What does a digital transformation mean for your business?
Your business may have been born digital.
Perhaps you used to do personal training, decided to do some videos of your training routines and recipe ideas, got a following and now create fitness and nutrition content online and offline full time.
You don’t need to worry about a transformation. You’re already there.
But, what if you clean carpets?
In 2015 I needed some carpets cleaning. So, I picked up the yellow pages and rang the number of the company closest to me. It was a weekend – a Saturday.
A lady answered the phone and took a message. She said the owner would call back later.
Well, I wasn’t that keen on waiting. So, I did a search. Found a website for a carpet cleaner that listed all their services and prices.
I could have ordered online, but I thought I’d call them instead. Someone answered the phone. They asked if I had called because of the online discount. I’d missed that but of course I said yes. They gave me the discount and got the order.
The first guy never called me back. Or maybe he did and I missed the call.
Now, if you called him as part of a survey and asked him if he had a website, there’s a good chance he doesn’t. And, of the people who don’t have websites, nearly 80% think they’re not necessary – perhaps what this guy would have said.
The problem is… he doesn’t know. He doesn’t know he’s losing business because he doesn’t have that website. It’s happening – but it’s invisible to him – he’s simply not even in the running for many people who’ve ordered online straight away.
At the other end of the scale you have large businesses that still operate using legacy digital and paper systems. It’s possible they’re changing things, but it’s also possible that they’re too terrified of breaking stuff to make a difference.
So, if this whole transformation thing is something you’re vaguely aware is something you should be doing, how do you get started?
There are three areas where you can make a difference
The main thing to get clear is not technology. There are lots of offerings – and you might have a choice of free/open source software, cloud infrastructure, software as a service options and endless other combinations.
The first thing to get clear is what are the benefits to you. A digital technology must help you do any of these things to be in the running:
- Does it help you make more sales?
- Does it help you reduce operating costs?
- Does it help you give customers a better experience?
The business case for the first two is pretty simple. If you get more business than the cost of the technology, then you might consider it.
The last one is the hard one to quantify. Do your customers get a better experience if you give them a self-service portal or if you give them more individual attention?
Do the videos and pictures you put up make your company more human and approachable – more authentic – and so lead to a better experience than corporate blandness?
If anything comes to you that doesn’t clearly improve things in one of these three areas, then it’s not a priority. It’s a nice to have and you can think about it later.
How to think through your situation and come up with a strategy
Once you’re clear on the areas when you can make a difference, it’s time to ask yourself some more questions.
Once again – there are three to work through.
Let’s take sales, for example.
First you ask – why do you need to transform it?
Perhaps you’re an author and want to reach readers around the world but don’t have a publisher. If you’re going to try self-publishing, then understanding e-book platforms, personal branding and content creation is an absolute must.
If, on the other hand, you sell very specific business services to a possible market of a few thousand people, you’re not going to need a fancy CRM to manage that. A spreadsheet will probably work just fine.
Perhaps use Google docs so you can share information.
The second question is to ask, what if I do a particular thing.
Let’s look at costs this time.
What if you bought an expensive system to evaluate the impact of commodity prices on your business?
Such a system might cost you a few $100k. If your commodity spend isn’t in the hundreds of millions, it will be hard to justify the saving.
Perhaps you’re better off outsourcing that – having someone else buy the system and effectively rent the results from them.
The second question then leads to a decision on how to go ahead.
How do I implement this improvement?
The how is about getting the benefit – not about implementing a system. The system exists to provide you with a benefit.
So, let’s take the third focus area to look at this one – customer experience.
Quite often, companies think that they should install a self-service portal.
This does make the experience better in some industries – internet banking, for instance.
In other industries, it’s a pain in the rear. Customers might prefer to simply get the information they need by email rather than spending hours working with your painfully slow portal.
iCloud – for example – is my current example of a completely and utterly useless online portal.
And the how should also consider what happens when things go wrong.
If you go completely SAAS and the company folds, what happens? If it’s a crucial part of your business, perhaps you should consider open source so that you can keep going even if the developers fold up one day.
In summary… if you’re digitally native already, thank your lucky stars.
If you’re not, before you buy a system – you’ve got some important strategic thinking to work through.