Potential link between digital adoption and business growth
1. Potential link between digital adoption and business growth
The emergence and adoption of digital
marketing, analytics, mobility and the
cloud—has rapidly transformed businesses,
governments and industries across the
globe. Mobile technologies have been
especially impactful, as they have enabled
companies to not only streamline their
operations, but also engage more
effectively with customers and tap into new
sources of revenue.
Looking towards the digital world of 2018, businesses can no longer limit their thinking
to that of evolution of business and technology, but instead embrace a revolution in
thinking. The interplay of global megatrends and emerging technologies means that
businesses need to do things differently, not just better, if they are to survive.
Companies take different paths to digital maturity for example Nike who started
developing digital intensity in silos. Further it added elements of transformation
management intensity to link the silos and launch new capabilities. Indian paint
manufacturer Asian Paints went the other way, creating vision, governance and IT
capabilities to become a more unified company. Then it repeatedly built on its
capabilities to transform its customer engagement, internal operations and business
models. Both firms are reaping huge benefits.
Digital transformation across industries
If we compare within industries digital transformation is moving more rapidly in some
industries than in others. As per McKinney report companies in the travel and music
industries were hit early by threats from digital competition, and have already
undergone profound transformation, but still have more challenges to face. Industries
such as financial services and retail underwent major transformation due to electronic
commerce in the 2000s, and are now starting to innovate with technologies such as
social media, mobility and analytics. Other industries, however, have yet to be hit hard
by fast-changing technologies.
Digital offerings provide convenience to customers while serving as lower-cost channels
for the banks. Insurance and utilities are in the Conservative space. Some insurers are
focused on innovating with new technologies, but many are being held back by
regulatory concerns or difficult organizational legacies. Similarly, utilities may be
hindered by legacies of culture or regulatory environment that force a focus on cost
reduction rather than broader innovation. Forrester research shows a correlation
between customer experience excellence and revenue gains tied to customer loyalty—
be it through repeat purchases, lower switching rates or increased word of mouth. The
research revealed potential loyalty-related revenue boosts of $3 billion for wireless
2. service providers, $2 billion for airlines and $1 billion for hotels as stand-outs among
the industries analyzed.
Companies are engaging in analytics at varying levels of intensity. Some are just
beginning to make better use of the data available from transactional systems. They
are making more-informed and better decisions and reacting more quickly to changes
in their operations. Companies with integrated data are able to engage in more
powerful analytics strategies.
An Insurance company is able to do predictive sales, helping salespeople to target
products that a specific type of customer is likely to buy. A hospitality company and a
restaurant firm are using analytics to target promotions and conduct pricing
experiments. A media company is using web analytics to provide real-time KPIs to
customers in order to demonstrate the added-value of the firm’s products. Several
insurance firms are using analytics to underwrite policies, enabling better pricing and
reshaping the firms’ risk portfolios. However, all executives also mentioned that
building analytics capability was difficult, requiring skills and culture change in addition
to investments in information technology.
The pace of technological change is accelerating, and executives in every industry are
paying attention. They face a vast set of alternatives for gaining digital advantage.
Make the investment in the appropriate digital marketing platforms to start building
the foundation for long-term success. It is guaranteed to yield greater efficiency and