The emergence and adoption of digital technologies—including interactive marketing, analytics, mobility and the cloud—has rapidly transformed businesses, governments and industries across the globe. Mobile technologies have been especially impactful, as they have enabled companies to not only streamline their operations, but also engage more effectively with customers and tap into new sources of revenue.
Looking towards the digital world of 2018, businesses can no longer limit their thinking to that of evolution of business and technology, but instead embrace a revolution in thinking. The interplay of global megatrends and emerging technologies means that businesses need to do things differently, not just better, if they are to survive.
Companies take different paths to digital maturity for example Nike who started developing digital intensity in silos. Further it added elements of transformation management intensity to link the silos and launch new capabilities. Indian paint manufacturer Asian Paints went the other way, creating vision, governance and IT capabilities to become a more unified company. Then it repeatedly built on its capabilities to transform its customer engagement, internal operations and business models. Both firms are reaping huge benefits.
Digital transformation across industries
If we compare within industries digital transformation is moving more rapidly in some industries than in others. As per McKinney report companies in the travel and music industries were hit early by threats from digital competition, and have already undergone profound transformation, but still have more challenges to face. Industries such as financial services and retail underwent major transformation due to electronic commerce in the 2000s, and are now starting to innovate with technologies such as social media, mobility and analytics. Other industries, however, have yet to be hit hard by fast-changing technologies.
Digital offerings provide convenience to customers while serving as lower-cost channels for the banks. Insurance and utilities are in the Conservative space. Some insurers are focused on innovating with new technologies, but many are being held back by regulatory concerns or difficult organizational legacies. Similarly, utilities may be hindered by legacies of culture or regulatory environment that force a focus on cost reduction rather than broader innovation. Forrester research shows a correlation between customer experience excellence and revenue gains tied to customer loyalty—be it through repeat purchases, lower switching rates or increased word of mouth. The research revealed potential loyalty-related revenue boosts of $3 billion for wireless service providers, $2 billion for airlines and $1 billion for hotels as stand-outs among the industries analyzed.
Companies are engaging in analytics at varying levels of intensity. Some are just beginning to make better use of the data available from transactional systems. They are making more-informed and better decisions and reacting more quickly to changes in their operations. Companies with integrated data are able to engage in more powerful analytics strategies.
An Insurance company is able to do predictive sales, helping salespeople to target products that a specific type of customer is likely to buy. A hospitality company and a restaurant firm are using analytics to target promotions and conduct pricing experiments. A media company is using web analytics to provide real-time KPIs to customers in order to demonstrate the added-value of the firm’s products. Several insurance firms are using analytics to underwrite policies, enabling better pricing and reshaping the firms’ risk portfolios. However, all executives also mentioned that building analytics capability was difficult, requiring skills and culture change in addition to investments in information technology.
The pace of technological change is accelerating, and executives in every industry are paying attention. They face a vast set of alternatives for gaining digital advantage.
Make the investment in the appropriate digital marketing platforms to start building the foundation for long-term success. It is guaranteed to yield greater efficiency and higher returns.