The Two Pillars of Digital Transformation

This article was published more than 1 year ago. Some information may no longer be current.

Technology permeates every aspect of our lives and is forcing businesses to rethink their relationship with consumers at every stage of the buying lifecycle from discovery through transaction to post purchase engagement.  In fact, whether they realize it or not, most organizations in today’s connected economy are already going through some kind of digital transformation.

Digital transformation is the process of identifying and executing on the opportunities brought forth by digital technologies across all aspects of the business to improve performance and create competitive advantage.  At its core, digital transformation addresses how consumers are using new digital technologies to make quicker and more informed decisions and derive more value from products and services – both in the private and not-for-profit/public sectors.

Digital transformation goes well beyond digital marketing, social media or experimenting with new digital channels. It focuses on two fundamental pillars:

  1. Customer experience: creating seamless experiences across physical and digital channels, increasing knowledge of the customer through data and analytics, increasing level of self-service, etc.  (“outside in” perspective)
  2. Operational efficiency and processes: process digitization, data driven decision making, merging of physical and digital channels, data unification, etc. (“inside out” perspective)

Most organizations make tactical decisions about which pillar to focus on first. However the best results are achieved by building a strategic road map that advances the two pillars in lock-step as the two domains are so intertwined. For example, social media and customer self-service capabilities (customer facing processes) yield customer data that feed internal analytics systems (operational processes) that can, in turn, be used to improve the customer experience.

Capitalizing on the opportunities brought about by digital technologies requires a proactive approach and considerable commitment, but it need not be onerous. A good starting point is to analyze the threats and opportunities within your industry and conduct a digital maturity assessment to measure how well your organization is poised to respond to these challenges.

A digital maturity assessment helps uncover the biggest opportunities within the two digital transformation pillars and paves the way for creating a digital road map.  It also reveals how well the organization is able to link implementation capabilities with leadership capabilities to bring the transformation to life… but we’ll save that topic for another blog post!