Digital transformation isn’t just a high-level concept to debate in a boardroom, it can directly impact your company, your product success and your job security. Researchers at the MIT Sloan School of Management have found that companies who fail to address digital transformation experience 30% lower revenue and 25% lower earnings. And other research shows that digital disruption may wipe out 40% of Fortune 500 firms in the next 10 years. Embracing a digital transformation strategy can help you avoid going the way of the dinosaur.
When they’re ready to buy, customers expect salespeople, distributors and channels to have the latest and most accurate product and pricing information.
And finally, when they have issues, customers expect companies to respond quickly with immediate resolutions as well as long-term design enhancements.
Lack of customer involvement and transparency can have disastrous results, including 75% lower lifetime revenue, 26% lower profits and 270% higher customer attrition.
To succeed with digital transformation, experts say that companies need to address four key principles:
- Focus on customer experience: companies need to look beyond the physical product that comes out of R&D and consider the entire customer experience. For example, instead of thinking about making a car, BMW’s DriveNow service reimagines urban mobility. Making a car is part of the solution, but there are also mobile apps, driver recruiting, marketing strategies, parking, pricing and more.
- Support for new business models: companies need to think past the sale of a physical product and consider complementary services or markets. For example, IoT startup Samsara not only sells an IoT device for fleet management, but also complementary services like remote monitoring and WiFi hotspots for driver productivity.
- Rapid responsiveness: customer responsiveness and transparency are critical for digital transformation. For example, a large American food company was frequently losing deals to more nimble competitors because it had a hard time coordinating sales, engineering and operations respond to customers with timely quotes for new food ideas.
- Openness to new partners: customer experience and new business models mean that you often have to collaborate with all types of companies. For example, the Verily Smart Lens is a collaboration between Novartis and Google – two companies that would have never crossed paths just a few years ago.