Things you don’t know about Digital Transformation!
Any business decision maker should be aware of digital transformation. All of them get it, why a company needs to be transformed digitally. It’s either to survive or to grow.
Digital transformation itself is proven to give positive impact within the companies, be it from employee morale, efficiency or effectiveness in business decision making, and even market share.
But many people misinterpret digital transformation, it’s not only building a mobile app, website nor using internal software. Transforming a company digitally takes more than that.
Digital transformation is a holistic, end-to-end process to serve customer with a better experience by adapting technologies.
According to Harvard Business Review by Dr. George Westerman, there are 9 elements of a digital transformation which then clustered into 3 bigger segments as below.
Although it’s mentioned that consists of 9 elements, doesn’t mean that should your company wants to transform digitally, you need to revamp or change the whole 9 elements.
Case of Lego
We do aware that Lego now has changed yet only few realize that Lego had transformed its company digitally.
According to the report from World Economic Forum, Lego had survived a near-to-bankrupt situation in 2004. Lego had passed through some declining growth from 1992–2004.
Initially, Lego only sold its products, which are the Lego bricks. But the behavioral shift from children circa early 90s-00s, which is more familiar with digital games like Playstation, Nintendo or any other gaming console, gave an indirect impact to Lego’s sales growth as well.
During its tipping point, Lego transformed its company by doing a major organizational restructurization and adding more additional revenue stream by selling digital products.
By adding digital business for additional revenue stream, Lego managed to survive from bankruptcy.
Reading the behavioral shift from its user and choosing New Digital Business as 1 out of 9 elements to digitally transform the business, Lego now has many digital products like Mobile apps or games.
Not only that, Lego also collaborates with big franchises like Star Wars, Ninja Go, even both of comic giants, Marvel and DC Comics. Now its products are able to turn a profit from many streams such as in-app purchase, merchandising, even big screen movies.
Case of McDonald’s France
If Lego is an example of a big case, McDonald’s on France is the example of more simplified digital transformation.
McDonald’s France has focused on transforming digitally from Customer Experience & Operational Process whereas its user will be able to use online channel as point of order and make payment through e-wallet, Worldine Wallet, which later can be used for redemption on the store within the same day.
According to Atos, there are 1,300 restaurants has deployed this mechanism by the end of 2015. You can find the full report here.
If we look into more detailed process, this new customer journey has touched several departments such as marketing, operations, even the kitchen itself. Should McDonald’s France did not understand the concept of digital transformation, what they did is just to create the online channel, only. But they managed to transform its payment collection and other operational related service as well.
Indonesian Companies That Transformed Digitally
There are few successful companies that managed to transform digitally from their conventional business into digital company.
In Indonesia alone, every single big company wants to be as huge as GO-JEK. They always mention about how creative GO-JEK is, how helpful and resourceful GO-JEK is, and all of those nice words.
We all know, GO-JEK started as an order-by-phone based transportation service company. Eventually, they turn their head to mobile apps. But that’s not the only key to success.
Internally, there are lot of changes in professional mindset and attitude. From head to toe, every inch of method has taken a big leap. Using agile work method, lean analytics, big data utilization, etc. And yes, their risk-taking attempts are resulting a phenomenon.
Jenius by BTPN Bank
BTPN has Jenius as one of its key player on transforming its company digitally. As a Bank, BTPN has taken such a bold move to create Jenius, the new online channel to acquire its user.
Should a company wants to transform digitally, there are 2 different ways to do it. One of it is like Jenius & BTPN, whereas Jenius is not really related with the main business, core banking of BTPN.
By doing it this way, Jenius can iterate its innovation faster than BTPN itself, they can apply Agile Methodology to do lots of trial and error in a smaller scale.
One of the key of digital transformation is to move pretty fast, on an agile mode. Thus, in order a company to be able to do this is to decentralized its decision making, be customer driven and no office politics. Which is kinda difficult to be implemented in a big company.
JYSK Indonesia
JYSK is one of our partner and now becoming one of the market leaders in its field. Although the Danish furniture company has entered Indonesian market for more than 4 years, however, the business growth is not yet satisfying.
JYSK already has several assets and channels. From offline stores and online e-commerce platforms, yet, the big question is remain unsolved for now. Should we have a mobile app to tackle the issues? If yes, what kind of mobile app? If not, then what’s the solution?
Additionally, in furniture industry, online experience still cannot beat offline experience, because current technology still cannot fulfil user’s desire to touch physical goods. And how sophisticated Augmented Reality (AR) technology is, it’s still immature — especially in Indonesian population devices.
Therefore, we choose to redefine whom are we talking to, and explore their pain points. According to the insights we gather, there are 3 hypotheses.
- Fear of buying online is still high.
- Image & visual is not convincing enough.
- Expectation is the biggest gap.
We also found that online maturity for each persona is vary. Wherever the source come from, when it’s coming to buy furniture, in the end it will be converted through offline store. But, we found one particular similarity from our customer: Any individual who wants to buy a new furniture — especially the big ones — would need to search for inspiration from social media (Pinterest, Instagram, etc.) first before choosing the goods.
Knowing all of that, we change the initial idea about the app we’re going to build. From the idea of using the app to push sales conversion, to using the app to drive users to physically come into contact with our top-notch goods.
The app is transmitting the information about JYSK’s budget-friendly goods, tons of image inspiration, and various conversion options. In the meantime, we also prepare a long-term plan to expand our app to convert more user and acquire untapped, potential user.
Digital transformation is such a big effort, in order to do changes, there might be some friction coming from internal or external, changes sometimes scary because of its uncontrollable result. But it’s either to change and learn, or to stay dormant and will be extinct by nature. It’s your choice.
To summarize:
- Digital Transformation takes more than that! It’s a holistic end-to-end process to serve customer with better customer experience.
- According to Westerman, there are 9 elements to transform digitally that cover customer experience, operational process, & business model.
- You don’t need to shift the whole 9 elements, take lego for example.
- You can do that or simply follow McD’s case.
- In Indonesia, there’s an interesting case of Jenius bank.
- Or JYSK.
For further reads, you can try visiting these insightful articles:
Or these publications:
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