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How companies use digital technologies to enhance customer offerings - summary of survey findings
(2019)
Digital technologies are transforming how companies do business. Social, mobile, analytics, cloud, and the Internet of Things - which together we refer to as SMACIT - along with artificial intelligence, blockchain, and an ongoing procession of new technologies create new capabilities : specifically, ubiquitous data, unlimited connectivity, and massive, affordable processing power.
Successful digital offerings are created at the intersection of what technologies can deliver and what customers want and will pay for. That point of intersection, however, has proved to be elusive. To find it, companies must experiment repeatedly, cocreate with customers, and assemble cross-functional development teams - and the insights gleaned along the way must be shared internally.
In this article, we discuss how several of the nearly 200 companies we've studied have built and exercised these capabilities. We also take a close look at how one company, Schneider Electric, is using them to acquire and share customer insights.
"Designed for digital" offers practical advice on digital transformation, with examples that include Amazon, BNY Mellon, DBS Bank, LEGO, Philips, Schneider Electric, USAA, and many other global organizations. Drawing on five years of research and in-depth case studies, the book is an essential guide for companies that want to disrupt rather than be disrupted in the new digital landscape.
PI Chile, a subsidiary of the Principal Financial Group, adopted a new digital vision in 2017 and initiated a transformation of the company with the goal of using digital offerings to help many more customers reach their financial goals. To do this, PI Chile had to wrap its legacy applications in APIs, build a reusable digital platform for the new offerings, and learn what kinds of tools and information customers would and could use. In addition, PI Chile was experimenting with entirely new ways of working for those staff who were developing the new offerings. The company's new accountability framework sought to empower teams to make key decisions quickly. In a short time, PI Chile was well on its way to becoming designed for digital.
Successful digital business strategies rely less on strategic analysis and big bets than on experiments and learning. Consider, for example, that Airbnb grew out of the belief that people would pay to sleep on air mattress on a stranger's floor. Similarly, Instagram started as an app for checking in and hanging out with friends (and sharing pictures) that proved complicated to use. Twitter's founders had first tried a podcasting platform, Odeo, which Apple made obsolete with iTunes. AUDI AG had to kill of its "share a car with five friends" app before rolling out more successful mobility services in a number of countries. The digital successes did not grow out of a comprehensive upfront analysis. Digital strategy emerges from an idea - often, not a particularly good idea.
The proliferation of convergence of digital technologies SMACIT (social, mobile, analytics, cloud, and Internet of Things) has created significant threats and opportunities to established companies. Business leaders must rethink their business strategies and develop what we refer to as a digital strategy. Our research shows four keys to successfully defining and executing a digital strategy:
1. zeroing in on a customer engagement or digitized solutions strategy to guide the transformation, 2. building operational excellence, 3. creating a powerful digital services backbone to facilitate rapid innovation and responsiveness, and 4. ensuring ongoing organizational redesign. A list of publications from the research is provided at the end of this document.