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The Difference Between Success And Failure Is Going Digital
This post was originally published on OPEN Forum. |
Even the most complicated aspects of digital technology like cloud computing and data analytics have reached a point that they are available to every business, not just to big ones.
A new report by Capgemini Consulting and the MIT Center for Digital Business finds that the companies that are most successful at going digital have 26 percent higher profitability, and are more successful across a variety of other areas, regardless of industry.
What Distinguishes the Best
In an interview, we asked Capgemini’s Global Practice Manager Didier Bonnet for a few of the things that set digital leaders apart from the pack. The most successful companies did the following:
Made sure all their investments were “digital first”
Applied digital technology to the thing they were best at first, whether it was the customer experience, sales, or collecting customer data, so they had a clear starting point from which to build.
Really committed. For the best businesses, going digital wasn’t an experiment, but a complete transformation.
We asked Bonnet for an example that really highlighted the difference between those two types of companies. Here’s the story he told:
“We looked at two companies in the same industry–insurance–delivering roughly the same sort of product lines. It was people using a direct salesforce to sell into home insurance and risk insurance and so on. They had come to exactly the same conclusion from a leadership perspective. The two leaders that we spoke to had decided that they needed to really equip the front-end people, the salesforce, with digital tools so they could be much more effective when they are actually selling products on the client side.
So, it was the same kind of strategy at this level. But they came at it in completely different ways. One of the guys, one of the leaders invested in equipping his salesforce with technology, he was basically giving them tablets and smartphones, and all this kind of stuff where they added product catalogs, pricing range, it was loads of information being loaded on these platforms. But pretty much none of the processes changed within the rest of the organization.
The second company did something completely different. They virtually zero based their processes saying, ok, what can we do with the technology we have today? And they ended up with the same answer, equipping the sales guys with an iPad, but the process behind it was completely different. They loaded credit ratings directly to the iPad, they looked at pricing algorithms run from the iPad and connected back to the front office, and it went right down to electronic signatures and electronic printing on site.
The first company was able to raise their productivity by a couple of percentage points. The other one raised not only productivity tremendously, but also the sales levels because they automated entirely, they used the power of their technology to change the entire process.
The best way I can express it is it was the difference between sticking a technology in an existing process, substitution if you will, versus really transforming the process with the power of what the technology can do. And the gains were an order of magnitude different."
To really take advantage of digital technology, you can’t just open a Twitter account or give iPads to your sales force. The more you commit, the more you’re going to get out of it.
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