Is this the secret to staying relevant in the digital world?
“Nobody knows the future. You can only work to create it.” - Jack Ma
While the world careens at breakneck pace further into the digital era, planners and tacticians need to take a deep breath and have the courage to say, ‘ balance’ .
Organizations need to do a routine reality check, before businesses go awry. Have they gotten too far ahead of the customer? Have they stepped on regulatory toes? Have they examined dark security issues waiting in the digital shadows? And, finally, are they losing focus of the core business in a bid to reshape their organization for the future?
It is difficult to imagine that anyone would need to - or indeed, want to - reign in digital transformation. The current fashion is to brush away anxiety and frown upon anyone placing roadblocks to digital products, applications, processes and records. This is especially true in industries such as telecommunications, media, entertainment, retail, financial services, travel and hospitality, healthcare and education where any delay in adopting digital appears to trigger an almost instantaneous decline in revenue and market share.
Admittedly, there are storied organizations that have been battered out of existence because they failed to digitalize quickly and adequately. But there are an equal number that have been affected because future-focused digital transformation is drawing attention away from the core of the business.
One example is that of Indian fashion-retailer Myntra, which belongs to the nation’s largest e-commerce firm Flipkart. In March 2015, Myntra, which has set an annualized gross sales target of $1 billion by March 2017 (currently, its annualized gross sales are $500-600 million), shut down its desktop website in an attempt to dominate the mobile e-commerce market. But the strategy failed. Barely a year after taking the decision, Myntra was forced to roll back and re-launch its desktop site. Clearly, Myntra had gotten ahead of its customers.
This is in stark contrast to the approach taken by Nickelodeon , the children’s television network, that launched a web-only series last year called “Welcome to the Wayne” for the new generation of audiences weaned on mobiles, tablets, laptops, computers and wearables. But the channel has been astute. It is creating more programming than ever before to serve all its channels in a bid to strike the right balance. While Nickelodeon recognizes that this generation is more connected, it hasn’t abandoned traditional television. Advertising and distribution revenues are still dependent on mainline cable television. And Nickelodeon executives have been careful not to ignore this fact. Their investments in traditional technologies remain just as important as those in digital.
What’s the lesson to be gained from these attempts at getting ahead with digital? If anything, they amplify the fact that organizations fail for primarily two reasons – either they do too much of the same thing or they do too much of the new thing. “Balance” is the key. Customer Experience is our guide.
In a 2015 study of telecom operators preparing for the digital future by The Economist Intelligence Unit (EIU) for Wipro , it became apparent that digital technologies were helping the telecom industry create new products and services (44%), in the substitution of declining core revenue streams with new ones (42%), leading to an increase in revenue (42%). But, correctly, the report also cautioned that digital transformation involved risk. “How to grow profitable revenue from network investment may not be immediately clear, and chief executives might have to weather a storm of lower margins until greater operational efficiencies from new technologies can be fully enjoyed (less efficient legacy systems can hardly be shut down immediately during the transformation phase),” said the report.
Digital is here to stay and it is going to be the lifeblood of business. It must be embraced with open arms. But the astute will know that balance continues to be important.
The banking industry presents a classic case of what others need to do. We see that bank customers fall into three categories – current clients who are equally divided between digital users and non-digital users; their children who are digital natives; and finally their parents who are non-digital. Clearly, different customer experiences suited to each category are important. Translated, this means emphasizing customer experience through the lens of both Digital as well as Current Core business.
Here, then, is why it doesn’t hurt to aim for balance. To begin with, the umbrella of digital covers a mix of very fast-moving technologies (for example, cognitive computing), some that are in their infancy (such as virtual reality) and others that continue to cast a pall of uncertainty (like blockchain). The second reason to take a moment of reflections in the digital race is to see if all the moving parts that form your digital future are in fact coming together the way you intended them to. Digital transformation requires a multiplicity of players and partners – customer journey engineers, user experience experts, consultants, data scientists, system integrators, cloud, SaaS and IaaS providers, etc. Any of these - or even all of these - may have changed while you were out for coffee. Well, in a manner of speaking, anyway.
But, in the desperate bid to hit every sweet spot on the digital horizon, it may well be time to smell the coffee. After all, you spent years, even decades, and in some instance centuries, building the core of your business. Today, more than ever before, it needs as much attention and protection as the future does.
The World Economic Forum on Latin America is taking place in Medellin, Colombia from 16 to 17 June.
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SOURCE: World Economic Forum