THEM.
It is hard to find any corporate function that is not changing dramatically to take advantage of these trends, or that has customers that are demanding a different and better experience. The obvious areas are where the ‘product’ is information that flowed physically and now it is digital; print, media, video, music.
Next are those where there is a service and a sharable asset. The most obvious are Uber and AirBnB but there is so much innovation around Uber-for-X and AirBnB-for-X. Some will fail, but many services will survive and thrive. Whatever the case, they will have still disrupted the status quo.
But, those industries that think they are immune because they have a physical product need to reinvent themselves. Here is a very stark example:
Philips: 125 year history. 108,000 employees across 60 countries and $25bn of revenue. The incandescent light bulb was invented in 1800’s and it is now being replaced by the LED which is brighter, requires less power, can have its own IP address and therefore controlled by computer…. and lasts 22 YEARS on average. The table below tells the whole story. So Philips is transforming itself to be a “digital company” using its IP, skills and very open-thinking.
Digitizing your business
There are some drivers when companies consider how to reinvent themselves before they become overtaken by a new entrant. As an analyst said, “Change is hard, but becoming irrelevant is worse”. Simply adopting the new digital tools inside the company is clearly not enough. There is an opportunity is to take a clean sheet and re-imagine your business.
First, let me set the scene and help give some definition to “digital business”:
Marc Andreesen summarized the current phenomenon with a simple phrase “Software is eating the world” which was published in a Wall Street Journal article as far back as 2011. In that article he argued that every business in every industry would feel the disrupting force of technology and that the new entrants to the market would have a lasting effect. This was more than a bubble or blip: “We believe that many of the prominent new Internet companies are building real, high-growth, high-margin, highly defensible businesses.”
Martin Gill, with the analyst firm Forrester commented, “Digital technologies empower customers like never before, transforming their relationship with brands and products. The speed with which consumers embrace these new touch points is only getting faster, blindsiding firms that struggle to adapt. To compete in the face of digital disruption, your firm must transform, and as an eBusiness leader, you must help shape how. You must enhance your digital customer experience while also driving agility and efficiency through digital operational excellence. This is a tough challenge. Few firms have made the transformation, and many will fall along the way.”
When designing a new “digital business”, here are some areas to consider:
- Look through the customer’s eyes so you design the customer experience that delights
- Understand the “moments of truth” touch points for the customer and how you can add value
- Design the complete friction-free end to end process, which includes the customer, your teams and 3rd party providers (partners, suppliers)
- Provide the apps that enable your customers to self-serve and your teams perform at their best, when and where they need them
- Build a culture and mechanisms for continuous improvement and make change a competence
- Measure what makes a difference so you can monitor and course correct in real time
Implications for Process Professionals
Celebrate. Your time has come. You are so lucky to be in the role when this digital revolution rolls through. The pace of change may feel scary and there is always a chance that your company does not survive. But you can be part of the vanguard that is driving and executing the new digital strategy. You are at the heart of building a whole new business - but with less risk than joining a start-up.
Why is Process so Important This Time?
There are several key differences with the new digital businesses that mean process excellence is a critical if the business is going to succeed:
- The Customer Experience needs to be designed so that it can be delivered consistently across a range of channels, through self service, employees and suppliers.
- There are now so many moving parts (multiple social media touch points, distributed teams, sub-contractors and suppliers, complex set of apps on different devices). These all need to be coordinated to deliver the customer experience.
- The margins are razor thin in most businesses so the operation must be Lean but also rely on a combination apps as much as people. You cannot just throw people at it to cover up poor process.
- Agility and change are now a prerequisite for a business to stay relevant so you need to be able to manage change in a controlled way.
Important AND Urgent
Whilst every business will need to reinvent itself, the priorities, drivers and approach will differ. So what will convince your executives that process is central to the new digital transformation effort: customer experience, operational efficiency or agility?