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Digitalize your business … or die!

Digitize your business or die

Since their creation, companies born in the digital age incorporated the benefits of technology in their processes. For example, Amazon expanded its processes from online ordering to procurement. Netflix revolutionized the DVD rental market, making it easy to order movies online and eliminating the hassle of going to the video store. These digital-born companies have successfully leveraged technology to significantly improve the customer experience, compared with older businesses that haven’t become tech-savvy.

This is true for almost every industry sector. For example, take the banking industry. Everyone expects to consult their bank account online, but customers would like other services, such as online mortgage or loan applications without meeting a bank representative. Customers can get pre-authorized in just a couple of minutes through online automated credit checks, compared with the days it used to take to get approved for a loan.  For banks, it is a matter of shortening their processes and being innovative, but they are also doing this to better compete against the online banks that have developed in recent years.

Companies born before the digital age have to reinvent themselves to survive; otherwise companies that were digital from the start will take over their business.

To transform their business, companies that began prior to the digital age can “digitalize” their business by undertaking these three steps:

Step 1: Redefine your strategy

Companies can analyze the drivers of change affecting their roadmap, such as business and regulatory drivers, so they can define their vision and set their objectives. Then, to build the strategic roadmap, they can break down the main objectives into intermediary milestones, and plan the required business capabilities and KPIs for each milestone.

Step 2: Redesign processes

This step starts with first analyzing the buying experience or the customer journey, and identifying the moments where customer satisfaction is low or when a customer might exit the journey. By linking these moments to internal processes, one can easily redesign the future state of internal processes.

This will enable companies to fix some steps of the customer journey while ensuring a flawless customer experience. When redesigning processes, one should pay particular attention to reduce the number of steps, automate decision-making, and incorporate risks while complying with regulatory requirements.

Redesigning data models is also key to improve decision-making. Business leaders should be able to sketch data flows without a precise knowledge of data modelling, and relate information to other enterprise perspectives such as business processes. This can be done using conceptual data models that help model organization data flows independently of the way information is physically managed.

When redesigning business processes, it is worth noting that working in cross-functional teams is essential. Teams should include a mix of people from business and IT backgrounds.

Step 3: Implement the new processes

This step can fail if companies don’t put the right measures in place. Companies need to create a dedicated environment to build their digital initiatives, but company managers might be reluctant to change the way they currently work. For example, in the insurance sector, there might be a conflict of interest between walk-in agencies and online insurance purchases. Ideally, the proper action would be to start a new organization from scratch to implement the new processes. Once the new organization became the dominant one inside the company, staff from the initial organization could join the new one.

By digitalizing their business, companies can improve the customer experience. Most importantly, they can simplify the experience, which is what customers want. Remember how complicated it was years ago to book an airline ticket or purchase an insurance policy? Customers don’t want paperwork; they want a simple, paperless experience. But customer experience is only the tip of the iceberg. Beyond the customer experience, successful companies rely on strong processes that have been redesigned, simplified and optimized to incorporate the customer experience and integrate technology in the right way to create business profitability. Digitalizing processes is the main challenge for companies that began before the digital age. For them, it is a matter of survival.

Read our eBook co-authored with Aberdeen Group: A Winning Plan for Effective Business Transformation & Improved Customer Experience.