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Sunday, March 29, 2015
The present era of business is seeing lot of excitement and promise all around. Around the world, every day in our lives bring lot of changes – fast, unpredictable and may times we have to struggle hard to understand what the change stands for. Globalization, technology has transformed the playing fields across continents, industries and sectors. Very powerful forces of change have shaken the beliefs in many aspects of governance and social thinking. Fortune 500 companies list is changing faster than the fast pace that we have seen in the past. Powerful brands have suffered huge damages and many industries have gotten transformed substantially so much so that many successful leaders today claim their business need to adapt and transform faster than ever. Leading edge corporations run faster in this direction to ensure that their rate of change inside is ahead of the change seen in their external environments. Looking at these developments, it’s clear that the time to re-imagine the future is now, and it is best done by a fresh school of thought that governs our thinking frameworks to enable a fundamental rethink and envision what is desirable and sustainable. For some of the enterprises, it looks like embarking on a massive digital initiative would help meet some of these opportunities and challenges.
One of the most opportune moments in business today is the ability to strike really big in the digital space. The opportunities provided by digital structural change are really far reaching and there’s every indication that such initiatives will get more bold and impactful in the future. The reach and virulence of such initiatives become more evident when it can be seen that everyone can participate in varying capacities in the digital space so long as they have access to the internet. In the word of myriad type of configurations, it can be seen that flexible and varied relationships are formed between people and their diverse identities in the online and offline worlds. This also throws itself amenable to experimental forms of participation and such collaboration will become more pronounced in the medium term, which will continually influence the value creation process in many firms. Digitalisation is thus changing our social and economic lives as well as the way that we interact with one another and how corporates and individuals (have to learn to) handle (personal) data in future.
The larger risk that corporates face in this sweeping wave of digitalization is one of existence. If they do not manage to change and succeed in the digital world, they will be out of market over a period of time. The question then is who are at risk and to what degrees and how to mitigate the risk while capitalizing on the opportunity to grow in this age? The road to survival for several longstanding players is thus paved with painful consolidation measures and cost-intensive reforms that are; however, important in ensuring they hold their own in the new competitive environment of the future. The increasing adoption of digital models and technologies give rise to new market entry opportunities, particularly for corporates who can leverage technology in their core operations. As in the case of a market changing and a new market emerging, the attractive opportunities for the new players, create and impose new norms of competitive pressure on the established players. Due to digitalization, many traditional firms are finding themselves exposed in some areas that could in turn develop into Achilles' heels. These vulnerabilities provide especially fast-growing internet firms with the opportunity to occupy certain market niches, both to monetize their digital content and make their own product range more appealing to an even wider audience. After all, the business world is ever dynamic, and the dynamism is heavily accelerated in the digital wave that’s engulfing the world of business.
A lasting change in consumption and media usage behavior has occurred. Today it is not always about ownership and possession, but more often only about access to products and services. For some time, lots of small technology-driven start-ups and niche operators active in the markets that are also fighting with the incumbents for market share. In addition, the internet behemoths have been spreading their wings/ influencing the business models across various industries and services,, investing billions of dollars, experimenting in diverse markets – increasingly also outside their core business – and offering new especially digitalized business models. Competition is therefore intensifying appreciably in many sectors and in many markets.Sharing assets, services, and time are known elements; in fact the “sharing economy” is not new, but the internet is accelerating its penetration into daily life. The sharing economy is a phenomenon created by individuals seeking to provide flexible services, lower costs and generate profits; it works because it creates more favorable economics when parties share underutilized assets. In this model, the ability to scale up the business is related more to imagination and not just around asset ownership.The publishing sector is now offering e-books on demand (Scribd, Kindle Unlimited); in the music and film segments digital content is increasingly being streamed (Spotify, Amazon); accommodation is being offered and organized globally by private individuals (Airbnb); projects and start-ups are obtaining finance via the crowd (Seedmatch, Kickstarter) and the mobility and local public transport sectors are also seeing alternative, web-based business models being offered (Uber, Lyft). Add to this the consumer’s desire to be globally minded, sustainable, and adventurous and valuable. This shift in consumer behavior towards welcoming services and sharing assets with strangers was born out of the peer-to-peer marketplace model first introduced by internet companies like eBay, Craigslist, Napster, Wikipedia, YouTube, and Ask.com. The business ideas behind them are often not really new in and of themselves, but they are based on digital value creation processes. In addition, the new players speak the language of the internet. “Convenience”, ubiquitous access across channels and “one-stop shop” are the key ideas. The economics behind this is relatively simple: digital value creation processes can be managed much more cost efficiently and wider (customer) reach is achieved faster thanks to economies of scale and network effects. In dynamic markets with shorter product life cycles these are valuable competitive advantages.
Ofcourse, some of these modern developments are still in their infancy and require an appropriate regulatory framework in order to be able to achieve their full potential. Various parts of the word is just seeing some maturity regarding applicable laws for the internet. The challenges include finding ways of usefully integrating modern technologies and methods into people's daily lives without violating freedoms, without discrimination, competition infringements or tampering taking place or without increasing people's fear of being spied upon. On account of the many varied interests and the international nature of the products and services, however, (national) legislation pertaining to online issues often has a limited impact.Many new player have their noses in front in many markets because from the outset their business model concepts have been “digital”, as have been the structuring and regular development of these models. These digital players can expose their offerings as services to their ecosystem, enabling collaboration amongst with partners and sometimes competitors. This makes them fast and flexible in their reaction to market needs but most importantly they change the dynamics of the business as a whole. The consumers benefit a lot and they begin to demand more and more. It is apparent that many of the traditional general firms can be found to be lagging behind the new players with regard to implementing the necessary digitalisation of their various marketing and communications channels and of preferring to work on siloed solutions instead of subjecting their processes to radical innovation therapy. The battle for the wallet share of digital customers is in full swing and is so intense that many established companies are (still) not adequately prepared for it.
With the digital ecosystems currently in place the firms operating online are relatively small in number, but they command a relatively strong position in the market. All the same, many small start-ups as well as niche operators are providing valuable stimulus to the market, but it is not uncommon to see them serve as attractive takeover candidates for the wallet rich or bigger digital players. However, although some digital firms and some start-ups are currently (still) leaders in modern technologies and data analysis – the battle for customers and market share in the digital age has only just begun. Internet behemoths like Google, Facebook were also small when they started out. Of course they enjoy a certain lead in information and expertise with respect to algorithms and data analysis.The wannabe’s and the ambitious enterprise must begin planning the digital re-imagination of their businesses now – just as companies like Netflix/Amazon did long time back. Established companies in these sectors will be challenged by outsiders and newcomers that aren’t burdened by legacy business models and assets. Just as online publishers are trying to displace established publishers, Netflix displaced Blockbuster companies in sectors with high digital intensity should expect serious incursions into their markets. In contrast, companies whose offerings and customer experience can’t be replaced by a digital version – think Disney World – might focus less on digital reimagination and more on transforming the offering they provide today, as Disney is doing with its theme park digital initiative or like in the case of a bank/insurance company leveraging digital technologies to the hilt in providing services to their customers. . The strategy in this case may be more about digital transformation. These companies – especially ones with big investments in physical assets – must find ways to use digital technologies to give customers a better experience with products and services (e.g., a trip to a Disney resort) that they already value.
Many online innovations are incremental in nature and emerge largely via trial and error. However, they require investment, scope for experimentation, scope for freedom as well as scope for creativity and error tolerance. Traditional firms, too, must continually adapt and improve their capabilities for this. After all, there is no magic bullet for innovations in the internet age. Just as in the analogue age, the people behind them are creative types who have good ideas, are courageous and prepared to take risks – and of course need a bit of luck. This is, however, not the main issue.it's a tribute to the accelerating accelerating digital phenomenon that some nations are now focussed on innovation-stimulating measures that includes an appropriate internet policy, improved immigration opportunities for skilled personnel, greater autonomy in the higher education sector or the rethinking of the (excessively) long periods for which intellectual property rights are protected in some sectors. With the limitless possibilities for upside in the digital world, the most often asked question is which is the right digital strategy for a company or a division of that company (if its business is quite different from the businesses of other divisions – different customers, different offerings, and so on)? We believe it depends largely on two factors - Digital affability of the company or division: This refers to the degree to which its core offerings, business processes (especially marketing, sales, and distribution),and market’s experience in using those offerings can get digitized. The sectors that have a greater digital intensity are banking & financial services, insurance, media and entertainment, telecommunications besides software Such companies are especially vulnerable to disruption, since their products can be fully digitized: payments made through a smartphone, movies streamed to a desk or tablet computer, software rented ‘by the tap’ from the cloud, and so on.
Like in every other evolving paradigm, clearly not all can get into the digital bandwagon and count results by the quarter - aside from the vision and sophistication of the program being attempted influencing the quality and upside of the outcomes, different sectors will clearly have graded adoption. while overnight quick ramp-up success stories will continue to show up, fact is that a complete digital canvas as a reality for all industries will take its own time. Apart from the inertia inside enterprises, investment size, regulations, market acceptance of digital offerings will play a big role in shaping their digital journey. There may be some industries that may not see digital disruption in some parts of their business - like in the utility business with massive assets and providing everyday service to customers, but these companies need to exploit digitalization for providing better experience - which in turn could beget huge upsides in their top lines and bottom line. Like Uber experience or IoT enabled Barbie toys almost redefining the core of the business, automobiles and wearables embracing digital, there are enough white spaces to conquer. It’s seen that in early adapters, digitization helps the enterprises to get closer to the customers and are redesigning the future of business. The gap in traditional customer engagement models will directly and the new avenues of interactions powered by technology will pave the way for the next wave of disruption. The best guideline to make this happen will be to build an ecosystem that will help us look at our products from the customer’s perspective, and help conduct easy business with everyone. Clearly, the question is not how and why,but fast becoming “when” but the answer is ready : it’s “now or never”.
Saturday, March 21, 2015
In this consumer era, the power of the consumer is such that they tend to make no practical between the digital and the real, the online and the offline. The current age is characterized by the fact that digital is simply part of our daily lives, from working and shopping to sleeping and eating—even finding a partner. This has led to the situation where the boundaries between channels are virtually non-existent but customers need unique experiences.. The expectation is for the brands and the entities to provide exceptional experiences. Any evolving idea/concept/framework soon becomes outdated with the galloping customer expectations and the innumerable choices that parade before them. This means, on a standalone basis, the device, platform or location don’t so much count as the defining edge that would persuade a customer to buy a product/service. The overall experience counts more powered by engaging content and the superior value offered by service/product.
To provide such an edge in every transaction with the customer it becomes important to satisfy customer demands and expectations, technology, process and business alignment across service and marketing becomes highly critical. It’s now part of the established folklore - technology can get companies only that far, cross functional processes aligned to business performance leveraging state of the art technology implemented in a disciplined manner are essentially needed to provide an enriching customer experience. In this digital age, for an enterprise, the ability to connect real time business and social interactions across business units - say social media monitoring cell (part of marketing) tracing a customer remark on a service and business response to such remarks enables enterprises to provide the digital experience in real time delivered in a personalized way in a channel of customer’s choice. From the role of anchoring promotion, marketing today walks almost the entire path in a customer’s journey and they can be effective only if they are real time integrated with the business units, to provide the customer right set of responses.
The reality is that customer interaction is a treasured moment for every enterprise. Every interaction could have a varied purpose ranging from selling to needing a service or a potential cancellation. The interaction may or may not be attributed to company’s campaigns or promotions Being aware and in a state of readiness to interact with customers –known or new with a variety of expectations is fast becoming a basic expectation that every modern enterprise need to have. If done well, by empowering frontline employees, there is an enormous opportunity to maximize the value of each interaction Empirical evidence suggest that if executed properly, optimizing customer interactions can effectively sell 20x more offers – leading to anywhere from a 30% to 100% increase in conversions.
With all the technology options and opportunities that business has today, where do we start and what do we focus on is a standard question that would come to one’s mind. The hard fact is that , it is in this moment that your strategy will earn its success. Without proportionate investments with customer behavior in the moments of truth and aligning everything with business outcomes, thestrategy may come as a cropper. Let’s now look some of the critical blocks that need to be set in place for enterprises to get to this level of maturity and sophistication. The customer data is very important for any enterprise. The data sources can be varied – CRM, Self Service Application, Marketing Automation etc. These data have untapped value and are highly relevant in finding value over the customer’s lifetime. The data gets a life of its own with contextual integration done in real time or near real time. The marketing folks would be well focused to create strategic insights out of these data. The hard reality is that these customer data sets are going to explode in volume, variety and the speed at which these get captured. As business grows, your company succeeds, business needs to manage more data – calling for new capabilities to process these data in real time/near real time and find patterns. Reliability of the data, speed of processing matters in making the outcomes more relevant to business needs.
Customer data should be made available to all inside the enterprise dealing with them. Not just in raw form – but the processed data sets – segmented and amenable for targeting and other actions, in easily accessible ways. Such data ought to provide direct , measurable and meaningful l insights into customers and provide an easy path to defining and delivering a relevant set of products/information/services to them. If enterprises were to leverage this effectively, the net result would be a very significant mechanism in action that can provide enhanced meaning and value in every possible interaction with the customer. In many places this can be automated data that acts programmatically or with some moderated manual overrides, where necessary. The outcomes of such initiatives are highly alluring – it’s seen that, successful data-driven marketers realize a 40% competitive advantage over the customer.Again the cardinal principles kick in here – the data sources and data set are only relevant based on the efficacy of integration and processing of the raw data available with the business. Remember Garbage In, Garbage out – except that the outcome can substantially vary based on the means emp0loyed to integrate and process the basic data. The cost of inefficiency and cost of quality here could be very high – essentially taking off substantial money out of the table that could have come from possible business revenue. . Any business generating initiative starting from segmentation to targeting to running campaigns are like recipes in real world – all portions need to come together in sequence with appropriate levels of gradations to get the perfect accolade from the consumers. Needless to say, mismatched and uncoordinated recipe mix or inefficient cooking process could lead to a catastrophe – the analogy holds good for the business marketing world as well.
Next, the role of analytics, a pillar in the marketing and customer world. First off, analytics provides the global view of the status if various campaigns and the net results driven thereof. The best part of analytics is the ability to zoom in and zoom out – look from the prism of micro and macro at the same time. In real life, the customer data can be made available to business in various forms – micro data or macro data. The beauty of analytics kicks in with its variety in being able to process/handle individual interactions and entire set of campaigns as the need may be. With deeper insights pertaining to specific customers, the business team/ system can bring forth more efficiency in dealing with them. An early judgment of the customer needs and expected outcomes makes the process lot more efficient and result oriented. The superior insight that analytics can drive towards specific customer needs can provide awesome experience to customers and deliver disproportionate results to business. Once data transforms to actionable insights, the results can be of very high value to the business.
Data driven companies find that their advantage lay across the marketing spectrum from customer loyalty to retention to gaining customers and increasing revenues and enhanced profitability. This is a hard won state – how to get to that state and be competitive? Being data driven inherently means the value comes from integrating the basic data coming from various streams within the organization and finding a relevant meaning in their combine. The insight gathered out of such a process would be able to provide actionable insights, helping the frontline staff and the system to provide meaning to every interaction. Remember Burberry started their journey with the stated mission of being able to be totally connected with everyone who touches the brand, a strategy that got them very handsome returns. Many times business teams are confronted with massive set of data with very high potential value associated with them. This is going to increase across the board and business need to gear up to handling such vast amounts of data. Would there be more value or would be it be like finding a needle in the haystack, The verdict is coming out from various sources. Analyst firms believe that a larger proportion of such data in the digital universe would carry substantial value for business. The means employed to harness such data would also having a bearing in the expected outcomes of such initiatives.
What can not be overemphasized is the fact that every interaction matters. Every time a customer visits your digital or physical property, there is a footprint left –these carry great value. The more footprints that enterprises are able to collect and bring them together for analysis and real time action, the customer experience is going to be that much better. The opportunity to cross sell, up sell increases manifold and additional interactions out of such efforts, provide disproportionate returns . The good marketer recognized such efforts and the executives need to recognize the upside here. The savvy marketer powers customer interactions with analytics, empowering representatives to maximize the value of that interaction and delight your customers. This journey needs to be repeated across channels to get great returns, over the lifetime of the customer. As they say, digital is a battle of relevance versus irrelevance and then it’s a game of the survival of the fittest.
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