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Digital Transformation, Part 2: What makes it disruptive?

The smartphone has brought a deluge of disruption to our lives, changing and challenging one industry after another at a staggering pace. It has not only changed the way we interact with games and media, it has even transformed experiences like customer engagement.

Apple stores have done an impressive job of driving engagement with their customer-first focus. Their efforts embody the premise that customer engagement does not end once a product is paid for: Customers may return for help from the Genius Bar or learn how to use their device with online-scheduled workshops and one-on-one sessions. Thanks to Apple’s localization features, customers are greeted personally the moment they walk into a store, delivering an even more personalized experience.

Digital initiatives also improve customer engagement. iPads, not paper, display helpful information and guides for products using video, not text. With Easypay, customers can buy things using their iDevices and iTunes accounts – no wallets necessary. The future will certainly bring even more creative ways technology can enhance customer engagement.

But how do you get in on the trend? It’s clear to see that technology is disruptive. This is precisely why we need to talk about digital transformation. Driven by the combination of ever-growing digitization and evolving consumer demands, digital transformation is the use of new technologies to drive significant business improvements. This includes capitalizing on new opportunities as well as effectively transforming existing business.

Let’s take a look at the elements behind the disruption of digital transformation.

Empowerment of the end user

More than ever, consumer expectations matter. Don’t like that app that you just downloaded? Give it a bad review. The developer will respond. No response means lost customers, or worse, going out of business. We live in an end-user-centered world and enterprises must recognize that their customers and even employees have higher and ever-evolving expectations. What worked a couple of years ago won’t fly today, nor will it continue to hold for the future. If you’re wondering, “Well, I’m in the B2B space, so how does this apply to me?” then you’ve got it all wrong. You are in B2B2C and must know your customer’s customers as well to survive in the “everything as a service” economy.

Let’s not forget that a couple of bright people can do for you today what you needed entire businesses for some years ago.

Users are now so accustomed to the streamlined, instantly responsive experience from Google or Amazon that they expect the same from all enterprises. Providing instant value, mobile functionality, and a user-friendly interface is no longer a bonus value but a necessity. When customers complain online, they expect their feedback to be seen and addressed quickly, no matter what channel they use. There are no excuses for redundancy: Why should a customer see an advertisement for a product that they’ve already bought? Businesses must act accordingly or themselves face disruption.

Digital proficiency

But how do we adapt personally to these changes? Can we or do we need to disrupt ourselves? And how do we deal with the known statistics about Millenials and their expectations?

Ray Wang from Constellation Research made the valuable point that we should not divide people digitally by age, but by proficiency. Digital proficiency is a much more realistic way to approach the varying levels of ability when it comes to digital technologies. Businesses must recognize this for both their employees and their customers. Check out Ray Wang’s post here for more information.

Ray Wang’s 5 levels of digital proficiency are defined as:

  1. Digital natives – grew up and comfortable with digital
  2. Digital immigrants – adopters of digital
  3. Digital voyeurs – cautiously recognize the digital shift
  4. Digital holdouts – resist and ignore digital
  5. Digital disengaged – give up on digital

Even though I am happy to state, “Lucky me, I’m in category 2,” I would like take this further with an additional “digitally balanced” category to describe those who understand and use technology but walk the middle ground between naysayers and instant adopters.

Although digitally savvy, the “digitally balanced” evaluate the risks of technology, weighing the benefits and costs to decide in which direction their digital initiative should take them.

It is important for businesses to have enough “digitally balanced” employees and the right mix of digital profiles, both in IT and in business.

Changing the way businesses work

Going digital also changes the way businesses work. This could range from big efficiency gains that allow employees to refocus their efforts to implementing whole new businesses processes and ways of engaging customers and employees.

Much work remains to be done on this front, so you’d better start soon before disruption hits you hard. This study from Capgemini Consulting and the MIT Center for Digital Business revealed that 70% of businesses use technology only as a substitute for previous analog processes. In other words, many are only digitizing old processes without adapting to the new world. Obviously, this unsophisticated approach hardly qualifies as using technology to its utmost advantage.

Let’s take a look at a business that has been using digital to expand and innovate the customer engagement: Porsche.

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