The application economy is enabling, driving and, in some cases, forcing businesses to undergo a digital transformation. But what exactly does that mean, and how will your business look following such a transformation?
John Lowe, managing partner at Momentum, a digital transformation consultancy, shares his take on the current trend, what challenges lie ahead and how businesses will benefit.
Justin Vaughan-Brown: How you would define “digital transformation”?
John Lowe: Digital transformation is enabling your business to delight your customers through digital channels, which can mean creating a digital eco-system that transforms how you do business and affect every task, activity and process within every department. It's about having connected customer experiences, line-of-business tools that empower your enterprise to make data-driven decision, an agile approach to delivering your digital services and marketing, and of course a culture of digital to drive cross-group collaboration and innovation.
JVB: Why do you think digital transformation has increased in momentum over the last 18 to 24 months?
JL: The pace of digital change is happening at an unprecedented rate, and it's getting faster and faster. Consumers are now more digitally savvy than ever before; society accepts digital as a central pillar of their daily life. The technology barriers to entry that have stood for decades have melted away, with cloud-computing putting super computing power in the hands of everyone at a commodity cost. Traditional business models have been turned upside down or simply now cease to exist. Put this all together and it becomes paramount and imperative that businesses give their customers the digital services they need and ultimately expect. If they don't, they will simply become extinct.
“Operating across the organization is critical to ensure you change and transform across people, processes and technology in lockstep.”
— John Lowe, Managing Partner, Momentum
JVB: What are your recommended starting points when embarking on any digital transformation?
JL: First, I always begin any engagement by asking: "What Does Digital Success Look Like?" Every business is at a different stage of their digital journey. Second, I always ensure the key stakeholders represent the highest levels of their particular function, digital transformation success requires top-down leadership. Operating across the organization is critical to ensure you change and transform across people, processes and technology in lockstep. For example, what use is a compelling, innovate, self-service mobile app if it takes an army of people to maintain it?
JVB: Which industries are particularly succeeding with digital transformation and why?
JL: The industries that are traditionally customer-facing are succeeding as digital, simply as an extension of their business. In particular, retail companies have had to continually improve their digital capabilities to drive customer loyalty and revenues and drive down operational costs. The retail banking sector is also performing particularly well as customers now expect to be able to service their accounts and apply for new services online without the unnecessary paperwork and lead-time associated with traditional means. I'm also impressed with the digital transformation of government, such as the U.K. and U.S., moving paper-based services to digital channels, ultimately delivering greater value to taxpayers.
JVB: What has been the impact of social media for companies as they aim to be “digital businesses”?
JL: Social media provides companies with real-time insights. Billions of conversations have been had through social media, a treasure trove of information that not only gives insights to customers but competitor activities and marketplace trends. Social media has introduced a non-linear relationship between company and customer: they can switch from researching a brand to advocating a brand instantly, and it is possibly the most powerful medium available to businesses today to accelerate their brand awareness and drive increased loyalty.
JVB: How has the position of Chief Digital Officer influenced the CEO agenda?
JL: The Chief Digital Officer (CDO) position has given digital a position on the board meeting agenda, it is no longer buried deep in the responsibilities of either IT or marketing department heads to ensure the company has a nice looking website. A well-defined CDO role that is filled by a digital and technology leader, with proven field experience of both IT and Marketing is crucial to success—they ensure the digital strategy meets the needs of the business and is executed in an effective way in partnership with the existing IT function.
JVB: Can you share an example of an organization you have worked with that has made a significant advance in mastering the digital environment?
JL: I assisted a global Fortune 50 corporation to make the step in to digital from an almost standing start. Their legacy approach was to allow digital marketing teams in local markets to create their own digital services in isolation to each other. They had the flexibility to meet their local market needs, but from a global viewpoint this led to various incompatible technology stacks, numerous islands of customer data, and no over-arching brand or IT governance. Within a few months they had introduced a global digital delivery division that enabled local markets to respond to local needs but in a more cost-effective and efficient way that also ensured brand consistency, lower total cost of ownership and acquiring a customer only once.
Digital Dialogues is a regular series of interviews conducted by Justin Vaughan-Brown with digital transformation thought leaders, consultants and innovators. Each interview addresses the challenges, opportunities and multiple dynamics at play as organizations evolve into truly digital businesses offering seamless customer experiences.