The days of ordering from the catalogue of your favourite retail brand or booking a meeting with your local bank manager to discuss options for a new credit card are long gone.
With major banks closing more physical branches – Lloyds announced the closure of 60 branches in March – and hospitality businesses such as Prezzo, Itsu and Côte Brasserie moving away from accepting cash for good, we live in an age where everything is – or can be – done digitally. This shift will only get starker as time goes on.
25% of the UK’s spending already originates from Gen Z and Millennial consumers, and this figure is predicted to reach 39% by 2030 as these generations obtain more buying power. It’s therefore vital for organisations across every sector to adapt to meet the expectations of their new digital-native customers. But this can’t be an overnight shift. In their rush to digitally transform, businesses must ensure they’re looking at the process holistically, with their overarching strategic goals in mind. If they fail to do this, they risk causing more harm than good to their customer relationships.
The bottom line is that businesses shouldn’t begin or proceed along their digital transformation programme simply because it’s the new paradigm. Customers increasingly expect digital processes to come as standard, but they expect their digital experiences to be high quality too. According to a recent study, 53% of online shoppers expect an e-commerce website to load within three seconds or less, and a similar figure (52%) won’t wait more than six seconds before clicking away. There’s no point in investing in digital unless it’s done right.
So, where should businesses begin? While a core outcome of digital transformation is improving the customer experience, decision-makers also need to take a step back and assess the wider business benefits of their transformation programmes and what they are trying to achieve. If the investment doesn’t directly benefit the business – either by increasing efficiencies, or driving revenue growth, through better internal processes and customer experience – then organisations should be asking themselves if they are doing it for the right reasons and with the right level of thought. An ambitious but ill-thought-out digital transformation project can end up damaging the customer experience by overpromising and underdelivering, whilst diverting the business’ focus away from other areas that could bring real value.
Staying on track
Digital transformation should be near the top of every organisation’s agenda, both as a source of competitive advantage and customer engagement. But, to be successful it requires planning, commitment and all parts of the organisation to align. Digital transformation is only a bad idea when it’s siloed. Recent research from DCX found that while 89% of business leaders believe that collaboration across departments brings benefits to their companies and 81% think joined-up working is essential to business success, more than half (51%) still admit to working in silos.
Businesses, therefore, need to start practising what they preach when it comes to collaboration. When starting or evolving their digital transformation efforts, the programme’s goals need to be clearly communicated by sponsors, take different business units’ ambitions into account, and be effectively socialised throughout the company. Baking collaboration in from the start and ensuring all stakeholders are aligned in this way will accelerate the programme and lead to better results, for both the business and customers.
One piece of the puzzle
While there is no doubt that the digital elements of transformation should be prioritised – especially by those companies in laggard verticals – the need for wider business process change mustn’t be forgotten. Business leaders should assess whether new digital tools and platforms will affect other processes or impact their brand proposition. These decisions should all form part of the initial discussion.
As the expectation for unparalleled digital customer experiences grows, organisations must ensure they don’t succumb to the pressure and make the wrong choices by acting before thinking. Digital transformation can’t be ignored, but there are right and wrong ways to go about it. To set themselves up for the best chance of success businesses should prioritise to ensure every team is travelling in the same direction, towards the same overarching goal.
About the Author
Andy Farmer is Head of Strategy and Consulting at DCX. Andy is passionate about driving stronger connections between businesses and their customers through the application of digital experience. For the past 25 years he has been creating, enhancing and managing successful digital propositions for clients as diverse as Tesco, Boots, Odeon and Royal Mail. In his time at DCX, Andy has led the multi-territory, digital transformation programmes for GWR, Aviva Investors, Artemis and Janus Henderson. He heads up the Strategy and Consulting Practice of DCX.