Digital transformation has nothing to do with technology
Punchy, I know. But for every ten articles I read about an organisations recent step towards digital transformation, nine of them will focus primarily on some form of technology. Whether it’s implementation, integration, development or upgrade. Contrary to popular belief, this alone is not digital transformation.
Layering new technology on top of old business models, approaches and culture creates the same result each and every time. Wasted money and lacklustre results. Technology has created incredible opportunities to reach people, whether they are customers or employees. But, it’s only by focusing on user experience that we can truly engage with them.
Digital transformation has become the business buzz-word. A quick look at Google Trends and it’s obvious that becoming a digital enterprise is a hot topic. From retail to government and entertainment to finance, sector after sector has been disrupted by digital.
Depending on how prepared an organisation is, this disruption can either be devastating or it can present phenomenal opportunities. Organisations from luxury retail giant Burberry through to the UK government have seen incredible success by adapting to the digital age.
In January 2013, the UK government gave itself just 400 days to transform 25 major services. These were as varied as applying for carers allowance or making a booking to visit someone in prison, to managing taxes and lodging civil claims. The goal was to make these solutions clearer and faster to use, simpler and ‘digital by default’. In their own words, the GDS aimed to create ‘digital services so good people prefer to use them’.
Has the department been successful? The figures speak for themselves. As of October 2015:
- Over 98% of driving tests are now booked online
- 85% of self assessment filing is done through online channels
- 12 million people have registered to vote using a digital service
By replacing outdated organisational processes and unifying the customer experience, the GDS created digital services that people want to use. Within just one year, their work had saved the UK government £1.7 billion.
Yes, the GDS developed new digital services and online platforms. They also consolidated more than 300 websites into one — GOV.UK. But it was the work that they did, and continue to do, placing the user at the very centre of their processes that allowed them to use and develop technology in a way that compelled the public to use them.
In a post on the GDS blog, Stephen Foreshew-Cain, Executive Director at GDS wrote,
“These savings were only possible because digital transformation made them so. Digital has helped us rethink the way we do things, but we’re only at the start of that journey.
It’s good that we’ve started redesigning and rebuilding individual digital services, but transformation goes so much deeper; it means re-thinking the whole organisation and how it works. Our work to date represents the tip of the iceberg, and that iceberg is as deep as government is complicated. Digital thinking is a good thing for all of us, and we can make the most of it through collaboration and putting users first.”
In the early to mid 2000’s, Burberry’s brand equity and performance had been suffering for some time. By licensing out to third parties, who produced anything from polo shirts to kilts, the brand was no longer seen as luxury. In 2006, Angela Ahrendts stepped in as CEO and immediately looked beyond the fashion industry to Fortune 500 leaders including Google, Apple, Nike and Starbucks. Where the fashion industry was lagging behind, these organisations were growing year on year by pursuing digital as a core strategy.
In 2009, Burberry launched the Art of the Trench website. The site was developed so that owners of Burberry trench coats, arguably their most recognisable product, could upload and publish photos of themselves wearing them. Anyone visiting the site can like, comment, choose favourites and share the posts directly onto social media channels. By collaborating with leading fashion photographers and engaging with their customers, Burberry had developed a community on Facebook of over 1 million by November of the same year. The largest of any luxury brand at the time.
Today, Burberry is cited as a key digital transformation case study. An early-adopter success story built on effective customer and employee engagement. Between 2011 and 2015, the luxury retailer posted revenue growth of 68.1%. An increase from £1.5m to over £2.5m.
Ahrendts successor Christopher Bailey recently told investors that a “new strategy covering our culture and the changes to our ways of working [will] be a critical enabler for all our plans in the future.” From launching an online customer feedback tool to creating a single pool of inventory, increasing online stock availability by 7%, Bailey’s focus is to improve operational performance and become a leader in e-commerce.
“These are just a couple of examples of progress from a program that is genuinely galvanizing our whole organization to think and work differently in order to put our customers first.”
Digital transformation is complex. But if there are just two take aways from Burberry and the GDS, it’s this. Firstly, to be competitive in a digital world, change needs to occur throughout an entire organisation. Secondly, without becoming customer centric, without integrating users throughout the entire customer journey your investment will be wasted.
New technology is exciting. It can also seem like an easy win. But investing in tech before looking internally, reviewing your current business models and developing a strategy for change is like jumping in the pool before filling it with water. Although this is a terrible analogy, the results are the same. Disastrous.