The IDC defines digital transformation as
the approach by which companies drive change in their business model and ecosystem by leveraging digital competencies.IDC IT Executive Programs – Digital Transformation
Digital transformation is about improving processes using the new technologies of cloud, big data and machine learning or artificial intelligence to remove the mundane and repetitive data capture from work so we can focus on analysis and planning.
Digital Transformation in Finance
When you look at the finance function, digital transformation often includes
- Automated data entry of transactions
- Automated allocation of costs to departments, cost centers or other groupings
- Update and calculation of sales tax rates and charges
- Electronic payments both inbound from customers and outbound to vendors
- Automated bank reconciliation, positive pay and other treasury functions
These tasks are critical to the function of business but are often better performed by a computer. Now add in the newer technologies of big data and machine learning and the opportunities for improvement expand.
- Automated verification and capture of information such as addresses, phone numbers, tax ID’s etc. as data is being entered.
- Transaction validation based upon historical data. For example, who would charge a marketing expense to a maintenance department?
- Proactive communication with customers and vendors based upon data patterns.
The goal is to not just capture information, but analyze it during entry to elevate the level of our work. Today’s systems can alert finance to look at a transaction because it doesn’t look normal. Let the computer ask a question for the human to answer. If a vendor never delivers on a Sunday, how is this invoice accurate?
Digital Transformation and the Customer Experience
Customer experience really means how easy are we to work with. Processes should be designed to make doing business easy for the customer. With digital transformation we can improve the customer experience in new ways. This trend started with the online shopping carts making suggestions with “customers who purchased this item were also interested in…”
In retail we see clothing stores capturing customer measurements, style preferences and favorite colors in addition to purchase history to better suggest what to buy. Phone location tracking is used when near a store to send an add or even in store to suggest a specific product the customer is near! While some may look at customer intimacy as “big brother” watching over us, others appreciate it as time savings. Now with big data, retailers are targeting messages by customer preference. Where the GenXer may appreciate suggestions, the baby boomer may prefer more traditional e-mails. By capturing and analyzing the data, merchandisers can elevate their work to crafting the right messages for the computers to automatically deliver.
Digital Transformation in Sales
Sales has shifted from a sales cycle to a buying cycle which has raised the required level of coordination between marketing and sales. Over the past 10-15 years we have seen a plethora of new software designed to improve the effectiveness of marketing and sales. Software has evolved with the traditional CRM software expanding functionality to the new automation platforms like Hubspot, Marketo, Elogua, and Pardot to name a few.
These platforms, when executed properly, integrate with the core business management software to both synchronize information as well as use the knowledge in the ERP to inform the automation. Many of the platforms are also now able to enrich their data from LinkedIn and other sources to keep data up to date and provide more context for the sales and marketing teams. In turn, they also keep the accounting software up to date with proper e-mails and location information.
These are all great tools and steps in a sales improvement program, but are they really transformational? When a retailer changes its behavior based upon the customer preferences, they are transforming the business around the customer preferences. When transforming a sales function, we need to recognize changes in customer behavior and preferences to redesign and elevate the work of our sales people. Digital transformation includes the redesign of processes and retraining of staff to achieve leaps in efficiency.
For many companies, the sales process transformation has included thinking of the entire customer lifecycle. New activities in the management of a lifecycle may include:
- Creating more success stories and using them in social campaigns so customers, like the ones you have now, can find and research your company.
- Clearly articulating unique differentiators to intrigue the customer into connecting with your sales team.
- Providing more self-service tools for customers so they can choose their level of interaction.
- Improved data capture and analysis of how customers interact with you and what delights them.
Your Transformation Journey
Digital transformation is not a task with a start and finish, but a journey that requires continuous and ongoing adaptation to continuously delight the customer. It does not require a specific cloud technology, software or platform, but a mindset and a commitment to listening to the customer and responding appropriately. Listening to the customer includes analysis of:
- Purchasing patterns
- Product usage patterns
- Customer Service Inquiries
These analysis are not just for sales transformation, but to better understand the customer experience for product design, delivery and support.
In Part 3- Creating Digital Transformation, we will provide a high level map for your Digital Transformation Journey. To get started or learn more about Digital Transformation, schedule a Journey Call with one of our experts.