Digital Transformation

The Case for Embracing Digital Transformation

By Engage Hub expert 8 March 2018

From artificial intelligence to real-time communication and the Internet of Things, digital technology has permanently shifted the business landscape. And it’s no secret that it’s the companies spearheading these new technologies – commonly known as digital disruptors – who prosper.

But what does digital transformation actually mean? What should your approach be, if you’re new to it? And where can you look for inspiration on how to do it well?

Never fear – I have the answers.

What is digital transformation?

First things first. A definition. According to Wikipedia (that fount of all knowledge!), digital transformation at a broad level relates to change associated with the application of digital technology in human society – a kind of enabler of innovation and creativity, if you like.

But what does this rather generic definition mean for your business?

Put simply, digital technology gives you the power to become more agile, efficient, innovative and customer-centric – with the ability to tap into new information.

Ultimately, when you digitally transform your business you boost growth by streamlining your processes to optimise the customer experience. What’s more, to complete the circle, it’s often the end-to-end customer experience that’s driving the change.

What do you need to succeed at digitally transforming?

Whether you’re just starting out on your journey to digital transformation or looking for ways to speed your progress, it’s crucial to have a strategy and roadmap.

Customer experience is increasingly becoming a priority in every sector. You boost satisfaction levels by mapping the customer journey – and investing in technology that builds touchpoints and streamlines contact.

Remember, the nature of the beast means that the goal posts are constantly shifting as technology evolves – so it’s worth revisiting your objectives on a regular basis.

It’s also important to get buy-in from at the highest level to drive change. To succeed, digital transformation needs to be cohesive and collaborative – it needs to apply to every product, service and supplier.

Why is customer satisfaction a good starting point?

So, why is customer satisfaction one of the most important metrics to monitor? Well, the most recent UK Customer Satisfaction Index found that consistently achieving higher-than-average levels of customer satisfaction is linked to better turnover growth, profit and employee productivity.

Thus, the speed at which you’re able to resolve a complaint, how easy it is to get through to the right person and the capability of that individual have all been identified as key differentiators – and these metrics could mean the difference between delivering a passable versus outstanding customer experience.

These differentiators really illustrate how important it is to align processes, employee competencies and technology to meet growing expectations which, as we know, have been fuelled by digital disruptors like Amazon (who, by the way, remain at the top of the index).

Which businesses are smashing it when it comes to digital transformation?

As you’ll see from the below examples, digital transformation transcends sectors.

I’ve selected 3 companies that have been identified as some of the most improved firms in the UK Customer Satisfaction Index. The selection process was simple, they have embraced transformation from a process, technology and resource perspective – crucial to their success.

Unlike other companies who have attempted and failed, they’ve come at digital transformation from a holistic angle and with their own specific requirements – but their discrete approaches shed light on tactics you can adopt to successfully transform your business, boosting the customer experience into the bargain.

United Utilities is the Index’s 4th most improved company

It’s well documented that British water company United Utilities has made strong progress over the past few years, developing new services and introducing a ‘right first time’ culture across their business. And it’s great to see them getting the recognition they deserve.

Measures they’ve taken to boost the customer experience include:

  • Moving all contact centres back to the North West
  • Introducing a system that allows customers to speak to an adviser instantly rather than navigating lengthy automated menus
  • A sophisticated online service that allows customers to manage their water accounts
  • Clearer bills in plain English
  • A welcome pack for home movers
  • A specialist Careline team to support customers who need extra help, such as those suffering from ill health or a bereavement and those with mental health issues

United Utilities’ cohesive efforts have been rewarded. They’re posted revenue of £876 million for the 6 months to September 30th, an increase of 3% running in tandem with an underlying profit increase of 10%.

This success has been driven by a continued focus on customer care – combined with affordable tariff plans to help provide water to an area of the UK that sees relatively high levels of deprivation.

Yodel finishes in 8th in the most improved organisation category

Hot on United Utilities’ heels is logistics business Yodel – another member of the Engage Hub community – who have come in 8thin the index’s most improved list. Congratulations!

  • Previously working from 2 legacy systems, Yodel embarked on an infrastructure transformation to build a platform that helps it become more digitally-focused
  • By consolidating, integrating and refreshing its existing infrastructure, Yodel will be able to focus on its consumer product offerings – improving its data capabilities and building new cognitive intelligence tools

Yodel’s IT team – with its 200 employees – have been instrumental to its success. Communicating and collaborating with every department at the business, they’ve facilitated the smooth transition of data.

And in 19th position, it’s Superdrug

AS Watson Group – the conglomerate that owns Superdrug, Savers and The Perfume Shop – started its digital transformation in 2011. And we’re delighted that its long-term, dedicated customer strategy has earned it a place on the index.

Measures they’ve adopted to achieve this level of success include

  • An initial investment of $70 million into CRM, e-commerce and mobile experience
  • Creating the eLab in-house digital agency to develop e-commerce and digital marketing
  • Embarking on a $70 million project in big data, as part of a plan to build new capabilities in analytics and machine learning

In addition to these steps, the organisation’s Health and Beauty card works in conjunction with the Superdrug app, allowing shoppers to collect and monitor points and access offers. By aligning the app and loyalty program, Superdrug has improved targeting, offering deals and promotions to customers based on their location or past purchase history.

Embrace digital transformation to grow and thrive

According to 2016 Harvard Business School research, organisations who accelerated their digital transformation increased their gross margins by 55% over 3 years – while those who didn’t (laggards, apparently!) only managed 37% in the same period.

The message for hesitant organisations is clear: digital disrupters are winning. Embrace digital transformation and you’ll boost profits and increase customer satisfaction. Fail to do so, and it’s your competitors who will be laughing.