Every business must transform into a digital business. Digital businesses continuously exploit digital technologies to create new sources of value for their customers and increase their operational agility to serve those customers. In Asia Pacific, CIOs have had limited success in driving digital business transformation. Organizations taking an early lead in transforming their business include Commonwealth Bank of Australia, China’s Ping An Insurance Group, and DBS Bank in Singapore.
A true digital business needs to integrate two sides of a digital strategy: digital customer experience and digital operational excellence. My colleague Nigel Fenwick has written extensively on the topic; this infographic, for example, sums up our thinking. Becoming a truly digital business requires a radical overhaul of organizational structures, technologies, measurement frameworks, and operating models. And it’s ongoing.
The organizations coping best with digital disruption are creating:
- A digital strategy as a defense mechanism against disruption. The pace of consumer change poses the biggest threat to any traditional businesses that have yet to experience the impact of digital disruption, regardless of whether they’re in the telecommunications, media and entertainment, transportation and travel, or other industry. For example, Australia Post has set up a A$2 billion kitty to aggressively pursue a digital strategy to tap into new revenue sources, including building a new center for the digital delivery of mobile and online products and services.
- A digital strategy for agility. Singapore’s DBS Bank, for example, has earmarked US$200 million over the next three years for a digital rollout of its services. To date, it has rolled out 19 mobile apps covering various services, such as a mobile wallet app that allows customers to use their smartphones to pay for purchases and send and receive funds, and it will be rolling out more mobile and digital services in the coming months. In addition, it has tapped IBM’s Watson to deliver a better customer experience – providing more precise, customized and quality actionable insights that meet its affluent clients’ needs.
- A digital partner ecosystem that enhances customer value. Digital businesses need to adopt a partnership-driven mindset rather than demanding that they build everything themselves. Malaysia-headquartered transport startup GrabTaxi launched a location-based app in 2012 to help people book a cab ride from among the taxis nearest to their location. The app’s success relies on taxi drivers who have it downloaded on their smartphones, a geolocation service, and an integrated back-end payment system. It also allows family members to track a user’s ride and maintains a driver rating system to weed out bad ones. This enhances customer satisfaction during peak traffic and improves the customer experience.
Your organization must become a digital business or it will get disrupted. Use Forrester’s a digital business capabilities assessment to determine your state of digital readiness and start your journey.