In a world where new technologies enable consumers to access services instantly and receive products within 24 hours, there’s no place for old-fashioned businesses to hide. Digital-native retailers and entertainment companies have raised the bar with their slick user experiences and mastery of logistics and fulfilment.
Consumers are demanding the same instant gratification from all the organizations they interact with—from banks and insurers to government bodies.
Even in a business-to-business context, buyers have little tolerance for slow, bureaucratic or error-prone processes. They expect suppliers to provide a seamless, consumer-grade digital experience.
As this sea-change in customer expectations takes hold, organizations are recognizing the need to rethink their business models through a wide range of business and digital transformation initiatives. In this article, we’ll look at some of the key trends behind the need to transform, as well as the new challenges and new solutions for transformation teams that will emerge in 2020 and beyond.
Business transformation comes in many forms for organizations. At its heart, it is defined by a step change in how the business operates.
Necessitated by hypercompetitive markets, and an ‘always-on’ mentality of organizations who innovate by default, business transformation comes in three forms:
Digital transformation is defined by the application of business technology to improve customer experience.
This can be achieved through the adoption of digital systems to modernize products. Or, this could be digitalizing existing processes to replace legacy systems or tools.
Revolutionizing your organization to adopt new technologies allows you to serve customers faster, more efficiently, and with greater effect.
Data transformation focuses on the collation and usage of information to make business decisions.
This can entail information on buying behavior, or effectively tracking your operational and strategic initiatives.
Great value comes from centralized collection and analysis of your data, but a digital solution must underpin this transformation.
Solution, or product, transformation is an overhaul of how your organization soothes the pains of your customer base.
Every element of the business is fine-tuned to customer requirements.
The result is that your organization can meet the modern expectations of buyers (see Netflix, Uber, HubSpot etc.) where their placing the customer at the heart of their business generated greater revenue and longer-lasting customer relationships.
In summary, business transformation in 2020 is defined by five themes:
1) Businesses will transform to provide Everything-as-a-Service
2) New technologies will accelerate the need for digital transformation
3) The number of transformation projects will double in the next five years
4) Implementation and governance will continue to be the biggest obstacles to transformation
5) New tools, data and analytics will be critical for successful transformation
Read on to learn why we’ve chosen these five trends to define transformation in 2020.
The key point to realize about increasing customer expectations is that they represent an opportunity as well as a threat. While a focus on quality of service and customer care puts extra pressure on delivery teams, it also offers a path to more reliable revenue streams and repeat business.
Instead of betting on your sales team to close big deals at random intervals, you can move to a subscription model. Here, the money flows in predictably and regularly every month—provided you can keep your customers happy.
The reduced risk and predictable cash-flow of moving from a product model to a subscription model are significant attractions, and so many organizations are embracing the change that we may well look back on 2020 as the year of Everything-as-a-Service.
To make that happen, however, businesses will need to transform their organizational structure, and naturally, adopt a solution transformation mindset. The role of traditional sales teams will diminish, while newer functions such as customer success management and after-sales support will become more important.
For many organizations, this will require a huge and rapid shift in the corporate culture and philosophy. This all-encompassing change cannot be delivered as part of business-as-usual. Strategic initiatives are the vehicle for transformation.
The move towards new, more customer-centric business models is accelerated by the increasing availability and maturity of next-generation digital technologies.
As the Fourth Industrial Revolution progresses, we’re seeing a confluence of technologies such as artificial intelligence and machine learning (AI/ML), high-speed mobile networks (5G), and the proliferation of low-cost smart devices (the Internet of Things, or IoT).
These technologies aren’t just making it possible for companies to deliver their products and services in new ways—they’re making it imperative to do so. In today’s red ocean markets, if your business doesn’t have the technical nous to get new ideas to market as quickly as the competition, your days as an industry leader are numbered.
That’s why digital transformation should, where applicable, go together with the other two forms of business transformation in 2020 and beyond.
Stories of successful business transformation initiatives do not fall on deaf ears.
There are dozens of examples of how a deft realignment of a business model can transform startups into giants and laggards into leaders almost overnight.
Transformation is the means to deliver the step-changes in business performance that investors expect. The volatility of today’s business environment means that slow-and-steady is a sign of stagnation. Businesses that vigorously embrace transformation will survive and prosper.
As a result, it’s a conservative estimate to predict that the number of transformation projects will double in the next five years. Any organization that isn’t preparing for transformation is preparing to fail.
Despite the acknowledged imperative to transform, at most organizations there’s still a wide gulf between defining a transformation strategy and driving genuine change at the operational level.
Turning vision into a reality is difficult. Traditional, cumbersome methodologies to govern transformation initiatives are rudimentary at best—and non-existent at worst.
There remains an overreliance on primitive project management and collaboration tools such as spreadsheets and email. Organizations lack the ability to encapsulate their overall strategic objectives in practical initiatives, or to break down those initiatives into tangible goals for project participants at the operational level.
There too is also no clear way to bubble information on progress and results back up the stack.
As a result, effective governance of strategic initiatives is almost impossible. Senior leaders lack insight into the current status of each initiative and cannot make informed decisions to steer the business in the right direction.
Fortunately, the 2020s will see a change in the status quo. Strategy Execution is now being widely accepted as a key discipline for successful business transformation because of its proven success in converting strategic visions into real-world business value.
Specifically, Strategy Execution systems will be paramount to the adoption of a data transformation strategy.
Strategy Execution systems embed strategic information and monitoring into every area of the business. They provide a single source of truth for strategy-relevant data, and do so with instant access.
For example, with the i-nexus Strategy Execution Platform, organizations are supported with the ability to:
By integrating strategic planning information with operational data from existing ERP and financial systems, organizations can get an even richer sense of which strategies are succeeding, and which are struggling to make an impact.
The i-nexus platform provides real-time Strategy Execution insight in an appropriate format for stakeholders at all levels of the organization, with high-level reports for senior leaders to instant, granular feedback for daily contributors—and intermediate dashboards for every level of management in between.
With these trends firmly in mind, i-nexus can help you drive a culture of transformation throughout your business.
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Deborah Biscomb is Head of Marketing at i-nexus. Deborah has wide-ranging experience of markets such as retail, manufacturing, financial services, public sector, telecommunications, energy and utilities, distribution and logistics. As Head of Marketing, her drive is to raise awareness and understanding of the challenges facing enterprises in controlling their strategy and driving superior results.
If you’d like to talk more about Strategy Execution, reach out to Deborah on deborah.biscomb@i-nexus.com or connect with her on LinkedIn for the latest strategic insights.