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According to a recent survey by E-consultancy, customer experience will overtake price and product specifications as the key brand differentiator by 2020.
Add to this the fact that customers are more digital than ever, demanding an omni-channel interaction model with products and services tailored specifically for them, and it’s safe to say that we are living in the era of the digitally evolved customer, where technology allows the customer to sit at the centre of everything.
Today’s digital customer wants to determine the exact product specification for themselves, the timing of production and delivery, the place of purchase or consumption, and even the price, writes Mpumi Nhlapo, head of marketing and portfolio sales at T-Systems South Africa.
This new business environment, catering to the digitally evolved customer, requires innovation and agility, requiring companies to not only respond quickly to market demands, but to do so disruptively, with game changing business models that place the customer at the core.
Traditional approaches to business and technology are fast becoming irrelevant, and organisations will need to move into the era of Industry 4.0 in order to survive and grow.
So how do businesses ensure they do not wait to be disrupted, but rather become disruptive themselves? And where do they start? And how does digitisation enable this disruption and create a competitive edge?

Who transforms?
There are two broad types of business that we consider: companies that are “born digital”, meaning those organisations that have been founded in the digital era and that were able to leverage mobility, cloud computing and the power of big data as core to their business model from the outset; and companies that “grow into digital”, being those organisations that have been operating on traditional business models, with legacy systems and ICT that need to transform to digital.
It’s a fairly simple matter to embrace digital transformation for those organisations that are “born digital”, as many – if not most – of them are already invested in some sort of digital strategy, and are able to quickly and seamlessly move towards a fully digital model.
For those businesses that are steeped in legacy, mired in draconian policies and weighed down by old technology, transformation can be a daunting prospect. It’s important to change the entire mindset of the business before starting by placing the customer at the centre, and then to follow with bite size chunks, digitalising those areas of business that will add the most value to the overall customer experience, and then transitioning the rest as part of a broader digital transformation strategy.
The type of business also determines its propensity to embrace digital transformation: a data driven company, for example a bank, may more readily leverage Big Data in the short term, while a manufacturing organisation could take longer to put in place the systems to harness data and therefrom pursue a data driven approach.
The nine key priorities to digital transformation are:
Priority 1 – Start with the customer: It cannot be said often enough: this is the age of the customer. Businesses who do not answer the exacting needs of their market will be pushed aside by those who can. Businesses should begin with identifying and embracing technologies that help them to understand their customer’s needs, and then work with that knowledge to tailor their products and services to answer them. A superior customer experience is fundamental today. More than this, the customer needs to form a key part of the value, and ensuring a business is able to interact smoothly and consistently with its customer throughout the value creation process is key.
Priority 2 – Look at data and processes: Data is the new currency, and its value lies in how it is used. There are a host of data-gathering devices and platforms available which offer insight into so many aspects of a business, from understanding one’s customer, to learning where inefficiencies are and how they can be rectified. Data, if properly leveraged, can be used to drive better decision making and identify where digital transformation can add the most value.
Priority 3 – Be secure: In a data driven digital world, data security is a major consideration. The volume of data that is being created and being exposed outside of an organisation’s traditional security infrastructure requires a new approach to ICT security. Compliancy issues also loom, and businesses are faced with the need to understand the legal implications of protecting their customer data and ensuring privacy. There has been a lot of focus on and progress with security services, as an example, by 2020 it is expected that 95% of cloud security issues will not emanate from the cloud provider but form within the organisation itself.
Priority 4 – Digital marketing: The reach and impact of social media on today’s society has driven the growth of digital marketing in line with the need to meet the customer in a digital world where they interact. It is imperative that digital marketing forms part of any business’s customer engagement strategy, beyond just brand awareness activities. They need to use social media and digital marketing platforms as new outlets for conducting business.
Priority 5 – Think Smart: A key driver of Industry 4.0 is the wave of the Internet of Things (IoT). From wearable devices, connected cars, factories and other smart devices, to connected sensors that touch on everything from food to manufactured products and even art. There is a multitude of devices that are constantly collecting data and painting an ever-changing picture of the world. Effective use of IOT coupled with big data will enable future organisations with the knowledge and agility to adapt to rapidly evolving business environment by through continuous product innovation and market alignment.
Priority 6 – Shift your IT from core to enterprise: ICT should no longer be the “basement level department” who dictates a business’s hardware, informing what systems it should be using, and being a cost centre all on its own. No, indeed. IT should be driven from a business perspective, and IT services should, essentially, be business services, supporting the business’s goals and enabling their service and product provision to market. Agility, cost reduction and enhanced customer experience – whether external or internal customer – should be primary focuses for IT, today.
Priority 7 – Scalability: Because customer demand is so transient and quick to change, it’s important to look to technologies which enable scalability, and allow for flexible investment and use. The cloud offers up a platform which enables full business functionality with little of the capital expenditure and all of the scalability.
Priority 8 – Mobility: The proliferation of mobile devices, particularly smart devices has created a whole new playing field for value customer value creation. The most digitally transformed businesses design their process and systems with a mobile first approach thereby harnessing the power that mobile brings and remaining relevant to the digital evolved customer. Key to a mobile strategy is that it should speak to all stakeholders in an organisations value chain including staff and even suppliers.
Priority 9 – Collaboration and communication: The ability to collaborate with resources external to your business environment can set you apart from your competition. In traditional business models, the value is created by the business and passed to the customer. In platform based business models, the value is co-created between the business and the customer, offering the opportunity for the customer to tailor their own solution to their own requirements.
Digital transformation is rapidly disrupting major industries across the globe and driving the future of business.- Organisations that do embark on the journey and ride the wave will eventually get swept away by it.