Digital transformation is the process by which companies embed technologies across their businesses processes to drive efficiency, business agility and finally unlocking more values for customers, employees, and partners alike. Often the goal of digital transformation is to improve the company on a long-term basis.
Covid pandemic nudged many traditional organizations (including many BFSI) to think about new ways to reach out & engage their consumers, partners, and employees. Many of the companies took a tactical approach to solve this problem and some of their business units found innovative ways towards digitalization.
Covid also gave many opportunities to many leaders to course correct their pre-covid digitalization initiatives. In this process, some of the leaders decided to evaluate technologies which they thought will advance their endeavours, set foundations for strong data-driven decision-making, newer ways to generate and deliver content and shifting to cloud native applications.
"Digital transformation is the rocket fuel that propels businesses into a new era of innovation and connectivity," says John Chambers, former CEO of Cisco Systems.
While transformations will be on-going, companies should always look at innovative ways to solve business problems and keep advancing their digitalization programs by evaluating newer ways of doing the same thing better and in a cost-effective manner. The last part is important as IT (Information Technology) budgets are facing strain. Hence, setting the right digital foundation is extremely important to avoid expensive re-engineering & integration efforts.
As per this Statista.com article, in 2022, spending on digital transformation (DT) was projected to reach $1.6 trillion USD. By 2026, global digital transformation spending is forecast to reach $3.4 trillion USD. At the same time, a HBR study mentioned that ~70% money spent on Digital Transformation (DT) initiatives goes waste.
"Choosing the right technology for your organization can be a daunting task with a plethora of options available in the market," says Dr. Thomas Siebel, Founder and CEO of C3.ai. "Successful digital transformation requires strategic decision-making, informed experimentation, and commitment from top to bottom in the organization."
Part of the reason so much money gets wasted is because there is no single technology that will deliver "speed" or "innovation" as such. The best combination of tools for a given organization will vary from one vision to another. Many leaders fail to decide on what products or platforms from which vendors to use, which area of business best benefit from switching to that modern technology, whether the transition should be rolled out in stages, and so on. Often, picking the best solution requires extensive experimentation on interdependent parts (e.g., quick PoC/PoT, small pilots etc.). If each decision must go through multiple layers of management to move forward, mistakes cannot be detected and corrected quickly. Furthermore, for certain digital technologies, the payoff only occurs after a substantial portion of the business has switched to the new system.
Take examples of CMS (content management system), CDP (custom data platform) or AI/ML led solutions and new stuff such as ChatGPT etc. There are many CMS/CDP solutions available in the market; but which will suite one department vs whole organization is something thought leaders should decide early in the transformation rather than deciding when different business units have created their own silos and then go back to the drawing board to pump in more money to correct the legacy after 3-5 years.
Wrong platform/product selection or bad architecture decision during the pilot stages can set the whole DT initiative back by 2-3 years requiring expensive reskilling, re-platforming and builds frustration across teams. Fear of missing out (FOMO) is just too much! [P.S., off-topic, has anyone talked about TCO (Total Cost of Ownership) of Electric Car for over 5 years period yet? Similarly, many organizations want to ride on headless CMS wave, but are they aware of the TCO over 1-5 years and the risks involved going with niche solutions OR, how is it going to help business users or disrupt their lives?]
The 10-Year vs. 2-Year Planning Debate and the Off-the-Shelf vs. Proprietary Technology Dilemma
The long-standing debate between purchasing off-the-shelf tools and building proprietary assets is not new in the industry. According to McKinsey research, top-performing companies are leveraging digital technology to drive strategic differentiation through customer engagement and innovation, rather than focusing solely on cost efficiencies. A key emerging trend is the consolidation and integration of essential digital assets across business units, departments, and group companies.
Top organizations are cultivating tech-savvy executives in-house and more effectively integrating tech talent into their organizations, rather than just hiring new tech professionals. This approach drives key digitalization initiatives from the top down. The increased involvement of CxOs in tech evaluation, scoping, and implementation phases supports this hypothesis.
The advent of new open-source tools and cloud-native solutions means traditional enterprise-grade software, such as API development and management, integration, and AI/ML, is becoming commoditized, thus no longer requiring lengthy evaluation cycles. After designing and developing core solution components within 1-2 years, tech-savvy executives feel more confident in taking up incremental digital initiatives in customer engagement and service areas.
For example, a large IT manufacturing company attempted to develop a Customer Data Platform (CDP) using in-house talent for nearly two years. Eventually, they realized it was not sustainable in the long run, so they halted the project and opted for an off-the-shelf solution. They redeployed the in-house talent to integrate other IT systems with the newly acquired CDP. This example emphasizes the importance of seeking external partners to help evaluate technology and provide a mutually agreed-upon roadmap if in-house specialization is lacking.
The rapid emergence of new digitalization technologies has created increased uncertainty and confusion about which digital investments are strategically right for businesses. This is particularly true for customer experience and engagement technologies, which are part of the overall Martech stack.
Axeno follows these crucial steps to help organizations select the right digitalization technology, enabling more effective implementation and adoption:
1. Establish Criteria: Collaborate with stakeholders to identify deficiencies, desired KPIs, and outcomes. If necessary, conduct cost analysis to determine if using a commercial tech stack is more cost-effective than building in-house or maintaining manual processes.
2. Conduct Research: Assist organizations in exploring various solution options available in the market (analyst reports, peer feedback, benchmarks, etc.). Axeno encourages forming a team with senior leaders who will play a vital role in the entire program.
3. Select technology that fits the business environment: Axeno evaluates each solution's adaptability and scalability against potential business growth and market dynamic needs (e.g., concurrency handling, API availability, hybrid CMS use cases, new channel integration, etc.). If required, Axeno's team may also help with quick Proof of Concept (PoC) or Proof of Technology (PoT). They also compare the business value of each solution and align total costs with the organization's budget.
4. Choose user-friendly technology: Axeno ensures that the selected technology is easy for stakeholders and internal users. They conduct user research to understand customers' and internal users' requirements and environment, then prepare thorough training and communication to facilitate successful technology adoption.
5. Adopt one technology at a time: Axeno prioritizes needs and introduces technology at a manageable pace for the organization. A strategic approach, patience, and perseverance will enable businesses, internal users, and customers to reap the benefits of modern technology.
"Do more with less!" is a guiding principle when it comes to realizing the value of annually subscribed software products. Most software product companies (OEM) offer various editions, flavors, and packaging of their products. These OEMs have customer success teams aligned with clients' teams to share industry-specific use cases.
The Axeno team collaborates closely with OEM partners to understand the different use cases their solutions can address. Drawing from their collective knowledge gained in 100+ engagements, they apply these insights to clients' projects, improving product/solution utilization. This approach helps clients realize returns on investment and increase adoption scores to 70%-90%.
Axeno emphasizes the importance of insiders (employees, partners, end customers, etc.) within organizations undergoing digital or other transformations. While many organizations bring in outside consultants who may apply one-size-fits-all solutions as "best practices," Axeno's approach focuses on insiders with intimate knowledge of daily operations. By collaborating closely with them, organizations can achieve more effective transformations.
Digital transformation offers a myriad of benefits, including reduced costs, improved operational efficiency, better customer engagement, increased NPS (Net Promoter Score), new revenue streams through innovation, and enhanced customer experiences. The right digitalization tools also lead to increased productivity and job satisfaction for employees.
Selecting the right technology for digital transformation can lead to the following benefits:
1. Comprehensive Data Collection for Data-Driven Customer Insights: Digital transformation enables businesses to gather accurate, detailed data across customer touchpoints in near-real-time. By leveraging advanced data analysis tools, organizations can improve decision-making processes and deliver personalized experiences to customers and prospects.
2. Improved Resource Management & Cross-Team Collaboration: Organization-wide resource management solutions showcase the benefits of digital transformation. Enhanced asset tracking, marketing resource allocation, and strategic planning lead to increased efficiency and cost reduction.
3. Enhanced Customer Experience: Companies can use data from customer touchpoints to provide tailored services. Access to accurate customer information enables businesses to optimize communications and product offerings, resulting in individualized experiences that foster customer loyalty.
Axeno has a dedicated UX practice and methodology, which can help you model futuristic customer journeys across customer touchpoints before embarking on actual implementation.
4. Higher RoI (Return on Investment): While small-scale digital transformations can be cost-effective, more comprehensive efforts require higher investment. CEOs and executive leaders are increasingly willing to take risks on digital solutions as long as they can see tangible results. Partnering with Axeno can help identify areas of higher impact, ensuring a better RoI for digital transformation strategies.
5. Improved Operating Model: Choosing the right enterprise solution can dramatically reduce operational complexity through digital adoption. Observability tools efficiently monitor performance and identify improvement areas across the business. Data-driven insights enable companies to model multiple scenarios, predict outcomes, and make informed decisions quickly.
Embark on Your Digital Transformation Journey with Axeno: Seize the Future Today
As Peter Drucker, the father of modern management, once said, "The best way to predict the future is to create it." Embracing digital transformation is the key to creating a future-proof organization. When a company decides to use modern technologies to support its digital initiatives, they embark on a journey towards digital transformation. As technology makes every process more efficient, they reach digital maturity. Although digital transformation may start small, only a few companies achieve digital maturity. Axeno works closely with various stakeholders to help you identify the right enterprise solutions for your digital transformation needs and ensures the efficient adoption of these solutions.
Digital transformation offers a wealth of benefits, including easier access to data, the ability to measure customer behavior, and the creation of better products. It introduces practices that enable companies to leverage modern technology, streamline processes, and develop a customer-centric culture. Furthermore, digital transformation ensures market longevity and a competitive advantage by keeping up with ever-changing customer demands.
When leaders fully embrace digital transformation across their organization, they adopt a new way of thinking and forge innovative business strategies that help them stay ahead of the competition in a constantly evolving digital market. Don't miss the opportunity to redefine your organization's future; engage with Axeno today to discuss your digital transformation initiatives and unlock your full potential.