Take a seat in a crowded coffee shop and try to find a person who is not digitally connected – Easier said than done. Today’s consumer is constantly flooded by streams of information that influence behaviors and provide the ability to instantaneously connect and interact with people, brands, and technologies. We are living in a digital world expected to grow 40% year over year, with data levels reaching 40 zettabytes (ZB) by 2020. This equates to nearly 5200 GB of data for every person on Earth. Let’s put that in perspective. Today the average household creates enough data each year to fill 65 (32gB) iPhones, but by 2020 that number will increase to over 318! This overwhelming access to data is driving a shift in the way brands connect with their customers and is challenging businesses to increase the pace at which they operate.
Organizations are making significant investments in technology to support digital transformation, but the changing technology landscape is only one element contributing to the overall value that can be delivered. An organization’s digital business transformation, along with a resulting competitive advantage, hinges on the business evolving in tandem with technology. Striking this balance maximizes profitability, improves overall customer experience, and increases speed to market. However, the cultural shift required to enable this balance is extremely difficult to achieve within most organizations.
Consider the changing retail landscape. Consumers now have access to products through multiple channels, same day shipping options, and the ability to comparison shop multiple retail outlets within seconds. In response, retailers are challenged with compressing product development cycles and streamlining their supply chains, while continuing to cut costs, optimize inventory, and offer an outstanding consumer experience. So how does the business need to respond?
- Processes must continuously evolve to support the digital age.
Speed and agility are ingrained in tech start-ups, but many traditional organizations struggle to adapt business processes with the flexibility required to provide to real-time feedback. Today’s retail executive must be prepared to approve a virtual product design, without seeing or feeling a physical sample. This is an incredible cultural shift, but it’s this kind of innovation that disrupts the market and provides significant lead time reductions.
- Organizational alignment and feedback loops must speed decision making.
Increasing speed to market is critical, but knowing when to change course is equally important. Agile development methodologies and fail fast approaches allow organizations to test an idea, collect feedback, and quickly adapt. Reaction time in a digital environment often determines the presence, or lack thereof, of a competitive advantage for a given organization.
- Connect data to the desired business outcomes.
From interacting with the consumer to forecasting demand and optimizing pricing, data feeds critical decisions across the entire value chain. Maximizing the power of data requires significant business domain expertise, analytic capabilities, and clear alignment with strategic goals. By tracking millions of transactions every day and using predictive models, retailers can now anticipate the optimal time to reduce prices, allowing them to increase profits, versus using the traditional end of season mark-down approach. Data is powering faster, more intelligent business decisions. Thus, data must be treated as a critical asset of the organization and should be managed with the goal of maximizing the return on this asset.
At the core of each of these changes is not just how the technology is evolving, but instead how people are adjusting both their behaviors and views on the operating models within the organization. Leading an organization through a digital transformation requires a coordinated strategy that examines changes to the operating model, structures, processes, people, tools, and measurements. Without a holistic approach that examines the end-to-end impacts and measures levels of adoption, an organization risks leaving the business and its people behind in its digital journey.
Interested in learning more? In our white paper, Transformation Capability as a Competitive Advantage, we will take an in depth look at the Transformation Lifecycle and Transformation Infrastructure to better understand why they are so critical to success and what it takes to develop and sustain them. Continue to visit the Enaxis Insights page for this and other relevant topics.