Opinion: How traditional businesses can – and must – effectively manage their transformation to the digital model

With customers increasingly demanding online solutions from business, traditional models are scrambling to bring their online engagement models up to snuff.

We live in a world where the boundaries between physical and digital are blurring. We increasingly transact with businesses solely online and we judge these interactions by our experience with our favourites: Google, Uber, AirB&B. For traditional industries, this introduces huge complexities – and an undeniable need – to move towards a digital business model.

 Breaking down the walls

A digital business model requires an organisation to seamlessly connect mobile applications and websites to a complicated collection of legacy systems and applications along with new repositories of information, like Twitter and Facebook, none of which were originally designed to work together.

By connecting these systems however, valuable data is unlocked and can be analysed and presented through new digital engagement platforms, providing useful information to the consumers and businesses alike. In this new digital business model, organisations now have a genuinely two-way relationship with their customers, with customers demanding 24/7 access across multiple platforms.

Image: John Ascroft, CIO, Jade Software

But it’s not all about technology however. Digital business models require a new way of thinking, new relationships throughout the organisation, and new processes to support a more connected and engaged consumer relationship. The customer experience has now become the most important focus within a company.

While New Zealand businesses have been slow to move to a digital business model, organisations are now in a race to demonstrate a slick digital experience, as new digital first competitors, like Powershop, come to market every day disrupting their industries and providing customers with different and preferable user experiences.

You need the right person for the job

According to Gartner, 50 per cent of businesses expect to transform, at some level, into a digital business by the end of 2016. Yet organisations are finding they don’t have the skills to manage this transition, largely due to a lag as businesses fill roles that never used to exist, like data scientists, hi-tech developers and digital managers.

Digital business models also impact how organisations work together internally. Departments can no longer work in isolation, and new relationships across the organisation need to be formed. Marketing departments need to work with IT departments to get access to the information they need to engage with their customers effectively.

Go hard or go home

Businesses need to understand the integrated and holistic approach that is required to successfully implement a digital business model. There are many agencies and integrators that claim to help businesses on their digital journey, often simply add to the confusion and this is a pitfall businesses need to avoid. Digital agencies offer beautiful, yet often unfunctional mobile applications, while systems integrators cobble together core enterprise applications without the presentation of usable data.

Businesses also need to avoid the trap of treating their transformation as a series of digital projects, adding an app or new functionality. This won’t address the purpose at the heart of a digital business which is creating an agile and responsive service that can transform as customers’ needs change.

Thinking outside the box

Becoming a digital business is a necessity to retain your customers, but will not necessarily give your organisation the competitive edge. It comes down to the approach. To get the most innovative result you need to make the conscious decision to combine creative and analytical thinking, a practice more difficult than it sounds for businesses. 

Many approaches can stimulate creative thinking: We’ve held workshops with the Elam School of Fine Arts, pairing technology people with dancers and sculptors to explore what creative thinking is and how it can be applied in the business environment.

By learning how to incorporate creative thinking with the typical analytical method staff can approach an issue from a different and fresh angle, leading to more innovation and better end-user experiences.

While the idea of incorporating creativity into business process can encounter resistance from within an organisation, the results speak from themselves. When combined with an integrated approach, the required skills and leadership support, businesses can grow their customer base, more effectively capitalise on gaps in the market and reduce operating costs, all while generating additional revenue.

John Ascroft is chief innovation officer of Jade Software