Other articles by Rohit Kapoor
This is no longer the case. Covid-19 has caused digital consumers to go from being a customer segment to the customer base of every company. Regardless of age or demographic, the majority of interactions with consumers now takes place over digital channels. This trend is here to stay, with a McKinsey report stating that 75% of those using digital channels for the first time plan on continuing to use them once the pandemic is over.
Organizations are adapting to digital-first employees as well. The pandemic made it apparent that businesses must shift from a work-from-office model to a workfrom-anywhere approach, providing employees with the platforms, information, and tools they need to be effective no matter where they’re located.
The primary challenges facing businesses today are digital in nature — and so are their solutions. Every company has become a digital-first business, using digital as their primary approach to problems and opportunities.
“Regardless of age or demographic, the majority of interactions with consumers now takes place over digital channels.”
Taking this approach is uncharted territory for many organizations. They must now contend with developing customer relationships in online environments that can lack the empathy or personalization of human interactions, of building brand identities in what often seems like a homogenous digital environment.
However, strategies for overcoming these challenges existed before Covid: gaining a 360-degree view of customers using data, enabling flexibility through the Cloud, using AI and machine learning to enhance efficiency. Succeeding as a digital-first business depends not on inventing methods for overcoming these obstacles, but on implementing and scaling these existing solutions. By following the approach outlined in this playbook for digital-first businesses, organizations can find success in a digital-first world.
The Digital-First Business Playbook
Modernize and Enrich Data
Every objective businesses are attempting to achieve today, from the hyper-personalization of customer experiences to increased employee productivity, requires data. This need is especially pressing considering the current volatile environment. Consumer behaviors, commodity prices, and markets undergo massive shifts with increasing frequency. Access to real-time insights lets companies respond to these changes quick and with precision.
However, the technology used to capture and clean data is often lacking for many companies. They may not have the tools needed to turn unstructured data into usable structured data assets, or to break down data siloes to ensure information is available and accessible.
In-house data is also not often enough for organizations to gain a full-fledged understanding of their customers or the changing market landscape. By enriching this data using third-party data brokers or the data publicly available through government agencies, businesses can gain insight into consumer behaviors and economic fluctuations. This can span from purchasing granular data that can be applied on an individual-by-individual basis, such as credit bureau reports, to freely accessible data on macro trends, such as employment statistics.
Data has become the fuel for growth. By modernizing data practices and using a combination of internal and external data, businesses can position themselves to understand, predict, and act upon market and consumer trends. For more information on how data can create value, read our thinking on the data-led business.
Re-Architect Data Flows
Mapping out a process from beginning to end is the starting point for operational improvements. By knowing the components, hand-offs, and dependencies of a task, organizations can determine how to best optimize the way work is performed by removing unnecessary steps or adding digital interventions such as RPA.
Similarly, organizations can re-architect their data flows to better capture and utilize data. This entails mapping out where data is being generated, how it’s cleaned, and where it’s stored. Mapping out data in this way lets companies identify potential siloes and ensure accessibility.
There is often a large amount of data generated that goes untracked and unstructured. By mapping out data using data flows, businesses can identify these potentially valuable data assets and determine what tools are needed to capture and turn this unstructured data into information that can drive value-creating decisions.
Accelerate the Move to the Cloud
Making rapid, accurate decisions is only part of the equation for success as a digital-first business. Organizations must also flawlessly execute these choices, sometimes in the face of outside events disrupting business as usual.
This was the case in the early days of the pandemic, when organizations needed to rapidly shift from working in offices to a work-from-anywhere model almost overnight. ERPs, HR systems, and financial portals that were designed for an on-premise environment were found to be no longer viable, and businesses struggled to adapt.
Moving onto the Cloud had been a priority for most organizations before the pandemic. The lesson from the early days of Covid-19 was that this migration had to be accelerated so that businesses would never experience such negative disruption if and when a similar event occurred. By accelerating their journey to the cloud, organizations can seamlessly shift work across locations and geographies, improve productivity by making data and tools accessible, and increase their flexibility and resilience.
Cloud migrations and architecture require in-demand talent and technology. Businesses that lack these resources themselves would be well served by building up a network of strategic partners and vendors that accommodate for any gaps in their capabilities.
Hyper-Personalization and Playing to an Audience of One
To consumers, most digital interactions and transactions feel the same. Almost any product or service can be purchased with just a few clicks. As a result, building loyal customer relationships has become increasingly difficult. If consumers can be acquired within 60 seconds, they can also be lost within that timeframe.
What differentiates digital winners from losers is the capability to build personalization, customization, and empathy into customer journeys that are good as or better than face-to-face interactions. Data-driven customer intelligence creates opportunities to create marketing messages designed specifically for individual consumers, delivered at the customer’s preferred time and over their preferred channel.
The opportunity for individualized customer engagement goes beyond the way organizations distribute marketing messages. Products and services can be designed for a specific customer’s preferences and circumstances as well by leveraging enriched data and advanced analytics. This could include creating an insurance policy that takes into account the customer’s needs on a granular level, such as healthcare providers adapting treatment plans to account for lifestyle factors including access to transportation or medication compliance. By treating each digital customer as a unique individual, organizations can build longlasting, loyal relationships.
“What differentiates digital winners from losers is the capability to build personalization, customization, and empathy into customerjourneys that are good as or betterthan faceto-face interactions.”
Ongoing Refinement for a Flywheel Effect
Success as a digital business is not a matter of checking off a set of boxes. Modernizing and enriching data, moving to the cloud, playing to an audience of one — these objectives simply lay the foundation for future success. Instead, transformation must be approached as a continuous process.
The information captured by re-architecting data flows can be used to determine what interventions had the largest effects or what obstacles negatively impacted customer journeys. By leveraging this data, processes can be improved, the performance of AI and machine learning algorithms can be enhanced, and opportunities for reducing costs or creating value can be identified. These improvements will cause further improvements, creating a flywheel effect and spurring growth.
Digital and data-based interventions will require new systems of governance to ensure they’re deployed ethically. Companies should consider creating oversight committees to provide checks on whether customer data is being used exclusively for the purpose it was originally collected for, and ensure that bias does not creep into any analytics or AI algorithms. Strong governance will help create a sense of trust between consumers and the business — and ensure violations of increasingly stringent data protection regulations are avoided.
“By leveraging data, processes can be improved, the performance of AI and machine learning algorithms can be enhanced, and opportunities forreducing costs or creating value can be identified.”
A Playbook for Digital Success
The journey for succeeding as a digital-first business can seem daunting. Every company now exists in an unfamiliar landscape where circumstances can dramatically change from one day to the next. Redesigning a new approach to data and digital transformation while dealing with these outside disruptions — and finding better ways of engaging digital consumers — can appear excessively difficult.
Using the strategies outlined above, companies can grow, better serve their customers, and become more resilient. Modernized, enriched data and re-architected data flows drive better, faster decisions. Moving on to the Cloud enhances flexibility. Hyper-personalization lets organizations build long-lasting customer relationships in a world of 60-second decisions. When done right, all of these improvements build on themselves, creating a flywheel effect.
Every company is contending with a rapidly changing market. The one constant that organizations can depend upon is that those companies that embrace becoming digital-first businesses and follow these strategies will succeed.